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Zee and Star to merge distribution arms to form Rs 2000 cr joint venture

Subhash Chandra’s Zee group and Rupert Murdoch’s Start group will float a new joint venture to start a digital cable revolution in the country.

Zee will merge its distribution arm Zee Turner, while Star will merge its Star Den arm.

The idea behind the JV is to make the big investments required for competing with the DTH companies through digital cable, officials said.

“We want to enable a content revolution in India.. and help speed up the process of digitization,” said Puneet Goenka, CEO of Zee Entertainment.

The initial indications are that the cable distribution arms of both groups will definitely be a part of the joint venture. DEN alone has nearly 10 million households in its cable network.

The cable businesses of Zee, Star and DEN have all been struggling to fight off heavy competition from the DTH players.

The new venture, which will assimilate some of the existing properties of the two groups in India, will have an annual turn-over of over Rs 2,000 crore.

Zee and Star are two of the top four broadcasters in India and own several general entertainment and other niche channels in India.

Zee and Star also own distribution channels, including direct to home satellite platforms and cable TV networks, but they won’t be part of the JV.

Gurjeev Kapoor, who is currently the CEO of Star Den, will be the CEO of the new joint venture.

Arun Kapoor, the head of the distribution business of Zee group, will be the COO or chief operating officer, while Jagdish Mulchandani will be the chief financial officer or CFO.

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