If anyone had doubts regarding the value of Zee TV‘s alliance with Metro-Goldwyn-Mayer, these numbers might be worth taking note of (Zee MGM is the English movie channel on the Zee TV platform). MGM has reported that the fourth quarter ended December 31, 2001, was the most profitable in the company‘s 77-year history.

An official release states that a 29 per cent increase in revenues to $375.5 million, a 76 per cent increase in EBITDA (earnings before interest, taxes, depreciation and amortisation) to $64.0 million and a 216 per cent increase in net income to $39.1 million led to the record quarterly results.

Earnings per share on a fully diluted basis increased to $0.16 from $0.06, even though there were fewer shares outstanding in last year‘s fourth quarter. These results were significantly higher than the previously issued earnings guidance of approximately $0.12 per share.

Vice-chairman and COO Chris McGurk said: "Our worldwide home entertainment and television operations produced record results in 2001 by aggressively leveraging both our successful new film content and MGM‘s massive film and television library."

Some financial highlights are:

1. Fourth quarter revenues increased 29 per cent to $375.5 million from $292.2 million in the fourth quarter of 2000.
2. Consolidated EBITDA was $64.0 million, an increase of 76% over the $36.3 million reported a year earlier.
3. Overall EBITDA, including $10.2 million of unconsolidated EBITDA from MGM Networks, was $74.2 million. Included in unconsolidated EBITDA was MGM‘s proportionate share of earnings from the four Rainbow Media Group Channels, reported on a three-month lag basis.
4.Net income rose to $39.1 million from $12.4 million.

Operational highlights include:
1. Worldwide film and television library revenues increased 27 per cent in the fourth quarter.
2. Worldwide home video revenues increased 57 per cent over the fourth quarter of 2000.
3. MGM Networks‘ international subscribers now total 34.8 million.
4. In January 2002, MGM Networks forged a new alliance with Orbit Satellite Television and Radio Network, the Middle East‘s leading digital satellite platform, to establish the MGM Movie Channel, a digital, 24-hour MGM-branded movie channel in the Middle East, set to launch in March 2002. This marks MGM‘s 15th international network built through equity partnerships.
5. MGM Worldwide Television Distribution entered into a two-year agreement with the Fox owned-and-operated stations for the syndication broadcast of "Stargate SG-1."
6. The company launched MGM Business Entertainment Group, a new division that will further leverage and promote MGM‘s massive film and television library.

One of themes at ICT 2002 was India as the new international hub for animation.
Pointing to the scale of the business, CEO UTV Net Solutions Biren Ghose said the worldwide animation industry is worth $ 2 billion, excluding merchandising. Of this the Asian market is worth $ 300 million with India making up only $ 3-7 million, he said. He said that China has original content and has got into mass animation production.

Ghose spoke of four growth codes:
1. Skill sets must grow in a creative manner - Pre production involves formatting and conceptualization by international clients. Then there is actual production and this is followed by post production which is done elsewhere.

2. Have world class processors - A liberal economy means that cost and output must be effective. It is no use utlising the best software if the process involved is not cost effective.

3. Branding and positioning - He gave the example of what Nasscom is doing for the IT industry. If Indian animation is to reach $ 50-100 million levels then marketing efforts have to be upscaled.

4. Hybrid content creation capability - Animation in India at the moment is vertically focussed. It needs to be able to broadbase.

According to AK Madhavan, senior V-P international business, Crest Communication, for a while now Asia has basically been providing services, which he termed as sweat. Now there is a shift happening and so intellectual capabilities can be tapped.

During the session on special effects Maya Entertainment‘s Ketan Mehta noted that over the past four to five years, films and tele serials have increasingly been using special effects. According to Mehta, big budget films spend Rs 20-30 million on special effects which constitute about 20 per cent of the content. Smaller budget films spend the same amount but animation constitutes about half the content. Then there are films which use special effects only for the credit sequences.

Mehta expects digital cinema to happen in India and China sooner than in any other part of the globe. With computer animation and digital applications increasingly becoming a part of the special effects department goals need to be identified, he said.

As far as work in this area is concerned the U.S. accounts for 48 per cent and Europe 21 per cent of the business. As far as sectors are concerned film, television and broadcast account for 42 per cent of jobs done, the gaming industry takes up 31 per cent and the Internet swallows a mere 15 per cent.

Mehta identified the lack of bandwidth as a major hindrance to the development of the industry. High bandwidth will allow foreign clients in America or Europe to monitor the work being done in India, he said. India has the cost advantage at the moment but this will not last long as the costs are rising. So quality has become paramount in importance, he said.