Come 1 November and French fashion channel FTV will become an encrypted feed.

Preparations for the conversion to a digital feed are on in full swing, says Rajan Kaaicker, CEO Distribution Group, Modi Entertainment Network, the channel‘s current distributer in India. According to Kaaicker, 60 per cent of the seeding operations concerning distribution of set top boxes have been completed. The full rollout is expected to be complete by 15 November, he says.

Kaaicker said Modi was using the more expensive Scientific Atlanta set tops costing roughly Rs 33,000 and had no plans to subsidise them. He however said that there would be various payment packages that would be worked out with operators. Kaaicker would not reveal how many boxes he planned to distribute across the country.

Queried as to whether distribution of the channel would be restricted post-encryption considering its niche character, Kaaicker said all-India distribution was what he was looking at as FTV was being positioned as a youth and lifestyle channel. He said currently FTV had a viewer base of 23 million and that was the viewership he expected post-encryption as well.

As to what price the channel was being offered, Kaaicker would only say it would be part of a package deal. Cable industry sources reveal that MEN is bundling FTV along with Hallmark and DD Sports, the two other channels it currently distributes along with French music channel MCM. The cost for all three channels has been put at Rs 13.15 in the metros. The sources say that for the present no price tag is being put on FTV but the costs of both DD Sports and Hallmark have been hiked and the softener as it were is that FTV comes along with the other two. According to the sources, DD Sports which was earlier priced at Rs 5.50 will now cost Rs 7.15 while Hallmark will go up from Rs 3 to Rs 6.

How the cable operators will respond to this move is still unclear though. It should be noted that representatives of two MSOs in Mumbai said they were yet to receive notification on the issue. The representative of a third MSO, while acknowledging that they had received an intimation, said a decision had yet to be taken as to whether to accept the new package rates.

The question that has no clear answer is who would be willing to pay for FTV. It seems to attract a very fragmented viewer base and that too at odd hours. One cable operator had this insight to offer though. According to him, the channel is very popular in the smaller centres for its "hot" content.

It is also true that the monies coming to FTV through ad sales is zilch and moving to a pay mode makes sense if for no other reason than the fact that a regular income source is established.

FTV beams off the Asiasat 2 satellite.

It‘s all about strategy. If Zee tried the "its raining serials" approach as part of its relaunch, Sony Entertainment believes in building the brand "brick by brick", as SET CEO Kunal Dasgupta puts it.

And if strategies are important so are catchlines. And Sony‘s is the ‘T strategy‘ with its focus on prime time viewing. The strategy aims at capturing viewer interest in the two and half hour time band during which people watch TV daily, according to Nachiket Pantvaidya, vice president, programming and production, SET India. Nine - 10 PM from Mondays to Thursdays and 8 - 11 PM on Fridays are the time bands the channel will target in the coming months. This will be done by airing a plethora of soap operas in these focussed bands.

The stress would be on general entertainment, but a re-assessment of the situation would be undertaken in January 2002, according to Dasgupta. "We would not like to hit the market with multiple shows in one go, but would prefer to launch new programmes in a phased manner," he said at a press conference on Monday. Sony‘s flop celebrity game show, Jeeto Chappar Phaad Ke, meanwhile, will be taken off air from 16 November after completing 75 episodes. A new game show, either homegrown or licensed, is also on the cards in the next six months.

Among the 10 soaps that will shortly go on air is Kutumb, a Balaji production, that will be telecast at 9.30 PM from Monday to Thursday.

Unlike Kkusum and Star‘s Kyunki Saas?, Kutumb, another Ekta Kapoor concept, treads a slightly different track although it remains firmly in the Indian extended family domain. There is a spoilt rich brat whose efforts to woo a determined, morally upright girl are all in vain till he manipulates matters so that they have to get married. The ‘saas-bahu‘ feuds have been brought into the ‘husband-wife‘ domain. The family determined not to accept the daughter-in-law in the fold, her efforts to maintain her dignity while seeking love and affection are the tangles that Kutumb seeks to unravel. Ekta‘s own one-liner for the serial, meanwhile, is "They hated each other so they married each other".

Zee Telefilms Ltd today announced its second quarter results (ended September 30, 2001). It comes as no great surprise that even though the income from sales and services has gone up by 15 per cent from Rs 910 million in Q2 FY2000 to Rs 1046 million and other income has gone up from Rs 139 million to Rs 185 million, net profit has taken a hit.

The reason attributed to the downturn is the increase in the cost of programming from Rs 396 million to Rs 502 million (up 27 per cent) in the same period. When contacted Rajesh Jain, president, corporate finance & strategy, Zee Telefilms, had this to say: "The cost of programming includes the production cost of (Zee‘s superhit blockbuster movie) Gadar as well as new programming that went into the relaunch of Zee TV. So the cumulative cost was higher."

Staff costs also went up from Rs 50 million to Rs 93 million and interest costs from Rs 57 million in Q1 FY 2000 to Rs 144 million. When asked how far the Ketan Parekh factor worked towards increasing the interest burden, Jain admitted it was a factor but added that the major cost increase was because of capital costs incurred for purchasing set top boxes and other equipment for the company‘s DTO project. The amount was between Rs 700 to Rs 800 million, Jain said.

The Zee Network‘s consolidated results also are not too attractive. Even though the total income has gone up by 17 per cent to Rs 2667 million from Rs 2274 million in the last corresponding quarter, it is largely because of the healthy growth in subscription revenues (Zee TV went pay in June). Revenues went up 52 per cent from Rs 536 million to Rs 814 million along with an increase in sales and services (up by 46 per cent from Rs 200 million to Rs 292 million). "There has been close to an 180 per cent increase in domestic subscription revenues which form the major chunk of the total subscriptions," says Jain.

Ad revenues are the most worrisome part of the results though. There has been virtually no increase over last year which as far as market sentiment went was thought to be Zee‘s "Annus Horribilis". "Considering the shape the market is in post 11 September, that we could manage to maintain the same level is not so bad," Jain counters. "We are cautiously optimistic about the future," Jain said when queried as to what were the forecasts for the next quarter.

On the expenses front the increases are at a rather disproportionate 21 per cent (considering that total revenue increases stood at 17 per cent). Add to this the increased interest burden of 52 per cent from Rs 134 million to Rs 208 million worked to further erode profits. The end result was that profit after tax went down by 2 per cent from Rs 543 million to Rs 532 million.

For the cumulative period of six months, Zee Network has registered a revenue growth of 15 per cent from Rs 4,512 million to Rs 5,208 million.

In today‘s trading on the Bombay Stock Exchange, the Zee Telefilms scrip was steady with lower volumes of 200,000 shares against the huge trading usually witnessed on the eve of any Zee results announcement. Whether this indicates the lack of attractiveness in the stock is the question. The share opened at Rs 86 and moved between a narrow band of Rs 84 and Rs 88.45 and closed at Rs 85. It should be noted that the market was also dull today. The BSE‘s Sensitive index was down by 14 points at the end of the day‘s trading.

The rather unspectacular revamping campaign which blew up a declared Rs 150 million, the hold on a search for a strategic partner, as well as the monies still to be received from other group companies have really taken a toll on the Zee price. It remains to be seen when the long awaited upswing in the company‘s fortunes takes place.