Just four months after he sold his successful teenager-focussed entertainment channel, Hungama TV, to Walt Disney for Rs 135 crore, Ronnie Screwvala is already onto his next big venture: a 24X7 Hindi general entertainment channel that will target India's post-teen youth market straddling an age band of 18-25. "The youth comprise 25-30 per cent of television viewership," says the 50-year-old CEO and Managing Director of UTV Software Communications, "but there's no dedicated holistic entertainment zone, beyond music and sports, for them as yet." That's the vacant slot Screwvala wants to fill with his yet unnamed new venture, first with a Hindi channel which will be followed by ones in English and other Indian languages.

We won't blame you for getting a sense of déjà vu if you do. Three years ago, Screwvala sold Vijay TV, a general entertainment Tamil channel that he had acquired in 1999. He'd paid UB Group's Vijay Mallya Rs 12 crore for the channel and then, sold it to Newscorp's star for Rs 85 crore in 2003. In double-quick time after that, Screwvala launched Hungama TV, which he's just sold.

But Screwvala is more than a serial media entrepreneur. He's one of the few pioneers who spotted the potential of the television medium in India as early as the 1980s. In 1981, Screwvala launched a three-hour video channel that began showing movies cabled into a clutch of apartments in south Mumbai's affluent Cuffe Parade area. Cable TV was a novel idea then and Screwvala was clearly a first-mover getting into it nearly a decade before others.

There hasn't been any looking back. By the late 1980s, Screwvala had moved into the back end of TV-producing content (then mainly for Doordarshan) as well as selling airtime and syndicated programming. Soon UTV, which he founded in 1990, was making content for the then fledgling cable and satellite TV and landed a breathtaking 520-episode contract from Zee Telefilms.

Sixteen years later, Screwvala and his team are scripting UTV's biggest story ever. "In three years' time," he says, "we want UTV to be a Rs 1,000-crore venture with 35 per cent of the revenue coming from global markets." A tall ambition? After all, UTV's turnover in 2005-06 was only Rs 208 crore, and in the past decade, revenues have never grown more than 15-18 per cent. Achieving Screwvala's ambition would require growing at a compound annual rate of 25 per cent. Is that really doable?

New Plot, New Script

UTV's D'mello: Scripting future growth

First, a quick glance backwards. When UTV Software began, its sole business was television content production. Then, over the next 10 years, the company expanded into new segments, like airtime sales for different broadcasters and post-production and dubbing facilities for other content producers. Then came Vijay TV, its first broadcasting venture. "We always wanted to be in the broadcast business because it was the logical extension of TV content production but we decided against getting into the mainstream broadcasting because that would bring us into a direct conflict with our clients," says Screwvala. Vijay TV, thus, seemed the right choice because it was in an uncontested market.

Along with broadcasting, Screwvala slowly ventured into a bigger arena-film production and animation. Meanwhile, after selling Vijay TV in 2003, UTV ventured back into broadcasting with Hungama TV, India's first home-grown channel for teenagers. That's history as now, a third foray into broadcasting beckons Screwvala, who is one the few Indian entrepreneurs to build a business that spans the gamut of media and entertainment business. Says Sameer Nair, CEO, star Entertainment (which is also a major UTV customer): "UTV has successfully established a fully integrated media and entertainment business within a span of 15 years, while most of its contemporaries have not been able to innovate beyond TV content production."

To power future growth, UTV has divided its businesses into four verticals: TV content production, airtime sales, syndication and post-production; film production, international co-production, marketing and distribution; broadcasting; and, lastly, new media, which includes animation, gaming, mobile and internet properties. "We expect all these four verticals to contribute equally to our topline by 2009," says Ronald D'mello, coo, UTV.

Those verticals could be the key to achieving UTV's goal of touching Rs 1,000 crore in the next three years. According to an Ernst & Young report, the media and entertainment business, currently pegged at Rs 35,000 crore, is expected to grow over 18 per cent annually over the next four years. The biggest drivers of this growth will be TV, films, animation and gaming, which happen to be the four pillars of UTV's future growth strategy. Between 2006 and 2009, the period in which UTV expects its revenues to grow three times, the broadcast industry is expected to grow 17 per cent annually to around Rs 29,000 crore, films 18 per cent to Rs 10,000 crore, animation 30 per cent to Rs 8,000 crore and gaming is likely to grow 40 per cent to Rs 1,000 crore. "Companies like UTV, with strong backward and forward integration, are likely to benefit the most from the future growth in the sector," says Farokh Balsara, Industry Leader (Media and Entertainment Practice), Ernst & Young.

Content Pioneers

Television content is the oldest of UTV's businesses. "We pioneered most of the current formats, like quiz shows, chat shows, kids programming, thrillers and comedy on TV," says Zarina Mehta, coo, UTV, and Screwvala's wife. It was UTV that introduced the concept of daily afternoon shows targeting stay-at-home housewives with the 800-episode soap Shanti in 1992. Today, UTV produces more than 29 hours of programming a week for most of the top channels. But rival Balaji Telefilms, which entered content production much after UTV, produces some 40-45 hours of programming a week and is a better paid production company than UTV. But Balaji's success is mainly driven by three of its properties, the K-serials, which in turn, rode the success of Kaun Banega Crorepati, the Indian version of Who Wants to be a Millionaire? "UTV's portfolio is much more diversified in terms of formats and the channels it rides on and hence, has a better growth prospect," says a Mumbai-based equity analyst.

In movies too, UTV is credited with pioneering the concept of the studio model, integrating production and distribution. Its recent big hits with medium-sized budgets of around Rs 20-40 crore include Chalte Chalte, Fiza, Lakshya, Rang De Basanti and Don. Today, it has the largest domestic and global distribution network that reaches some 14,000 screens in India and around 50,000 screens in global markets, including the US, UK, Canada and Mauritius. "We've modelled our production business in a way that we have at least one movie releasing every month," says Screwvala.

For the next two years, UTV's plate will be full with projects involving leading directors like Rakeysh Mehra (of Rang De Basanti fame), Vishal Bharadwaj, Madhur Bhandarkar, Prakash Jha and Ashutosh Gowarikar (who made the blockbuster, Lagaan). What enthuses Screwvala the most, however, is his international co-production projects. He is already working with Hollywood's Will Smith and 20th Century Fox for two movies, I Think I Love My Wife (Rs 63 crore) and The Namesake (Rs 45 crore). Over the next couple of years, this vertical alone could rake in Rs 450 crore for UTV. In animation too, UTV was an early entrant and has its own state-of-the-art studio in Mumbai with an order book of around $22 million (Rs 99 crore) from leading global players.

As for UTV's new channels, the potential seems big. Says Sunder Raman, Managing Director, Mindshare: "It can be a lucrative opportunity because the size of advertising targeted at the 18-25 years viewers is in excess of Rs 2,000 crore." In addition, Screwvala is eyeing opportunities in new media like gaming and mobile content and is likely to announce two big acquisitions soon.

UTV's upside clearly is a fully integrated business model-involving content creation, distribution and broadcasting-but what are its downside? People could be one. Two years ago, Hungama TV faced a crisis when its CEO and other key managers abruptly left the company. And although Screwvala's former employees swear by his creative and innovative skills, they feel that his company doesn't give people enough room to grow. "They have their own people manning the top positions. There are very few professionals at the top," says a former employee. Of course, there are those who don't share that view. Says Siddharth Kapur Roy, Senior VP (Marketing): "I moved to UTV from star more than a year ago and I find the company and team a perfect breeding ground for talent." Overall, UTV seems to have got a winning script for success. And the chances of its show being a hit seem more than a failure.