In Hyderabad's Banjara Hills, a tiny location in the city, sits the large TV9 headquarters. The building displays a prominent logo of TV9, which has made a mark for itself in the Telugu news business. Under the umbrella of Associated Broadcasting Company Private Limited (ABCPL), TV9 got off the ground in 2004 with a 24-hour Telugu TV news channel. Since then, it has expanded its presence to four more regional markets—Kannada, Marathi, Gujarati, and Bangla—and Hindi, with TV9 Bharatvarsh. It entered the digital space, with websites and YouTube channels, around three years ago.
Let’s take a look at its financial performance. The company had revenues of `633 crore in FY23 with a net loss of `7.8 crore; in FY22, it had posted revenues of `545 crore with a net profit of `53 crore. A credit rating report put out by ICRA last March points out that ABCPL is promoted by Alanda Media & Entertainments Private Limited, “which is ultimately held by promoters from Hyderabad-based My Home Constructions Private Limited and Megha Engineering & Infrastructures Limited”. The deal to acquire ABCPL from serial entrepreneur Srinivasa Raju, Co-founder and Chairman of iLabs Venture Capital Fund, former COO of Satyam Computer Services and founding CEO of Cognizant India, was struck in mid-2018 for `450 crore. Raju and his staff together held a little over 90%, while the rest was with V. Ravi Prakash, the channel’s founding CEO. Alanda Media was the special-purpose vehicle created for the deal.
Speaking to Business Today, P.V. Krishna Reddy, Managing Director of Megha Engineering & Infrastructures Limited, makes his role with ABCPL very clear. “I took over the business six to seven years ago. I am completely hands-off and like any of my other businesses, it is left to a bunch of competent professionals,” he says. Interestingly, it was acquired not much before the General Elections of 2019, and the assembly polls in Andhra Pradesh and Telangana. “I wanted to be in media then. I saw an opportunity and decided to invest to grow it,” explains Reddy. Prior to exiting the business, Raju was in negotiations with other prominent media houses before zeroing in on Alanda.
“We are a large network today, but I have never used that for other businesses. In fact, I have not given them a single interview to date,” emphasises Reddy. With a holding of around 40% in Alanda (according to Reddy), he drives home the point of his non-involvement in the business. “What takes my time is technology in other ventures and ways to bring that to India. I don’t even sit on the board of Associated Broadcasting Company.” According to the company’s annual report for FY23, the shareholding of Alanda Media in ABCPL was 93.44%, with Ravi Prakash and others accounting for the rest. Of the 93.44%, more than 50% is with the promoters of My Home Constructions, a well-known name in Hyderabad’s real estate business, which was founded by Jupally Rameswar Rao.
Srinivasa Raju, who spent many years in the US, tells BT he was intrigued by how cities like Los Angeles and San Diego each had three to four television news channels. “The opportunity to do something similar in a diverse Indian market was obvious,” he says. There are around 20 news channels in Telugu today with many of them having political affiliations. “The turning point was when I started getting calls from parties to air a certain kind of a story. It was clear that running a neutral channel was going to be difficult and I decided to exit.” While in the US, Raju was exposed to the likes of ABC, NBC, and CBS. “I liked the name ABC and that was the inspiration to call the company Associated Broadcasting Company. TV9 came from my liking for Channel 9 in Australia,” he explains.
Industry trackers give ABCPL credit for moving early into the markets of Karnataka (2006), Gujarat (2007) and Maharashtra (2011), when there were hardly any players. “It gave them a strong position and they smartly capitalised on that,” says one of them. TV9 Bharatvarsh was launched in 2019, while Bangla went live two years later. “We wanted to enter Tamil Nadu but the monopoly of cable distribution (owned by the Sun TV Network) was a challenge,” says Raju.
ICRA’s report highlights ABCPL’s high dependence on advertisement revenue since its channels are free-to-air. “That dependence is expected to be at similar levels [to the competition]. Also, it is exposed to intense competition in the broadcasting industry and from the digital space, which in turn impacts the market share, ad pricing, and ultimately ad revenues for the company,” says the report.
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