The current economic downturn seems to be spreading across more sectors of the Indian economy. The latest sector to come in its sweep seems to be the media and entertainment industry, and the Ronnie Screwvala-promoted UTV Software Communications, an integrated media and entertainment company, seems to be the first casualty.
The company has decided to shut down its Noida-based Delhi office and, according to industry insiders, about 60 employees may have to quit.
Screwvala, who is chief executive officer of the company, plans to cosolidate the Delhi operations, World Movies and UTV Movies channels within the Mumbai Broadcasting operations, which run Bindass and Bindass Movies.
With the planned consolidation, some employees will be given the opportunity to relocated to Mumbai while others will have to exit the company.
Considering all aspects, including capex, new channel launches, operational fees and other costs, Screwvala said, the company has taken measures to reduce expenditure.
According to the original plan, an investment of Rs600-700 crore was envisaged in broadcasting over the next two-to- three years and the company's action would result in an overall saving in investment of Rs200-240 crore.
With its broadcasting plans substantially rationalised, UTV is now looking to its gaming business to spearhed growth in fiscal 2009-2010. Also, the motion pictures division, which has a number of movies lined up, is expected to chip in with its own contribution to growth.
The company's motion picture opearations have done well in the first half and the second half of the year is expected to end equally well. The company produces its own movies from the ground up unlike others who acquire the movies. This model has paid handsome dividends for the company.