UTV AND DISNEY: A STRATEGIC ALLIANCE
The Global Opportunities
UTV Software Communications Ltd. is considering the proposal for an alliance with The Walt Disney Company that want to acquire 100 per cent of UTV's channel, the Hungama TV. In general, the UTV's opportunities to expand globally include several scenarios. One scenario is to expand the base of UTV in the Indian market and scale up operations in an existing vertical or start a new vertical. A different opportunity is to expand in international markets through a partnership with a foreign studio or, finally, UTV can also acquire promising companies in India and abroad an then expanding and strengthening its base. The principal aim of the company internalization is to improve growth thanks to the 25 million non-resident Indians that have stimulated demand for Indian content. Thus, Indian channels would be telecast and movies distributed abroad.
The Disney alliance can give the company an edge and the opportunity to expand globally, infact by selling Hungama, UTV will obtain a substantial cash reserve that will help to drive the future growth and to achieve the predicted revenue of Rs5billion by 2008 and will open up a lot of opportunities. Another advantage is that Disney, as said by its president, will bring to UTV their global media and synergy expertise, including developing and distributing high quality family friendly content in nearly 20 countries world wild and expanding related franchises across film, television, music etc. On the other hand, management is worried regarding the size and span of the operations of Disney, which is a very large company and thus, they are anxious about the loss of control caused from the sale of UTV's tv channel, that is obviously a disadvantages of the alliance.
To accomplish the Rs5 billion company by 2008 and Rs10 billion company by 2010, other alternatives to the DIsney alliance are contemplated:
In achieving its global opportunities, UTV can...
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