End Of An Era

So the age of sprawling regional TV conglomerates is over.

Two of Asia's oldest English language TV brands – News Corp.'s Star and Viacom's MTV – have now been restructured and decentralized within the space of three years.

Much of it makes sense, especially as News Corp. refocuses on its profitable growth engine (India), saves costs elsewhere, and rolls a mixed bag of English brands into Fox International Channels (FIC), a business better built for profitable growth in the English channel space.

Viacom probably has innovative and entrepreneurial plans for Southeast Asia under a new head, but similarly its most meaningful P&L contribution comes from India these days, where it has Viacom 18, and a small accretive content JV in Indonesia.

Such evolutionary change and structures, mirroring the changes occuring among advertisers and consumers, could catch up with other international media majors in Asia.

HBO plus Turner?
Time Warner for instance owns 100% of Turner Broadcasting, centralized in Hong Kong, and 75% of HBO, centralized in Singapore.

Bringing the two together (and getting past some of the technical transmission headaches and related glitches of relocation) produces a business in the scale of US$400 million in annual sales, with enhanced affiliate pricing power and a mandate for more localized growth and acquisition in markets such as Korea, Japan and Greater China.

With a Fox Movies/Star Movies combo around the corner in the brave new world post the Fox/Star restructure, all this makes more sense.

Sony meanwhile already has a strong Indian business, at least in sales terms, and decent numbers in Asia (excluding India) for AXN and non-linear content syndication and sales.

Profit visibility isn't great however, and while rationalization may appear to be timely, more value is likely with an IPO of the Sony India business (probably worth about US$1 billion today), a potential merger with new entrants such as NBC Universal, and sensible local acquisitions in Japan and Korea, following the path of Turner and Fox.

Time Warner plus NBC?
Rationalization could be a better path, supported by M&A, for other predominantly English-driven brands such as CNBC and NBC Universal, where networks, sales functions and infrastructure need not be duplicated.

More value could come, however, if NBC Universal were to be absorbed by Time Warner or Sony for instance, or if Time Warner and NBC Universal could work together on local channel investments and ventures markets such as India.

Strong distibution JVs in India between the likes of Zee and Time Warner, Star and DEN, and Discovery and Sony, as well as A&E's tie-ups with Astro and Sony, show  how selective collaboration, rather than all-out competition, offer another possible path forward.

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