Zee Telefilms, the market favourite, enjoys a market cap of over Rs 60,000crore. Crest Communications has been on the rise till last week of February.The company has entered into a long term contract with overseas animationhouses for sustained revenues. It has entered into a contract with RichAnimation of USA and talks are currently on for taking over Rich entirely.However, the stock is currently taking a breather.

Analysts expect the Indian TV software industry to grow at a very fast paceof 70 per cent in the next couple of years. According to industry sources,revenues will be more-than-doubling from the current Rs 1,200 crore to Rs3,000 crore by the beginning of 2003. A shake out in the industry isimminent with the big players nudging out the small producers.

However, analysts are of the view that with 20 to 30 new channels are at thethreshold of launching will in fact lead to a fresh boom rather than ashakeout. More than new channels, the main push for new TV software is fromthe huge export market after the government gave the industry concessionsunder Sec 80-HHF of the Income Tax Act. Although the recent tax on exportincome will take some of the shine of the exports but re-sale of a programmealready broadcasted in India to foreign markets means adding to incomewithout adding to the expenditure side.

Reorganisation of the main entertainment channels has also thrown up a hugedemand for good, original programming. The demand for television contentfour years ago came with the skies opening up to private satellitebroadcasters.

Another trend that is becoming visible is that the TV software companies arespending more and more on expanding studio and other infrastructurefacilities to meet the demand for quality conscious programmes.

Little wonder that most of the media companies that have come out withinitial public offerings (IPOs) or are planning to do so in the near futureare TV software producers and content providers. Cinevista, one of the oldercontent producers, has reserved Rs 9 crore from its planned issue of Rs 45crore for expanding studio facilities. Nimbus has decided to set aside Rs 90crore from a planned public issue of Rs 192 crore for expansion of softwareproduction and other existing businesses, while nearly Rs 13.25 crore hasbeen set aside by TV18 for hardware purchase and studio expansion in Mumbaiand Delhi from its recent IPO.