Zee, Canal Plus Work on Indian Platform

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Asian pay TV programmer Zee Networks is teaming with Canal
Plus S.A. to launch a digital pay TV programming package in India and Bangladesh this
September, according to an executive working on the project.

Zee Network managing director Bhaskar Majumdar said the
unnamed platform will use Canal Plus' digital technology, including its Mediaguard
conditional-access system and Mediahighway interactive-TV products. However, Canal Plus
will not hold an equity stake in the project.

"Our aim is to have a large direct-to-home (DTH)
package for India," Majumdar said. "But this is currently not allowed and must
wait for the Indian Broadcasting Bill to be passed. Meanwhile, we will launch what we call
a DTO service -- direct-to-operators -- which will offer around 14 to 21 channels,
initially to cable MSOs."

Such a service would resemble AT&T Corp.'s Headend in
the Sky in the U.S. or United Pan Europe Communications N.V.'s "EuroHITS"
service.

Majumdar said there are 70,000 to 80,000 cable operators in
India, including Zee's own Siti Cable, and about 20,000 operators in Bangladesh.

"This is the first step of the agreement. Zee and
Canal Plus are looking at working very closely together, with Canal Plus as a strategic
partner. They are looking at bringing their own channels into the bouquet," Majumdar
said.

Zee's four existing channels -- Zee TV, Zee News, Music
Asia and Zee Cinema -- will form the backbone of the service, and will be dubbed into
India's major regional languages, Gujurati, Punjabi and Bengali.

Zee is currently "channel shopping" in London and
elsewhere for additional channels, Majumdar said.

"Most of the English-language channels currently
available to India are American," he said. "However, India has grown up [with]
and is more comfortable with the [British] accent." High on Zee's radar are channels
from Granada Media plc, Flextech plc, Discovery Communications Inc. and the British
Broadcasting Corp.

Further down the road, and key to Canal Plus' involvement,
is the introduction of pay-per-view movies.

Zee has been involved in a cutthroat battle with Sony
Entertainment Television to acquire top Indian movies. Majumdar said Zee is increasingly
comfortable about securing access to the rights, especially for PPV product. However, PPV
services depend on the approval of DTH in India.

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