Walt Disney, which  operates two television channels in India - Disney Channel and Toon Disney - is joining hands with Indian media and entertainment company UTV to battle Time Warner's Cartoon Network in the Rs 100-crore kids channel space in India.

People familiar with the transaction said that Disney is in advanced talks to buy 30% in UTV's subsidiary, United Home Entertainment (UHEL), which owns the Hungama kids TV channel. The US media giant is expected to invest in the company so that the money is used to battle for market share in an increasingly competitive market.

The move is expected to help both Disney and UTV. While the former will strengthen its foothold in India with a significant ownership in the No 2 kids channel, UTV will get extra money and will also be able to produce content for Disney.

Disney launched its two channels in '05 but has not been able to make much headway thanks to the stranglehold achieved by Cartoon Network with its first mover advantage. Of the Rs 100 crore in ad revenues, Cartoon Network and Pogo together enjoy a share of at least Rs 60-crore.

Hungama, the home-grown kids channel, is estimated to have a share of Rs 10-12 crore. Disney's share is estimated at about Rs 20 crore. Though Disney's revenue is bigger than Hungama's, the alliance would help it bridge the gap with market leaders.

They would also stop competing with each other & focus on building their combined share. Hungama TV's share is between 17-20% among the 4-14-year age group in the Hindi speaking markets. Disney has a share of 11-13%, while sibling Toon Disney, garners a market share of about 7-10%.

Cartoon Network on the other hand, enjoys the lion's share with its market share ranging from 25-30%. Pogo, which is also owned by Time Warner, has a share of about 25%. Both Disney and UTV were tight-lipped about the deal saying they don't comment on market speculation.

However, the move is in effect to weaken the current market leader's hold, Cartoon Network, which has been around for the past 10 years. Disney, with this deal will also be able to strengthen its foothold in India.

Earlier this year, Malaysian broadcaster, Astro All Asia Entertainment Networks bought 26.01% in Hungama TV for Rs 31 crore, valuing the company at a little less than Rs 300 crore. Currently, UTV's holding in UHEL is 49.5%, Astro holds 26.01% and the rest is with UTV founder-promoter Ronnie Screwvala.

Hungama TV is planning to expand its operations in broadcasting and content . Astro will aid UTV in the South East due to its existing operations, for Disney, UTV's local expertise will help the global media major achieve significant foothold in India.

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