It was a surprise announcement made by the company to spin off Num TV - the web- casting division - into an independent entity. Web casting is one area where Pentamedia Graphics has pumped in around $14 million, forty per cent of that for content acquisition.

Pentamedia has bought the Internet rights for 2,000 films from GV Films Ltd, Chennai. "We will soon be issuing 90,000 shares to GV Films at Rs. 600- 700 per share," says Dr. V. Chandrasekaran, chairman and chief executive. And rights for another 4,000 movies are on the anvil.

It is reliably learnt, the company is negotiating to purchase cricket content from a former test cricketer for a fancy price.

Justifying the huge investments Dr. Chandrasekaran earlier assured that Num TV would overtake animation revenues very soon. With three revenue streams - subscription, advertising and distribution of other channels - Num TV earned $2.45 million during the first half of this fiscal. Three years down the line revenues are expected to be in the region of $100 million.

Uplinked from Singapore, Num TV has a registered user base of 2 lakh people and a subscriber base of 7,000, in the US, with subscription rates being $9.95 for narrow band and $12.95 for broadband access. Another unique aspect of Num TV is that it offers program storage facilities that should attract advertisers greatly.

So why the sudden change of mind relating to Num TV? Responds Mr.K. Srinivasan, director and chief operating officer "It is not that Pentamedia is incapable of funding Num TV on its own. But several overseas investors, ISP's, TV channels are keen on investing in Num TV and hence the hive off decision." Singapore Telecom and AT&T are said to be some of the interested parties for a stake in Num TV operations.

"We want to make Num TV as an Asian channel and not just a channel for NRI's", he adds. Pentamedia has been signing up with several Asian channels including Chinese, Korean, Sinhalese and Japanese and radio channels for distribution. Dr. Chandrasekaran wants Num TV to be available on the television by tying up with satellite companies.

Plans aside, the investing community is eagerly waiting to know how the hive off would be actually structured. Says an official of a south-based mutual fund, "It is premature to comment on the hive off impact on Pentamedia. Everything depends on the structure. If Pentamedia is going to get just a dividend income from Num TV as a closely held entity, then the deal is no good."

On the other hand if Num TV after the hive off is listed in a bourse then the fall out will be positive for Pentamedia. And this is precisely what is being now planned.

It is learnt that the after the hive off Num TV might be listed in Singapore as several investors who are showing interest in Num TV are based there.

"Pentamedia will hold 75 per cent stake in Num TV and the balance will be offered to strategic investors", remarks Mr. Srinivasan. Continuing further he adds, "There will not be any adverse impact on Pentamedia as it would continue to be the content provider. Num TV will be just the distributing company. Further the accounts of Num TV would be clubbed with the parent company."

The proposed company will also take over Pentamedia's existing US subsidiary Num Media Inc. Ernst and Young are valuing the digital assets of Num TV. Pentamedia as of date has 15,000 hours of own content out of total content of 150,000 hours.