MxMIndia

Tag: Digitization

  • We will need a postponement of at least three to four months. The tariff order has just come; there are so many other issues such as DAS licenses being not issued till date, says JS Kohli, CEO of Digicable

    [60 Days to D-Day] Digitization in 4 metros will not happen by July 1: JS Kohli

    Late Monday night, Telecom Regulatory Authority of India (TRAI) announced the new tariff structure for digital cable TV services. Under the new rules, all cable operators will have to mandatorily offer a Basic Service Tier (BST) to viewers which would consist of 100 free to air channels, including 18 mandatory Doordarshan channels, as well as the Lok Sabha channel. The tariff order states that apart from the mandatory channels in the BST, cable operators and Multi System Operators (MSOs) will have to provide customers a minimum of five channels of different genres.

     

    The authority also stated that MSOs will have to increase their channel carrying capacity. TRAI stated: “The Authority has mandated MSOs to carry a minimum of 500 channels from January 1, 2013. However, keeping in view that smaller MSOs having less than 25,000 subscribers may need some additional time for building capacity, they have been given time up to April 1, 2013.” The TRAI has prescribed that every MSO should have a minimum capacity to carry 200 channels by July 1.

     

    TRAI has also established new guidelines for revenue sharing between Multi System Operators (MSOs) and Local Cable Operators (LCOs).

     

    MxMIndia’s Shruti Pushkarna spoke to Mr Jagjit Singh Kohli, a veteran of the cable industry and CEO of cable distribution firm Digicable, on his reading of the latest order issued by TRAI and if he thinks the sunset date of June 30 is still achievable.

     

    What’s your first response to the Tariff Order?

    Well, the order is on expected lines, no big surprises there. Given the circumstances, I am happy with it, in the sense that we know the regulatory has been operating under tremendous pressure from various stakeholders, so given that situation, I am actually happy with the order.

     

    TRAI has observed that the Order will help profitability of channels. But carriage fee exists. Do you think the bottom line will be impacted for both broadcasters and the cable trade?

    The channel capacity is increasing to 500 channels, so automatically the pressure on carriage will reduce. So, although the carriage fee remains but the channel capacity itself is increasing so much that the price per channel will come down.

     

    Given the status as of today, do you see the implementation happening in the four metros before July 1?

    Now, that I don’t think will happen. We will need a postponement of at least three to four months. The tariff order has just come; there are so many other issues such as DAS licenses being not issued till date. To meet the deadline the industry needs to deploy atleast 150,000 boxes every day, only then will we be able to meet that deadline, and that’s impossible.

     

    What about the availability of set-top boxes?

    Even that is an issue. But even if set top boxes were to be made available, it would be very difficult to meet the deadline.

     

    Do you think the government is doing enough to promote the switch to digitization and explain the benefits to consumers?

    Yes, you can’t blame them on this. They have been quite aggressive on the timelines and in their campaigns.

     

    Are there any areas of worry in the run-up to digitization (given that we have just 60 days to go)?

    The only area of worry is that we will need some more time to meet the deadline, otherwise everything is fine.

     

    Photograph: Fotocorp

     

  • Hathway Cable and Datacom Ltd has applauded the Delhi state government's stand on 'No postponement' for the deadline mandated by the government to convert to digital signals via set-top-boxes by June 30, 2012.

    [94 days to D-Day] Hathway applauds Delhi govt

    By A Correspondent

     

    Hathway Cable and Datacom Ltd has applauded the Delhi state government’s stand on ‘No postponement’ for the deadline mandated by the government to convert to digital signals via set-top-boxes by June 30, 2012.

     

    The Commissioner of Taxes and the other state officials of the State Government of Delhi had recently called a meeting of all cable TV service providers in Delhi. The purpose of the meeting was to confirm the readiness of cable TV service providers to roll-out Digitable Addressable System (DAS) to consumers across Delhi and review the current progress of implementation. The commissioner directed the service providers to deploy set-top-boxes in consumer homes by June 30, 2012 and reiterated that there will be ‘no postponement’ whatsoever in this deadline.

     

    As per The Cable Television Networks (Regulation) Amendment Bill, 2011, the cable TV industry is required to convert all subscribers from analog signals to digital.

     

    Commenting on the directive by State Government of Delhi, K Jayaraman, Managing Director and CEO of Hathway Cable and Datacom Ltd, one of the leading MSOs, said, “The industry is happy with the decision. The digital roll-out will enable consumers to watch high quality digital television channels of their choice.”

     

  • Addressing a seminar on 'India going Digital: An Industry Interaction with Stakeholders' Additional Secretary of I&B Ministry Rajiv Takru said that the sunset date is sacrosanct and absolutely non-negotiable. Moreover, digitization is in the larger public interest, and if it hurts a few, then so be it.

    [95 Days to D-Day] No negotiation on deadline: MIB

    By Shruti Pushkarna

     

    Once again the government of India maintained its hard stand on the issue of digitization. Speaking at a FICCI organized seminar, ‘India going Digital: An Industry Interaction with Stakeholders’, Additional Secretary, Ministry of Information & Broadcasting, Rajiv Takru, made it very clear that the June 30th deadline is not subject to any negotiation. Addressing all stakeholders, the LCOs, MSOs and the broadcasters, Mr Takru said, “All analog will be switched off from July 1. The June 30th deadline is not negotiable at all. So all stakeholders should pace up and brace the change.”

     

    The seminar on digitization was organized by FICCI in New Delhi in partnership with the government of India. Participating in the event were all stakeholders, from local cable operators (LCOs), to multi-system operators (MSOs) as well as broadcasters. The seminar was organized to address issues faced by various stakeholders in the run up to the switch over from analog to digital.

     

    Mr Takru started off by saying that there are several rumours in the market that he would like to belie. The first being the unavailability of set top boxes (STBs). He said, “In Delhi there is a requirement of around 33 lakh STBs out of which 7 to 8 lakh STBs are already installed. And around 28 lakh STBs have already been ordered for and they are at various points in delivery. So whoever tells you that there are not enough STBs, is all false.” Secondly, he said there is a lot of talk about the sunset date being extended, he said that the deadline was absolutely sacrosanct and all industry stakeholders will have to follow it as an order. However, he admitted that the task that lay ahead is not easy but knowing the weaknesses of analog, this seems to be the best way forward for all. Mr Takru said that digitization is good for everyone and especially for the consumer. He said, “Digitization is in the larger interest of the consumer and if it hurts a few then so be it. This initiative is not being undertaken to promote any particular business interest, it is a larger step in the move towards digital.”

     

    Also addressing the gathering was Ms Supriya Sahu, Joint Secretary (Broadvast & Policy), Ministry of Information & Broadcasting. Sharing some numbers with the audience Ms Sahu said, “There are 33 lakh cable TV homes and around 5000 cable operators. There are 5 national MSOs and several independent MSOs. The task ahead is difficult and we need to especially reach out to the migrant workers and slum dwellers.” She also said that the government was doing its bit by running ads on radio and TV for consumer awareness. A toll free number has been set up for all kinds of queries on the matter, and the ministry also has a Facebook page where issues can be addressed. However, she urged the LCOs to get into the act now. She said, “You need to start contacting all your consumers to pass on the message because time is very limited.” She assured all stakeholders that although the rules are still being framed by the ministry, once out, they will only ease the process of transition for everyone involved. She said that there were no substantial changes that the ministry is going to make to the existing framework for the benefit of all stakeholders.

     

    Despite all assurances of support from the government representatives, the industry stakeholders seemed unconvinced. Ministry representatives invited questions for discussion from the audience and it was evident from the several points raised at the forum that there were varied levels of discomfort among the stakeholders. While some were hoping that there will be an extension to the sunset date, some hoped that there will be subsidies in sight. But putting all doubts to rest, Mr Takru said, “There will be no free STBs provided for by the government, just like there is no such thing as free lunch. There are no subsidies being contemplated by the government at this point.” He said however, the service providers are putting their services out in the market with heavy amount of subsidy built in, like the cost of a set top box is already subsidized.”

     

    A concern was voiced by a local cable operator with regards to the quality of STBs. He said, “Often there are issues with the set top box provided by the MSO and once the customer buys the STB, he/she is stuck with it. Since the LCO is the link between the end user and the MSO, what does the LCO do if the consumer wants to return the STB and get another one?” Addressing his query Mr Takru said, “The government is devising a scheme where a customer can return a STB he/she has purchased. The refund guidelines etc. are being worked upon by the ministry. The LCO can also return the STB to the MSO and get a refund in return.”

     

    Addressing a concern over the tariff for channels, Mr Takru said that TRAI will soon notify the tariffs which will apply to all, including the LCO, MSO, broadcaster as well as the customer. On repeated complaints over lack of availability of STBs from the MSOs’ end, Mr Takru told several LCOs present that they were free to change their MSO if the MSO refused to provide them with required STBs. But he also urged the cable operators to cooperate with the MSOs in the switch over process.

     

    The seminar was followed by a press conference by the ministry officials. Addressing the media, Mr Takru said, “The discussion with the stakeholders was very interesting and we managed to address several concerns of all the stakeholders.” The Additional Secretary reiterated for the media that there were more than required STBs available in the market and the deadline was non-negotiable. Speaking of the tariff for channels, Mr Takru said, “We don’t expect the tariff structure to rise or to go beyond what it is today.” He also said that consumer awareness initiatives are being undertaken by the ministry, which has already put up radio jingles on AIR FM Gold and Rainbow. Two TV spots will be on air soon on all national and private channels. The IBF and NBA are also carrying tickers as an initiative to raise consumer awareness on the subject.

     

    Mr Takru concluded by saying that this process might leave a few unhappy but because it is being done in the larger public interest, the government is forced to ignore certain concerns being voiced by a smaller group. He said that digitization will empower the customer who will now have the ‘choice’ to watch what he/she desires to watch unlike the present day scenario when the customer is dependent on what is offered by the cable operator.

     

  • Only 100 days to go for digitization and the ground reality does not look too promising at this point. MxM India spoke to a cross-section of stakeholders in distribution to get a clearer picture of the ground reality from the cable operators' end.

    100 Days to D-Day…but where are the Set-Top Boxes?

    By Shruti Pushkarna

     

    Only 100 days to go for Digitization Day and the ground reality does not look too promising at this point. There is a mammoth requirement of set top boxes, Digital Addressable System (DAS) licences have not yet been issued to operators and several other issues remain unresolved as of now.

     

    To get a clearer picture of the ground reality from the cable operators’ end, MxM India spoke to Roop Sharma, President, Cable Operators Federation of India. Speaking of the ground level scenario, Ms Sharma said, “No DAS licences have been issued to the operators still. Until and unless the operator has the license, he can’t get a bank loan and unless the operator has the license, he will not want to order equipment which is worth no less than 1 crore. And more importantly there is no consumer demand for digital. This is only government’s demand because they want to curry favour to the broadcaster. There isn’t any incentive from the government either. They are only forcing a technology on consumers by mandating it.”

     

    But more than anything, the biggest problem as pointed out by Ms Sharma is the sheer unavailability of Set Top Boxes (STBs) in the market. She told MxM India, “You need a Set Top Box to go digital and where are the STBs? First there was talk of importing them from China but that will also take atleast four to five months. Now there are some vendors in India but for that too, the chip has to be imported from outside. There is a requirement of 30 lakh STBs for Delhi alone and this is counting only one TV per household. Also, where is the manpower to deploy all these STBs?”

     

    Another industry source told MxM India, “As per the declared number, there is a requirement of 10 to 12 million STBs but my experience says that the actual total count will be no less than 20 to 22 million, because they have only counted 1 TV per household. The boxes are just not there.”

     

    Ms Sharma feels that the government is pressurizing the smallest guy in the entire value chain, which is the cable operator. Talking of other unresolved issues, she said, “Even if the cable operator gets the STBs and gets the license, the government has not assured that every operator who gets the license will get the content. How can the operator make such a huge investment when there is no assurance of content? The government is only pressurizing the smallest guy in the value chain, they can’t pressurize the broadcaster, not even the MSO.”

     

    MxM India also spoke to Mr Neeraj Sanan, EVP- Marketing and Distribution, MCCS to learn of the state of readiness of channels and industry as a whole. Mr Sanan said, “In principle, the entire fraternity of MSOs, LCOs and DTH friends are united in supporting the lead taken by TRAI. In my view, Delhi and Mumbai are slightly ahead of Kolkata in digitization. Being a country where examinations to appraisals to income tax, everything happens at the last minute I see two things:  a huge last minute rush (that too provided TRAI holds it grounds) which will put operational pressure in implementation. I still hope that, in the larger interest of the community, that we see the sunrise of Digitization. Already we have taken a lead in creating consumer pull through tickers which have been running on MCCS’ three channels for a month now and if all players in the value chain do the same I am sure we can see a successful June 30 sunrise.”

     

    But as per another industry source June 30th seems quite unachievable, “There is a lot of resistance from LCOs and cable operators’ end. Their business is fragmented, that’s how they make their revenues, and digitization will put a stop to that. And moreover, none of the MSOs are really prepared because this requires a capital investment of 30 to 35 crore and they don’t have that kind of funding. The sheer size and the volume of the business is so large that you cannot do it even by December 31st. One thing is certain, it will create unforeseen situation on ground.”

     

    Ms Sharma feels that the deadline might seem possible only if STBs are made available. Listing out all issues that need to be addressed before June 30th, she said, “First and foremost, tariff needs to be in place. DAS licenses have to be issued. Interconnection agreements have to be in place. Revenue share has to be specified. STBs have to be made available in the market. And there have to be fiscal incentives given to the operators. Also, we need to have many consumer awareness programmes. All these problems have to be addressed if the deadline has to be achieved by the notified date.”

     

    She also added that the TRAI had only done one open house recently in Delhi but since the June 30th deadline applies to all the four metros, TRAI should have done an open house in each of these cities.

     

    What’s your view on Digitization? Do you think the four metros can meet the deadline? Email us at shrutip@mxmindia.com and editor@mxmindia.com.

     

  • At the CASBAA India Forum, the I&B joint secy said those who don't digitize will be punished

    MIB diktat: Digitize or get punished!

     

     

    By Shruti Pushkarna

     

    Reiterating the government’s stand on implementation of digitization in the Indian market yet again, Supriya Sahu, Joint Secretary (Broadband & Policy), Ministry of Information and Broadcasting made it clear that there was no alternative to digitization, that digitization has been made mandatory for all and those who don’t digitize will be subject to punishment under Section 11.

     

    Speaking at the CASBAA India Forum 2012 in New Delhi, Ms Sahu said, “It actually becomes punishable if you don’t give digital signal by the notified date. So after June 30 if somebody does not give digital signal and continues with analog signal, it becomes punishable as per Section 11.” Ms Sahu admitted that the biggest challenge for the Information & Broadcasting Ministry was to keep pace with the evolving technology as far as policy formulation is concerned. She said, “Policies are slower than evolving technology…By the time you have put in place a legal framework, you have another innovation come up. So the policy needs to keep pace with the technological advancement. We also need to speed up the policy making process.”

     

    Addressing the forum earlier in the day, Uday Kumar Varma, Secretary, Ministry of Information and Broadcasting also emphasized that digitization will run its course successfully. He said, “Digitization is a phenomenon which is sure to happen and now we need to look beyond the digital. Digitization is an idea whose time has come and the only question is that of timing and phasing, which the government has already looked into.” The Secretary also said that despite the mammoth challenge of digitization, it is set to address a plethora of issues for broadcasters, like measurement, carriage fees etc.

     

    With regard to the availability of set top boxes, Mr Varma said, “The country is in a fair position… as per industry estimates, we require about 10 million set top boxes in the four metros. Around 2.5 million set top boxes are in stock and another 7 million are being procured, about 1.8 million have already been installed.”

     

    Addressing the audience, Ms Sahu also said that Cable Television Network Regulation Act of 1995 has now been amended. It is under this act that digitization has been made mandatory. She also said that certain major changes have been brought in policy in the amendment act which will facilitate digitalization. Clearing the air on issues pertaining to licensing of MSOs and registration regime for the cable operators, Ms Sahu said, “The rules under the act have already been drafted, it is under consultation. We don’t have to bother much about the rules because we are not going to substantially change the licensing procedures for the MSOs and therefore it is not going to disturb the entire process of digitization…The licensing procedure for the MSOs and the cable operator is much simpler, it’s not going to be complicated at all because we know that we have to finish the first phase in time, before June 30.” In the new act, TRAI has been empowered in the act itself to make regulations on tariff and interconnection issues.

     

    Talking about the need to create more awareness among consumers about digitization, both the Secretary and Joint Secretary asserted that the government has already started taking steps in that direction. Ms Sahu said, “We have a committee which is working on the communication campaign. Our jingles are already on two of our radio stations and we just finalized our TV spots. Ministry has already gone ahead with a Facebook account, we are developing an exclusive website, our toll free numbers are already working. But I would like to appeal to the broadcasters and the broadcasting bodies like NBA to come out with their campaigns also.” The onus of bringing awareness she said, lies with both the government as well as the broadcasters.

     

    However, Roop Sharma, President, Cable Operators Federation of India feels that the government needs to do much more in terms of educating the consumers. She said, “Industry has done everything on its own, the government should play a better role in educating the consumer. Since government has mandated the change over from analog to digital, we want government to take a more proactive role in this. They should do many consumer workshops, many consumer awareness programmes and give some incentive to the consumer to transform from analog to digital.”

     

    In an earlier session titled, ‘The Big Picture’, Ashok Mansukhani, President, MSO Alliance, Management Consultant, M/s Hinduja Ventures highlighted three issues, which if addressed now, will make the deadline of June 30 possibly achievable. He said, “The first issue is to have a level playing field cable rules which align the cable rules of 2006 to the DAS act of 2012. Second is, we want a level playing field regulation for digital addressable because the August 2006 CAS regulations cannot work in DAS. And the third is, unless government says that this is a government mandate, everybody on July 1 must necessarily watch television in these 4 cities through a set top box exercising choice it will not take off.” Mr Mansukhani also said that the government needs to get its act together and get all the rules in place to avoid any chaos. He added that in his personal view the June 30 deadline was a mirage in a Siberian desert but the industry was nevertheless committed to make it happen.

     

    Narayan Rao, President, News Broadcasters Association and Executive Vice Chairperson, NDTV, said that digitization will provide a huge potential for the entire industry in forms of revenue. He also said that industry members need to get rid of the trust deficit and work together in order for digitization to happen by the notified date.

     

    Mr Mansukhani said, “Digitization should become an acceptable form of television viewing in India from now on and the industry should make consumers aware of it and take care of them.” Mr Sunil Lulla, VP, IBF and MD & CEO, Times TV Network echoed Ms Roop Sharma’s views when he said that the government needs to take more responsibility for communicating to the consumer the benefits of digitization.

     

    In a separate session titled, ‘The Regulatory Mandate’, speaking about the biggest regulatory challenge for the government, Anil Khera, CEO, Videocon d2h said, “The biggest challenge is to implement within the given time frame.” Mr Ravi Mansukhani, MD, IMCL said, “The biggest challenge is to create a level playing field in a world of convergence.”

     

    Answering a question on whether India is ready to go beyond digital, Mr Khera said, “The first 4 metros will set the pace for digitization. The success of these 4 metros will decide the pace of digitization for the rest of the country.”

     

    K Jayaraman, CEO & MD, Hathway Cable and Datacom as well as Mr Ravi Mansukhani expressed their disappointment with the budget which had no fiscal incentives mentioned. Although Mr Jayaraman said, “It is not a big show stopper for Phase I, I’m sure it’ll come by Phase II and III.” Mr Mansukhani said that the bigger MSOs are lucky to have an investor so money is not a problem for them but there is another smaller MSO who cannot come up with the money; it is this MSO which will be affected, and the government should set up a fund for these MSOs.

     

    The forum ended with a session with GroupM South Asia CEO Vikram Sakhuja talking about ‘The Advertising Revenue Advantage’. He spoke about how digital TV advertising revenue is adding value for platforms, broadcasters, advertisers and consumers across the Asia Pacific. He said that digitization has the opportunity to take measurement from sample to census. The three areas of impact for advertisers in the digitized era are targeting, measurement and interactivity. He said, “Great interactivity and involvement comes from digital TV… we are moving from lean back television to lean forward television and this will lead to increased levels of interaction.” He said we can increase the value of TV inventory by digitization. He concluded, “The new business model will be such where distribution will lead to advertising.”

     

     

  • Anuj Gandhi to take charge as Group Director, Distribution & New business development

    Anuj Gandhi joins Network 18, to head distribution & biz dev

    Distribution veteran Anuj Gandhi has joined Network18 as Group Director, Distribution & New business development, with immediate effect.

     

    Mr Gandhi brings with him almost two decades of rich broadcast experience, across a variety of mandates including leadership roles at some of India’s leading distribution companies and broadcast networks.

     

    Speaking on this development, Mr B Sai Kumar, Group CEO, Network18 said: “Broadcast digitization and growth in new media will cause paradigm shifts in how media brands create value in the future. Our bouquet of channels straddling genres from news and entertainment to kids, music, factual entertainment etc across national and regional spaces is uniquely placed to make the most of this opportunity and we are delighted to have Anuj on board to drive it. His experience & understanding of broadcasting and distribution in India and his leadership record is impeccable, positioning him well for this task”

     

    Added Mr Gandhi: “Network18 is a benchmark player in the broadcast and new media space in India and it is now at a very exciting stage in its journey. I look forward to being part of it at such a momentous time and hope to work closely with the team to unlock value for our brands in an increasingly digitized environment”

     

  • The industry must be able operate sans any constraints to produce top content, says the FIC boss

    @FF12: Price control equals creative shackles for broadcast: Hernan Lopez, Fox Intnl Channels

     

    [youtube width=”400″ height=”250″]http://www.youtube.com/watch?v=MCkprEBcPAs[/youtube]

    Video and Text By Shruti Pushkarna

     

    As President and Chief Executive Officer of Fox International Channels (FIC) Hernan Lopez oversees a massive international multichannel television organization that operates over 200 channels and their related online and production units. Mr. Lopez is responsible for all operations of FIC, which produces channels primarily under the brands Fox, National Geographic Channel, FX, Fox Life, Fox Crime, NatGeo Wild, MovieCity and Star Movies. He also oversees Fox’s US Hispanic cable networks, Fox Deportes and Utilisima. On the sidelines of FICCI Frames 2012, he spoke to MxM India about digitization, the vision for the Indian broadcast industry, HD penetration and economic uncertainty. Excerpts:

     

    On digitization

    I believe that digitization is good for consumers, for television industry and for both on the platform side and broadcaster side and like any process of gradual change of technology it won’t be without hiccups. There will be consumers that will be confused, there will be broadcasters who will be getting more or less space than they did before but at the end of the day all television markets that have gone from analog to digital have seen an increase in consumer satisfaction, in industry revenues and in the transparency of the system overall.

     

    Price control equals to creative shackles

    I argued in my presentation that price controls are putting artificial limit on the total revenue that the Indian television industry can generate and that limit in turn puts a limit on how much can it spend on content, how much you can afford to pay writers, directors, etc. What I have argued is that if the price controls went away, that’ll create a new incentive for television broadcasters to invest more in drama productions that can be here in India and also exported all around the world.

     

    On economic uncertainty

    We have seen uneven stories as it relates to advertising in Europe, for instance pan European advertising is down in some of the southern European countries but in some European markets, it’s up and it’s also significantly up in Latin America and Eastern Asia. So overall worldwide total advertising revenue is up.

     

    Advertising vs. subscriptions – what’s the right mix?

    In the US it’s close to 50:50 and I believe it will take many years for India to get to that stage but I think that’s a healthy balance.

     

    On HD penetration

    HD is a service that today consumers see as a luxury, at some point they will come to see it as a necessity. So around the world, as global television broadcasters, we are very advanced in giving all of our channels in both HD and SD. In fact it’s very much a policy that whenever we launch a new channel we try to do it simultaneously in HD and SD. And when consumers get used to that kind of service, it’s hard for them to go back.

     

    Do away with price control, Hernan Lopez tells FICCI Frames 2012

     

    By Archita Wagle

     

    The morning session on the second day of FICCI Frames 2012 opened with Anto Joseph, Resident Editor, Financial Chronicle, introducing Hernan Lopez, CEO, Fox International TV. Mr Lopez started his address by talking about how India and Indian presence is felt in the US, be it Indian doctors or yoga. But he rued the fact that inspite the ideas or innovations in diverse fields, one area that sadly lacked the innovative ideas and content was television.

     

    According to Mr Lopez, the reason for India’s lack was due to the fact that Indian talent “operates under price control which equals creative shackles”. Citing the example of Columbia which exports its programs to 80 countries, Mr Lopez compared the two and said that inspite having creative talent, technical expertise and skilled tradesmen at par; Columbia is much ahead as it is not restricted by regulations and price control.

     

    Mr Lopez said that Indian television industry was almost totally dependent on advertising revenues, almost $2.6 billion per year, which coupled with the fact that there was an overabundance of channels and less number of affiliates meant that the broadcasters were in a tight bind. He added that even then, almost $700 million had to be paid in carriage fees, which meant that paying the talent came last.

     

    The way forward according to Mr Lopez was if the price control was done away with. He said that this would make it possible to pay the talent in the industry what it deserves and then it can operate without any constraints to produce the best possible content.

     

    Mr Lopez lauded the move to digitisation which would reduce the carriage fees being paid and increase the revenues for the industry. When asked what is the right ratio for advertising v/s subscription, Mr Lopez said that it is 50-50, as advertising alone can’t fund a large degree of quality content. According to him, a stronger content needs a dual stream revenue model.

     

    A member of the audience questioned Mr Lopez about the government sanctioning digitisation for broadcast industry and how feasible is the government intervention, he answered that in a country like India, market forces alone can’t help a technology to be established hence government intervention was needed to push the digital solutions. But he was emphatic that now decision about the pricing should be left to the cable operators and consumers can choose the price level they want to pay.

     

    Asked if better technology is a guarantor to better quality content, Mr Lopez said that there is no guarantee, but he reiterated that if the industry is freed from the price shackles, it will definitely produce better quality content.

     

  • The government has done its job, now it is up to the industry to make digitization work, said Uday Varma at the FICCI Frames 2012 session on Addressable Digitization.

    @FF12: Digitization – ball in industry’s court, says I&B secy

    By A Correspondent

     

    In December 2011, Parliament had passed a bill making analog cable switch to digitization in phases, starting June 30, 2012. FICCI Frames 2012, on day one held a session on ‘Addressable Digitization – The Way Forward.’ This session had two keynote speakers, Dr JS Sarma, Chairman, TRAI (Telecom Regulatory Authority of India) and Uday K Varma, Secretary I&B (Information and Broadcasting), followed by a panel discussion. Almost everyone in the session agreed that digitization is now a reality and an important ingredient for India’s growth. Will digitization be a game changer? Is the industry is ready for digitization, what are the challenges and opportunities that digitization has to offer, and what’s in it for the consumers – these were some of the points raised during the session.

     

    The session was moderated by Vivek Couto, Executive Director, Media Partners Asia. The panelists were, Sanjay Gupta, COO Star India, Sunil Lulla, CEO and MD Times Global Broadcasting, Sameer Machanda, Founder DEN Networks and Punit Goenka, MD And CEO, Zee Entertainment Ltd.

     

    Mr Varma was of the view that since there has been no political opposition to the digitization of cable and the fact that the parliament too had passed the bill in December 2011 it is now upon the industry to make digitization a reality. Mr Varma was also quick to point out that as far as monitoring is concerned, the government has already set up mechanisms and task force as well as interest groups to address various concerns of the industry. “The progress of digitization must be a transparent process. There will be a mechanism that will be put in place to ensure transparency. We are certainly at the threshold of revolution. There are huge changes that will take place and these changes will certainly be beneficial changes especially on how we create contents.”

     

    Dr Sarma, who will be demitting office in two months time observed, “If India has to grow, digitization will be a vital ingredient for its growth and thus it is important that we be technologically updated. Digitization is here to stay and we need to embrace this change.”

     

    The panelists were of the view that not only the industry is ready for digitization but for some of them, it will be a game changer. While digitization will bring a lot of opportunities in terms of contents and niche channels, the industry will face some challenges too. According to Mr Machanda, digitization will be a game changer as it will bring transparency in the industry. “We are ready for digitization, we have the boxes, call centers are ready etc. I believe in the next few months we will see more momentum in the industry.”

     

    Taking issue with Mr Machanda, Mr Gupta was of the view that it was not digitization but providing democratization of content which would be the real game changer for the industry. “The big challenge however is to not carry our analog mindset in digitization. As a broadcaster we have not catered to different audiences, we must therefore unlock the value of creating differentiated contents” he said.

     

    Mr Goenka believed that digitization will not only encourage niche contents but, provide ample opportunities to provide good content and differentiated contents to consumers. Mr Lulla observed, “There is greater good in digitization. There is a lot of work the broadcasters have to do over the next few years as we will have to create pathways. What will however change is not the price of the business but, the view centric business wherein the consumers will decide what they want to watch and the price they want to pay for it.”

     

    The panelists also agreed that the industry is ready for change but it needs to educate and spread awareness about the benefits digitization has to offer consumers, such as more channels and differentiated content.

     

    Photograph: Fotocorp

  • There was no beating about the bush as digitization dominated the discussion on Day 1 @ Ficci-Frames 2012

    Digital attracts ‘desirable’ status on Day 1

     

    By Team MxMIndia

     

    The West swears by it, developed countries from Asia Pacific have already made a generational leap in terms of technological innovations while globally, the medium has shown why it is the most sought-after given the dynamic growth numbers it throws up in the shortest possible timeframe. Well, it could be said here with certainty that digital has bought about a significant change in the way the world goes about running its business in the last decade compared to what other mediums have been trying to do for decades together. Little wonder that when the organisers of FICCI Frames were faced with the choice of shortlisting a theme that could alter the media and entertainment industry in India, they didn’t have to think twice before narrowcasting on the medium of preference – digital.

     

    In keeping with the theme, ‘Embracing the Digital World’, FICCI Frames 2012 got off to a wishful start at Hotel Renaissance, Mumbai on March 14. In keeping with its tradition, the morning session kicked off with a welcome address by the Co-Chair of FICCI Entertainment Committee, Karan Johar. After Mr Johar’s welcome address, Uday Shankar, CEO, Star India & Chairman, FICCI Broadcast Forum, took the stage to address the audience. Making a dash for the core topic of digital, Mr Shankar began by stating, “Digitization is a big reality which will revolutionise the way content (creation and distribution) is offered”. Even though he said that digitisation will create a level playing field for the broadcasters and the cable operators, he had a word of caution to add when he said that his biggest concern was “the chaos which will be caused by the broadcast industry’s inaction.”

     

    Though Mr Shankar admitted that there is a need for legislative enablers to remove the bottlenecks surrounding digital, he also said that the broadcast industry is still not ready to move to the digital format. To drive home his point he used the example of the film The Artist, where the star of the film loses out when he refuses to move with the times. Next it was the turn of Prithviraj Chavan, Chief Minister of Maharashtra who took the stage to talk about the “exciting times that all are living in”. He said that the challenge is to adopt the regulatory framework to the new technology and ensure that over regulation doesn’t kill a good thing. He also said that the move towards digitization will create a huge employment opportunity but there is a need to explore how technology can empower the field of education. The Chief Minister also touched upon the need for regulation and suggested that instead of the state regulating the media, the medium should look at regulating itself.

     

    Following his speech, the event witnessed the release of the FICCI-KPMG Indian Media and Entertainment Industry Report 2012; FICCI-Amarchand Lawbook and ‘Positivity: The impact of television on India’ by The Indian Broadcasting Foundation. Jehil Thakkar, Head, Media & Entertainment Practises, KPMG made a brief presentation about the key highlights of the FICCI-KPMG Indian Media and Entertainment Industry Report 2012.

     

    Uday K Varma, Secretary, Ministry of I&B, opened his address by stating that the concerns that the industry had over digitization and the Phase 3 of FM radio have been addressed by the move to allow 839 new FM stations and 500 community radio stations. He stressed that the government is committed to ensure time bound digitization and said that come July 1, the four metros will switch over to the digital format and the plan is to ensure that the move to digitization is completed by December 31, 2014. He agreed that the challenge was mammoth- to convert 80 million analog connections to digital format but added that it will ensure faster and deeper penetration. “This will address a plethora of issues facing the television industry, such as addressability, carriage fees, audience measurement and consumer preferences,” he said. Mr Varma added that in order to combat piracy, the government intended to carry out an all-encompassing multi-media campaign involving all stakeholders from the film and music industries, shortly.

     

    Punit Goenka, CEO & MD, ZEEL too spoke about the pros and cons of digitization, how the ratings are inadequate and how self regulation was the need of the hour for the broadcast industry. Carolyn Everson, VP, Global Marketing Solutions, Facebook elaborated on how Facebook can benefit the media and entertainment industry and cited examples from music, gaming and films to drive home her point.

     

    ————————————-

     

    BARC takes wings; Discovery Kids to flag off operations in April

    In between the many promises and hopes that were being doled out at the inaugural session came the news of the Indian Broadcasting Foundation (IBF), the Indian Society of Advertisers (ISA) and Advertising Agencies Association of India (AAAI) announcing the official formation of a nationwide audience research joint body — Broadcast Audience Research Council (BARC).

     

    The announcement was made at the inaugural day of FICCI Frames 2012 in Mumbai in presence of I&B Secretary Uday K Varma, TRAI Chairman Dr JS Sarma, Managing Director & CEO of ZEE Punit Goenka, Star India COO Sanjay Gupta, Times Television Network MD & CEO Sunil Lulla, Star CJ CEO Paritosh Joshi, Madison Group Chairman Sam Balsara and Landmarc Leisure Corporation MD Paulomi Dhawan.

     

    While IBF will have 60 per cent stake in BARC, ISA and AAAI will each hold 20 per cent stake. The Board of the council will have 10 members, six members from the IBF and two members each from the ISA and AAAI.

     

    Another important announcement was made by President & CEO of Discovery Networks International, Mark Hollinger who announced the launch of its new network for children in India, ‘Discovery Kids’. Mr Hollinger said, “Launching in April, the network will initially be available in three languages – Hindi, English and Tamil. The channel will offer children a fun and entertaining way to satisfy their natural curiosity with stimulating and imaginative programming,” he said. The company plans to roll out the channel in Philippines and Indonesia later this year.

     

    ——————————————–

     

    Post the promises and pleasantries doled out by committee members and authorities, it was time for some serious discussion which began with a panel discussion on ‘Addressable Digitization – The way forward’. Sanjay Gupta, COO – Star India, Sunil Lulla, CEO and MD Times Global Broadcasting, Sameer Manchanda, Founder – DEN Networks and Punit Goenka, MD And CEO, ZEEL comprised the panellists. The panellists agreed that digitization is the way forward and will soon be a reality. Uday K Varma, Secretary – I&B, put the ball in the industry’s court as he said that there were no political opposition to digitization and the parliament too passed the law in December 2011, therefore it is now incumbent upon the industry to make digitization a reality. Sunil Lulla pointed out that the there is greater good in digitization however, the industry has to do a lot of work over the next few years. Sameer Manchanda was of the view that digitization was a reality and that it will bring more number of channels. While Uday Varma said the government is determined and committed to ensure digitization happens the broadcasters on the other hand also displayed confidence that they are ready for the June 30, 2012 deadline i.e. when metros will switch from analog TV to digital. The session also discussed opportunities and challenges that digitization has to offer and how the industry was gearing for digitization – whether they are ready or not?

     

    A session on ‘Maximising the power of digital distribution’ saw industry leaders speak about the challenges that come along as the country is experiencing the much talked about shift – from analog to digital cable – the investments that goes into and many such challenges. Industry honchos such as K Jayraman – MD and CEO, Hathway Cable and Datacom Ltd; SN Sharma, CEO, DEN; Anshuman Misra – SVP and MD, Networks and Content Distribution, Turner, Asia Pacific; Vikram Chandra, Group CEO, NDTV; Jagi Mangat Panda, Co-Founder and Director, Ortel; Prof Jonathan Askin, Professor of Law, Brooklyn School of Law and Anita Wallgren, Government Attorney, US Department of Commerce, Former Program Director, US Government’s TV Converter Box Coupon Program. Vivek Couto, Executive Director, Media Partners Asia moderated the session.

     

    While digitization comes in as a relief for broadcasters who will be benefitted from additional subscription revenue the relaxation on paying heavy carriage fees, and of course providing viewers with a superior content experience – MSOs and cable operators have to quickly respond to the digitization mandate by investing in set-top boxes – the cost that is only possible to recover after four years. Jagi Mangat Panda pointed out that digitization will result in some sort of consolidation in the distribution space where bigger players will look to expand their presence in the Indian market.

     

    Vikram Chandra talked about the difference digitization makes to the news industry. “Digitisation is important for news players. It is leading players in the news industry into areas they don’t want to be in. In the race of chasing TRPs, people are forgetting that digital has a great potential that has to be tapped, a business model which needs to be looked at.” Chandra also mentioned the role of tablets and high-end devices as new distribution platforms.

     

    Anita Wallgren and Prof Jonathan Askin spoke about how the United States saw the transition of analog TV to digital – the learnings and challenges.

     

    It could be said that the media and entertainment industry of India has scripted a glorious growth story in the past ten years or so. And now, when the future looks more promising with digitisation and the advent of technology across media verticals such as broadcast, print and also films – one area which that has not seen enough progress is the lack of private equities and VC funds showing adequate interest. In a session titled “Financing the Media and Entertainment Business” eminent personalities such as Prashant Jain, Executive Director, HDFC Mutual Fund; Mathew Cyriac, Sr Managing Director, Private Equity, Blackstone; Soumo Ganguly, Managing Director, Moxie Entertainment Pvt Ltd; and Daniel Dubiecki, Founder and Partner, The Allegiance Theatre, Hollywood shared their views on the subject. Ashok Wadhwa, Group CEO, Ambit moderated the session.

     

    Mathew Cyriac started off the session by pointing out that majority of the investments within the media and entertainment industry were made in television and print as they represent a fairly large share  in terms of sheer numbers as against Internet and Radio. The Hindi GECs in TV is typically where a lot of money goes to followed by regional GECs and sports channel. For print media, it was the regional publications that command a lot of attention as regional advertising is very robust – one which extracts a lot of profit.

     

    Prashant Jain pointed out that a lot of companies in India have managed to get good funding and that it is not reflective of a very, very sorry picture as is being talked about. “It’s not that all of India in the media entertainment space are not attracting funds. Companies like UTV and a few others have attracted investors.”

     

    Ashok Wadhwa remarked that the film industry in India is not institutionalised enough to attract private equity. Daniel Dubiecki spoke about the need to be more global in concept, widen the scope of market and thereby making it more viable to attract investments in the films business.

     

    In the session on ‘Protecting Copyrights, Infringements & New Trends i.e. Remake’, the panellists chose to rummage over the impediments surrounding copyright issues in the film and music industry in India. The panellists included Sai Krishna from Sai Krishna Associates; Deborah Benattar, Head, TV & Cinema, French Embassy; Jagdish Rajpurohit, Head, RCL Motion Pictures & Producer; Bertrand Mouiller, former DG IFFPA and Amar Butala, creative director, UTV Motion Pictures. The session was moderated by Dina Dattani, Consultant & Lawyer. Sai Krishna provided a hopeful insight as he said, “The industry should take heart in knowing that the Copyright Amendment Bill is currently being debated in the parliament and is expected to be passed after the current Budget Session. There are provisions that can alter the way the entertainment industry functions in India.” But he cautioned by saying that the Bill has its setbacks too as there are no clear guidelines when it comes to copyright issues between the writer, music composer and the producer of a film. Mr Butala added here saying, “We have made huge leaps in terms of the legal paperwork with actors and performers where copyright issues are concerned. But it is just the start and the challenge would be to sort out legal issues and take the offenders to Court with the hope of finding a favourable outcome from the judiciary.” The panel proceeded to discuss the trend of moviemakers bagging rights for remaking movies and that there was a need for a law that would streamline procedures for the industry at large.

     Photograph: Fotocorp

  • To empower consumers and enable operators to build brand equity with a 26 week campaign across print, television, out of home and digital

    Reliance Broadcast launches ‘Choose Your Set-Top-Box Wisely’ campaign

    By A Correspondent

     

    Digitization is all set to revolutionize the television viewing experience. While operators are undertaking activities to build their brand equity and ensure that they gain from the eminent shake-out, the consumers now understand that the power to enhance their television viewing experience lies with themselves.

     

    Reliance Broadcast Network, which in a little over a year successfully created a bouquet of channels through a well-crafted strategy, has conceptualized a campaign that complements its television broadcast business. Aptly titled ‘Choose Your Set-Top-Box Wisely’, the campaign is tailored to increase awareness and empower consumers with adequate information to make the right choice while choosing their set top boxes, while also enabling operators to build their brand equity.

     

    Come digitization, the discerning consumer would look for quality, variety and a strong value proposition and operators who have the potential to offer these will stand to gain significantly. Backed by the belief that ‘content is the cornerstone for success’ and a deep understanding of the discerning consumers’ demand for quality and variety entertainment, the Company has positioned its 7-channel strong bouquet to cater to a wide viewer palette:

     

    1.     BIG CBS Prime, a male skewed premium entertainment Channel (male 15+, SEC A, 7 metros)

    2.     BIG CBS Love, the first ever international women’s entertainment channel (female 15+, SEC A, 5 metros)

    3.     BIG CBS Spark, the first ever International youth Channel (4-24, SEC A, 7 metros)

    4.     BIG MAGIC, a variety entertainment Channel for the Hindi heartland (CS 4+ MP, UP,Bihar)

    5.     Spark Punjabi, the country’s first international Punjabi Channel (CS 4+,Punjab, 1mn+)

    6.     BIG RTL Channel in the action space

    7.     BloombergUTV,India’s premier Business news channel (male 25+, SEC A, 7 metros)

     

    With the latest content fromAmericathrough BIG CBS Networks, Indian homes can continue to enjoy an unparalleled viewing experience of their favorite international shows. Similarly, the first international Punjabi channel – Spark Punjabi ensures the PHCHP region also enjoys the best international content, dubbed in their local language. BIG MAGIC is the Hindi heartland’s only variety entertainment channel offering the best home grown content, which meets local sensibilities and is already a favourite amongst consumers. BIG RTL will bring with it some of the best reality and action programming from the world renowned RTL Group, which also houses Fremantle. And finally, BloombergUTV, powered by Bloomberg, the final word in business news globally, offers Indian viewers a differentiated business news viewing experience amongst the monochromatic competitive offering. The channels come together to offer both consumers and operators an excellent offering.

     

    The multi-media campaign will spread across television, radio, out of home and the digital platforms and will be one of the largest initiatives in this space by any broadcaster. The campaign will be further sustained over the next 26 weeks across all Reliance Group platforms, including BIG FM’s 45 station radio network, it’s out of home arm – BIG Street, its 7-channel television network and its digital platforms.

     

    Speaking about the campaign, Mr. Vishal Rally, Business Head, BIG CBS Networks said: “Digitization will usher a new era of television broadcasting and the Choose Your Set-Top-Box Wisely campaign has been conceptualised and designed to benefit multiple stake-holders across consumers, operators and the channels. We are excited to present the most distinctive and eclectic content mix to the Indian viewers through our bouquet of channels, and encourage them to make a wise decision so they can continue to enjoy experience.”

     

    Reliance Broadcast Network Limited is a multi-media entertainment conglomerate with play across radio, television, intellectual properties and out of home. It is part of the Reliance Group and specializes in creating and executing integrated media solutions for brands.

     

  • In order facilitate transformation to digital cable system, TRAI identified certain key issues that need to be determined

    TRAI issues consultation paper on digital cable

    By A Correspondent

     

    The Telecom Regulatory Authority of India (TRAI) on Thursday released a consultation paper on “Issues related to Implementation of Digital Addressable Cable TV Systems”.

     

    The analog cable TV service, which caters to around 94 million households, has been a roadblock in exploiting the full potential of the sector. Keeping this in mind and in consultation with all the stakeholders, the Telecom Regulatory Authority of India had recommended to the government complete digitization with addressability of the Cable TV services, in a phased manner in August, 2010.

     

    After the Parliament passed the Bill to amend the Cable TV Act paving the way for the digitization programme, in order facilitate transformation to digital cable system, TRAI identified certain key issues that need to be determined. These issues pertain to:

    • Composition and Tariff of Basic Service Tier (BST)
    • Retail Tariff
    • Prepaid billing
    • Interconnection issues
    • Revenue share between MSOs and LCOs
    • Quality of Service Standards
    • Redressal of Consumer Complaints

     

     

    Some of the key issues raised by TRAI in the consultation paper concern:

    • The minimum number of free-to-air (FTA) channels that a cable operator should offer in the basic-service-tier (BST). TRAI has also demanded for the genre-wise (entertainment, information, education etc) mix of channels in a BST?
    • If the retail tariff is to be determined by TRAI or left to the market forces? If it is to be determined by TRAI, how should it be determined?
    • The subscription revenue share between the MSO and LCO and if it is to be prescribed by TRAI what should be the revenue share.
    • Whether an ad-free channel is viable in the context of Indian television market?
    • The responsibility for ensuring the standards of quality of service provided to the consumers with respect to connection, disconnection, transfer, shifting, handling of complaints relating to no signal, set top box, billing etc. and redressal of consumer grievances.
    • The impact on the wholesale channel rates after the sunset date i.e 31st Dec 2014, when the non-addressable systems would cease to exist.

     

     

    The full text of the Consultation Paper is available on TRAI’s website (www.trai.gov.in). TRAI has invited written comments on the issues raised in this consultation paper from the stakeholders by 16th January, 2012, and counter-comments on the comments by 23rd January, 2012.

     

    The comments and counter-comments may be sent to Mr Wasi Ahmad, Advisor (B&CS) at: advbcs@trai.gov.in or traicable@yahoo.co.in.

  • Digital mandate to benefit the industry and the consumer: Media Partners Asia

    Digitization will boost TV industry: MPA report

    By Rishi Vora

     

    The government mandate to digitise cable networks across India will bring a significant transformation to the US $7 billion television industry with a positive impact on the nascent broadband market, says a report published by Media Partners Asia (MPA).

     

    Executive Director of Media Partners Asia, Mr Vivek Couto said, “India’s broadcasting and pay TV market is on the cusp of a high growth value phase, similar to North America between 1998 and 2003, Korea during 2003-2007, and Taiwan during 2005-2010. Valuations of the domestic companies in these markets during the high-growth value stage typically skyrocketed, as networks were upgraded and services to consumers expanded. In India, domestic players and foreign investors will both do well, to the benefit of consumers, when the government’s policies take shape.”

     

    The report, entitled ‘Investing in Digital India: The Dynamics of Mandatory Addressable Digitization’, underlines benefits across the value chain.

     

    A boost for the government and the economy
    If the current analog cable distribution model remains in place and digital penetration is limited, the cumulative value of the tax receipts lost by the government would reach US $11 billion over the next decade or more than US $1 billion per year. The government therefore has sufficient incentives to push digitisation and can also accelerate the process by offering tax incentives to a potential multi-billion-dollar industry. Digitisation will also help the government pursue India’s broadband goals and thereby help to boost economic growth. Potentially, a 10 percent increase in broadband penetration would increase India’s GDP by 1.5 percent. As of September 2011, broadband per capita penetration in India was only 1 percent. In its National Broadband Plan, the Telecom Regulatory Authority of India sees a pivotal role for cable operators with digital network upgrades paving the way for broadband growth.

     

    Consumer will have the choice
    Digital cable television will improve the consumer experience and resolve legacy issues from analog cable services. Consumers will gain access to more channels; attractive tiering options with differentiated content across local, regional and niche genres. It will provide a better viewing experience; and improved quality of service. Digital cable television will also be affordable for the consumer. As per international benchmarks, spending on pay TV typically accounts for 5 percent of GDP per capita. In this context, digital cable television in India will be affordable given heavy subsidies on STBs (currently subsidised at 60-70 percent by MSOs), which will ensure that consumer spends fall within the 5 percent benchmark. Consumers will also benefit from new competition as digitisation in metros ensures that seven DTH satellite platforms (including free service DD Direct) compete for customers with digital cable operators.

     

    Cable transformation almost certain
    MPA expects a six-fold increase in subscriber revenues for cable MSOs, though not without at least a 20 percent churn in the cable subscriber base to DTH. Subscriber declaration levels will increase from 15 percent currently to 100 percent, while the retained ARPU will increase by six times after assuming a 30 percent base case revenue share with the local cable operator (LCO) will reduce the payback period on digitisation. Under a bundled model, the payback period could be reduced by a year to 24 months, as opposed to 36 months under a standalone digital proposition.

     

    The main challenges, apart from managing subscriber churn to DTH are one, the drop in carriage fees by about 20-50 percent; and second – incentivising revenue-sharing agreements that need to be struck with local cable operators to drive digital into homes.

     

    Opportunity for DTH players
    Phase I digitisation in the four key metros offers a good opportunity for DTH operators to grab high-ARPU customers and increase the platform’s reach in larger TAM markets. MSOs envisage about 15-20 percent churn in cable subs to DTH, though some suspect this could grow to 30 percent in the early stages of Phase I deployment. Subsidised HD offerings will also act as a key differentiator for DTH players as few cable operators have rolled out HD services.

     

    Benefit to broadcasters
    Digitisation will help boost subscription revenues and reduce dependence on advertising. Improved economics will also help broadcasters launch niche channels with a premium focus while carriage and placement fees will fall in certain markets and moderate in others. At the same time, consumer adoption of certain programming tiers and specific channels (over others) will ensure healthy competition while broadcasters will also be under pressure to produce content with differentiation, premium quality (potentially advertising-free) and with local relevance.

     

    Benefit to investors
    Upon successful implementation of the digital mandate, gradual consolidation of LCOs will become inevitable. This will shift industry profits and value to centralised distribution platforms and broadcasters. Valuations for cable/ pay TV operators in the USA, Korea and Taiwan during their high-growth value stage typically averaged 12-16x one year forward EBITDA, versus the current trading average of 9-10x for India’s listed cable/pay TV entities. MPA assumes similar or higher valuations for companies in India subject to successful execution. Most investors, especially strategic companies, will adopt a wait-and-watch approach, potentially making their bets after Phase I is completed.