IndianMascot
Core Member
In an interview with, Gandhi talks about broadcasters' different nature of commercial deals with direct-to-home (DTH) and cable TV service providers, a drop in carriage fees, the need to correct “legacy loads” and the growth prospects for all the stakeholders in a digitised regime.
Excerpts:
Q. How can you say so firmly that there will be no shift in the deadline of 1 November for digitization in the four metros?
We are entering a new era of television history in India. The bad news staring at all of us today is losses, distorted business models and bandwidth constraints. If that is going to halt, the turnaround story for all of us will have to evolve around the digitization script. The good thing is that all the stakeholders realize that hidden value will unlock only if we end the analogue cable regime. The government is also backing digitization and has taken all the tough decisions. While Mumbai and Delhi are in full gear, we will know about the ground reality in Chennai and Kolkata as we hit the digitization date.
Q. But aren’t we just nine days away and all the commercial deals between broadcasters and MSOs are yet to be in place?
While all of us are sighting a new dawn, we have a lot of legacy issues to correct. And this takes time. But it is only a few deals that are pending, a few knots that have to be tied. I don’t think this by itself will be a strong force to push digitization behind. We have gone too much ahead to retreat.
Even DTH had this dark cloud hovering around it in the initial days; Dish TV did not have Star channels when it launched and Tata Sky (a joint venture of Tata Sons and Star India) had to go without Zee channels in the beginning. We will have digitization by the set date, with or without a few deals.
Q. Are DTH service providers able to do fixed fee deals while cable is moving more towards CPS arrangements?
We are seeing an interesting trend emerge. DTH has been able to negotiate more fixed fee deals with broadcasters as they have a national satellite footprint. They can bet on their future subscriber growth numbers with some authority. And they benefit from this kind of commercial arrangement as the yield per box comes down in a fixed fee deal.
Cable networks, on the other hand, are moving towards CPS deals as they address a finite market (city-specific like Delhi or Mumbai or Lucknow) and there is less chance of them growing horizontally (unless acquisitions happen or they compete amongst themselves to grab more territories). Though MSOs want to do fixed fee deals, broadcasters are not comfortable in forecasting the swelling in future cable TV subscriber numbers.
As we move towards smaller markets involving small-sized cable networks in the second and third phase of digitization, we would definitely see more CPS deals. These could later evolve into fixed fee deals as cable networks get a fix on what subscriber growth they would be able to register in future.
Q. How much of the carriage fees the four metros account for?
For the industry, these four metros would be accounting for about 45 per cent of the total carriage payouts. We would be in line with this trend.
Q. How much of a carriage fee drop are we seeing in the four digitized markets?
There will be no drastic fall in carriage fees. There are twin reasons for this. While the TAM (TV ratings agency) towns are rising, the number of channels are also shooting up. And in the digitized markets, we will see a good drop in carriage fees.
Read the Complete Interview ----> Here
Excerpts:
Q. How can you say so firmly that there will be no shift in the deadline of 1 November for digitization in the four metros?
We are entering a new era of television history in India. The bad news staring at all of us today is losses, distorted business models and bandwidth constraints. If that is going to halt, the turnaround story for all of us will have to evolve around the digitization script. The good thing is that all the stakeholders realize that hidden value will unlock only if we end the analogue cable regime. The government is also backing digitization and has taken all the tough decisions. While Mumbai and Delhi are in full gear, we will know about the ground reality in Chennai and Kolkata as we hit the digitization date.
Q. But aren’t we just nine days away and all the commercial deals between broadcasters and MSOs are yet to be in place?
While all of us are sighting a new dawn, we have a lot of legacy issues to correct. And this takes time. But it is only a few deals that are pending, a few knots that have to be tied. I don’t think this by itself will be a strong force to push digitization behind. We have gone too much ahead to retreat.
Even DTH had this dark cloud hovering around it in the initial days; Dish TV did not have Star channels when it launched and Tata Sky (a joint venture of Tata Sons and Star India) had to go without Zee channels in the beginning. We will have digitization by the set date, with or without a few deals.
Q. Are DTH service providers able to do fixed fee deals while cable is moving more towards CPS arrangements?
We are seeing an interesting trend emerge. DTH has been able to negotiate more fixed fee deals with broadcasters as they have a national satellite footprint. They can bet on their future subscriber growth numbers with some authority. And they benefit from this kind of commercial arrangement as the yield per box comes down in a fixed fee deal.
Cable networks, on the other hand, are moving towards CPS deals as they address a finite market (city-specific like Delhi or Mumbai or Lucknow) and there is less chance of them growing horizontally (unless acquisitions happen or they compete amongst themselves to grab more territories). Though MSOs want to do fixed fee deals, broadcasters are not comfortable in forecasting the swelling in future cable TV subscriber numbers.
As we move towards smaller markets involving small-sized cable networks in the second and third phase of digitization, we would definitely see more CPS deals. These could later evolve into fixed fee deals as cable networks get a fix on what subscriber growth they would be able to register in future.
Q. How much of the carriage fees the four metros account for?
For the industry, these four metros would be accounting for about 45 per cent of the total carriage payouts. We would be in line with this trend.
Q. How much of a carriage fee drop are we seeing in the four digitized markets?
There will be no drastic fall in carriage fees. There are twin reasons for this. While the TAM (TV ratings agency) towns are rising, the number of channels are also shooting up. And in the digitized markets, we will see a good drop in carriage fees.
Read the Complete Interview ----> Here