Cable TV carriage fees head south

[M.J.Sadiq]

Carriage fees have been a bane of the Indian television industry. Most broadcasters have been groaning and moaning how they have been choking up their capital, preventing them from investing in content, especially news channels.

Now throwing some light on the trend in carriage fees is five year old television media and distribution audit company Chrome Data Analytics & Media which has just released its Chrome Dii R3 (Distribution Investments Index - Round 3).

Chrome Dii,says the company, has been worked out while tracking deals done by broadcasters over the past year, with information gathered from across various sources including broadcasters as well as distribution platforms. After eliminating high variance deals, an average of six solo deals per cable network were studied for their investments for S band and UHF.

"For the digital scenario, Chrome Dii indicates a benchmark carriage to be available on the basic tier that is channels under BST (mandated FTA channels) along with the first tier of pay channels," says Chrome Data executive director Jeffrey Crasto. "The study is inclusive of both new launches/new deals done in the last one year and existing deals expiring in April/May 2013."

Adds Chrome Data founder & CEO Pankaj Krishna: "Digitisation was expected to be a harbinger of correction leading to nullification of carriage fees. As per TRAI, they had anticipated the Chrome Dii to come down to Rs 1, however though there has been a significant drop; it has not come down to Rs 1.As compared to R2, Dii has come down from Rs 20 to Rs 11.6. "

In its third round, the Dii has revealed that north India has emerged as the costliest region with a whopping 16.7 crore in carriage fees for 100 per cent availability across Basic + S band for new channel launches and 13.3 crorefor renewals of existing deals whereas central India is the lowest with 3.11 crore and 2.73 crore for Basic + S band for new launches and renewing existing deals respectively.

While a different image is revealed if the Dii (cost per contact for the television channels) is studied, Chrome Dii R3 data shows the cost (renewals, S-band) per contact (household) is the highest in east India with an average of 19.5 followed by the North at 17.8. The national average for renewals stands at 11.6.

Out of a total universe of 47 million households in Class I India, 42 million are C&S Homes. Chrome Dii study tracks 31 million homes, 2 million remain uncovered and balance 9 million are DTH!

Source: Chrome Data Analytics & Media

<table width="75%" border="1" align="center">
<tr>
<td width="38%">
<div align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">C&S
Households </font></div>
</td>
<td width="16%">
<div align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">89%</font></div>
</td>
<td width="26%">
<div align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">DTH
</font></div>
</td>
<td width="20%">
<div align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">74%</font></div>
</td>
</tr>
<tr>
<td width="38%" height="19">
<div align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Non
TV Households</font></div>
</td>
<td width="16%" height="19">
<div align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">11%</font></div>
</td>
<td width="26%" height="19">
<div align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Chrome
Dii</font></div>
</td>
<td width="20%" height="19">
<div align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">21%</font></div>
</td>
</tr>
<tr>
<td width="38%">
<div align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"></font></div>
</td>
<td width="16%">
<div align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"></font></div>
</td>
<td width="26%">
<div align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Balance</font></div>
</td>
<td width="20%">
<div align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">5%</font></div>
</td>
</tr>
</table>

Chrome Data says that its Dii R3 was pre-subscribed by eight leading TV networks. And it is an addition to the other services that it offers (covering1800+ cities and towns) Chrome Track 2.0, Chrome DPi, Chrome Dii & Chrome SES, Chrome AV, Chrome LC1, Chrome NE and Chrome Language Feed.Some 132 channels subscribe to its various services.

Some interesting facts according to Chrome Dii R3 -

<table width="96%" border="1"> <tr>
<td colspan="5" bgcolor="#0000FF"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"></font>
<div align="center"><b><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Carriage Fee Cost </font></b></div> </td>
</tr>
<td bgcolor="#CCFF00"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"></font></td>
<td colspan="2" bgcolor="#CCFF00">
<div align="center"><b><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Existing</font></b></div> </td>
<td colspan="2" bgcolor="#CCFF00">
<div align="center"><b><font face="Verdana, Arial, Helvetica, sans-serif" size="2">New
Launch</font></b></div> </td>
</tr>
<tr>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">REGION</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Basic
+ S BAND</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Basic
+ UHF</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Basic
+ S BAND</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Basic
+ UHF</font></td>
</tr>
<tr>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CENTRAL</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
273,75,000 </font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">194,70,000
</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">311,95,000
</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">235,30,000
</font></td>
</tr>
<tr>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">EAST</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">376,65,000
</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">281,25,000
</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">404,65,000
</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">340,00,000
</font></td>
</tr>
<tr>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NORTH</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1330,33,300
</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1118,71,800
</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1673,03,300
</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1343,67,800
</font></td>
</tr>
<tr>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">SOUTH</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">549,50,000
</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">466,67,000
</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">625,65,500
</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">527,32,500
</font></td>
</tr>
<tr>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">WEST</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1099,80,000
</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1014,80,000
</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1320,00,000
</font></td>
<td bgcolor="#00FFFF"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1195,00,000
</font></td>
</tr>
<tr>
<td bgcolor="#FFFF00"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Grand
Total</font></b></td>
<td bgcolor="#FFFF00"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3630,03,300
</font></b></td>
<td bgcolor="#FFFF00"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3076,13,800
</font></b></td>
<td bgcolor="#FFFF00"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4335,28,800
</font></b></td>
<td bgcolor="#FFFF00"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3641,30,300
</font></b></td>
</tr>
</table>

* To cite an example as per the above data, comparing how much a Hindi News channel would spend for 75 per cent HSM availability as per Dii R3 as compared to Dii R2 - it would pay 75% of (Rs 36.30 croe minus Rs 5.49 crore for the south) = Rs. 23.1 crore as per Dii R3, whereas it would have paid Rs 38.2 crore as per Dii R2 - a saving of over 39 per cent! But has the overall pie reduced, not really! As there has been an increase in network bandwidth, hence the number of takers has increased.

North emerged as the costliest region with Rs 16.7 crore for 100 per cent availability across Basic + S Band and Rs 13.4 crore for 100 per cent availability across Basic + UHF for New Launches. Renewals of existing deals for Rs 13.3 crore for Basic + S Band and Rs 11.2 crore for Basic + UHF.

The study also provides a benchmark for carriage fee efficiency with respect to the investment indices that is Chrome Dii that is cost per contact (see tables below). Chrome reveals that the Dii (renewals, S-band, household) is the highest in West India with an average of Rs 17.6 followed by the Central at Rs 14.4. The national average for renewals stands at Rs 11.6.

<table width="100%" border="1">
<td colspan="5" bgcolor="#0000FF"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"></font>
<div align="center"><b><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Carriage Fee Cost per contact for existing channels in Rs </font></b></div> </td>
</tr>
<tr>
<td colspan="2">
<p align="center">&nbsp;</p>
<p align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Existing-Basic+S
Band </font></p> </td>
<td width="52%" rowspan="7">

</td>
</tr>
<tr>
<td width="48%"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">West
</font></td>
<td width="48%">
<div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">17.6</font></div> </td>
</tr>
<tr>
<td width="48%"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Central</font></td>
<td width="48%">
<div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">14.4</font></div> </td>
</tr>
<tr>
<td width="48%"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">North</font></td>
<td width="48%">
<div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">14.1</font></div> </td>
</tr>
<tr>
<td width="48%"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">East</font></td>
<td width="48%">
<div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7.1</font></div> </td>
</tr>
<tr>
<td width="48%"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">South
</font></td>
<td width="48%">
<div align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">6.6</font></div> </td>
</tr>
</table>

Source: Chrome Data Analytics & Media

* In terms of highest Chrome Dii, West was followed by North, Central, East and South.
* The gap between Dii for Existing and New Launches has reduced over the years owing to digitization and increase in bandwidth of the networks.

<table width="100%" border="1">
<td colspan="5" bgcolor="#0000FF"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"></font>
<div align="center"><b><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Carriage Fee Cost per contact for new channels being launched in Rs </font></b></div> </td>
</tr>
<tr>
<td colspan="2">
<p align="center">&nbsp;</p>
<p align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">New
Launches -<br>
</font><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Basic+</font><font face="Verdana, Arial, Helvetica, sans-serif" size="2">S
Band </font></p>
</td>
<td width="68%" rowspan="7">
<div align="center">

</div>
</td>
</tr>
<tr>
<td width="15%"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">West
</font></td>
<td width="17%">
<div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">21.1</font></div>
</td>
</tr>
<tr>
<td width="15%"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Central</font></td>
<td width="17%">
<div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">17.7</font></div>
</td>
</tr>
<tr>
<td width="15%"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">North</font></td>
<td width="17%">
<div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">16.4</font></div>
</td>
</tr>
<tr>
<td width="15%"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">East</font></td>
<td width="17%">
<div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7.6</font></div>
</td>
</tr>
<tr>
<td width="15%"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">South
</font></td>
<td width="17%">
<div align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">7.5</font></div>
</td>
</tr>
</table>

Source: Chrome Data Analytics & Media

* Further, the gap between Dii for S Band and UHF has also reduced due to digitization

* Chrome Dii for a New Launch in Central and East India has halved.


Indiantelevision.com > Special Report > Chrome says cable TV carriage fees are down

.