Subscription, revenue sharingcontinue to haunt broadcastindustry

Thakur

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The Indian broadcast sector is the
third largest in the world in terms
of number of TV households and
has been the preferred advertising
medium in India for several years now. Th
television industry in India, as in the rest o
the world, consists of some basic interna
stakeholders – content providers, distribution
platforms, advertisers and consumers. All
segments are undergoing a major
transformation in terms of regulation,
technology, business models and market
dynamics.
The phase-wise implementation of digitisation
is bringing about further changes in this
industry.
Highlighting the benefits of the subscription-
based model and ad free channels, Monica
Tata, MD, HBO South Asia said, “It provides a
huge opportunity when it comes to quality
entertainment and there is an audience that i
willing to pay and watch. Global travellers
know for a fact that HBO is an ad-free
channel around the world. Originally, HBO’s
format is ad free and the objective is to give a
premium experience to the consumer.
However, in India and Pakistan, we carry
ads.”
Speaking about the challenges for the
broadcast sector, she said, “We are heavily
dependent on ads. Besides, we are facing
bandwidth constraints. Another challenge i
to turn a consumer into a paying consumer.”
With the deadline for implementing the final
phase of digitisation just six months away and
the industry witnessing several landmar
developments in the last one year, the India
cable television is entering an exciting phase
of both opportunities and challenges.
Tony D’Silva, Group CEO (Media), Hinduja
Group and MD, IndusInd Media &
Communications ,congratulated the cabl
operators for building such an ecosystem. He
strongly appealed to the Government t
finalise a date for the last phase o
digitisation. He said, “Fundamentally,
digitisation is not about installing set top
boxes. It is about consumers getting the
benefits.”
He added, “HITS is one of the best answers t
this entire question as it provides all the
background technology. The Government
should announce the exact date so an investo
can invest his money in this sector.”
D’Silva further said, “While we ar
progressive on the one hand, we are lacking
in implementation. The success criteria for
everybody in the value chain need to be
defined.”
Commenting on the challenge of getting the
required number of set top boxes in place for
the digitisation process, Anil Khera, CEO,
Videocon D2H shared some statistics and said,
“In India, there are 240 million households,
out of which, 160 million have got TV
connections. There are 80 million cabl
connections and 40 million DTH connections,
including 15 million DD Direct connections.
As of now, we need 50 million to 60 million
set top boxes.”
He raised the question as to whether it i
necessary to import these STBs from other
countries or manufacture them in
indigenously.
Sharing his point of view on taxes for the
broadcast industry, Khera pointed out that
the DTH sector pays around 33 per cent tax t
the Government.
However, the Government has now requested
DTH players to reduced their subscription
charges, Khera said, adding, “Though we have
been asked to reduce the monthly subscription
charges, there have been no reduction in the
content cost or taxes. DTH operators togethe
have invested around Rs 20,000 crore over
the last 10 years, but none of them ar
making profits today. We are providing the
cheapest service to the country.”
Supporting the self manufacturing model,
Khera said that all Videocon STBs are made in
India and added that these boxes can be easily
manufactured in India, but who is going t
finance it? He requested nationalised banks t
help in the manufacturing process.
Meanwhile, Roop Shrama, President, COFI
highlighted different issues that last mile
operators are facing. The first question sh
raised was regarding the benefits o
digitisation.
She said, “We were told that the purpose o
digitisation is to give benefits to the customer,
the LCOs will not go out of business, and ther
will be good quality boxes. However, none o
these have come into existence yet.”
According to her, the most important aspect i
percentage sharing pattern. She stressed, “Th
MSOs are taking all the decisions,
broadcasters are not spending a single penny,
but they want full revenue in the form o
subscriptions and advertisements.”
Parmeswaran N, Principal Advisor, TRAI
pointed out that the regulator too is facing
some issues where “ten different MSOs ar
pulling in ten different directions”.
He asked,” Can’t the industry come togethe
and work for the implementation of DAS? As
far as the revenue pattern is concerned,
revenue sharing was okay when analogue
system was in place.”
 
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