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Carriage revenue has so far been the monopoly of the cable TV networks. Now it is slowly finding place in the revenue locker of the direct-to-home (DTH) operators, leading to alarm among the smaller broadcasters that their cost for launching television channels would go up.
Digitisation was supposed to throw out the menace of carriage fees that broadcasters pay to get their channels carried on cable TV networks.
However, that blot still remains and has come to the rescue of multi-system operators (MSOs) who have had to make massive investments in digitisation of their analogue cable systems. For DTH companies, carriage is still a small revenue stream.
Though for the leading DTH companies it grew at a faster pace last year, scalability is an issue. In FY15, the size of the carriage cake that the DTH companies ate from is estimated to be under Rs 250 crore (Rs 2.5 billion).
Market leader Dish TV, which has become the first Indian DTH company to register net profit for a full fiscal, booked Rs 81 crore (Rs 810 million) as carriage revenue. In fact, Dish TV’s carriage revenue slowly increased from Rs 35 crore (Rs 350 million) in FY13 to Rs 50 crore (Rs 500 million) in FY14.
Similarly, Videocon d2h has seen over 75 per cent increase in its carriage revenue in FY15 to Rs 58 crore (Rs 580 million). However, while carriage revenue adds directly to the bottom-line of the DTH players, it is not a scalable model, believes Dish TV CEO RC Venkateish.
“It is a revenue stream, but it will not be a significant one. Carriage, which accounts for around 3 per cent of our total revenues, may go up to 5 per cent in the future,” he added.
Going forward, Dish TV is expecting the quarterly trend of Rs 30–31 crore (Rs 300–310 million) to continue for all the four quarters of FY16. As per the guidance, Dish TV’s carriage revenue will be in the range of Rs 120 crore (Rs 1.20 billion) in FY16.
Videocon d2h also is looking at an increase in carriage revenue in the near term. “We continue to focus on this stream of revenue. Clearly, we have achieved a significant scale in our business, and having a big chunk of the last-mile subscriber base in India on a platform today, we are the premium choice of many new broadcasters.
New channels are coming up in India so we only continue to see very good traction and very good increase in carriage revenue going forward,” Videocon d2h executive chairman Saurabh Dhoot told investors recently.
So, who pays carriage money to DTH operators? There are many small channels that are willing to pay anything between Rs 3 and 4 crore (Rs 30–40 million) to big DTH players to be carried on the platform and reach viewers.
Read more at: Will carriage be a growing revenue stream for DTH? | TelevisionPost.com | TelevisionPost.com
