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Help MediaPro split likely to benefitMSOs?
#1
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With the MediaPro split, is the
distribution industry in India likely
to get more fragmented? It i
expected that Star, ZEE, NDTV and
MCCS will set up their own distribution
networks.
With TRAI recommendation against the
bundling of channels from more than on
group, the split was inevitable. Star’s robust
investments in the sports genre and
prospective expectation of returns are also
considered to be one of the reasons for the
two largest broadcasting networks of India t
split their distribution together.
How is the Indian distribution ecosyste
expected to change from here? What about the
other broadcasters in the bundled package?
Vikram Chandra, CEO, NDTV said, “We will be
setting out internal distribution team. Let us
see how this pans out.” When asked about the
effect on consolidated revenue fro
subscription, Chandra responded that it would
be too early to comment. “We will have to see
that we get the optimised net figure, which
will balance the carriage fee and subscription
revenue in right proportions,” he added.
A prime concern among the analysts and
stakeholders involved in the distribution
business is that the key revenue figures shoul
not get distorted for the distributors.
According to Salil Kapoor, COO, Dish TV, “Th
networks will have to look deeper into thei
system of distribution. Are they getting the
proportional revenue as they used to before?
This would need an assessment. Secondly,
technology will play a key role in the entire
gamut. Technology is a key driver o
revenues. How monetisation is achieved will
be a key issue.”
In certain key markets, digitisation is yet t
be completed. Senior industry people have
been vocal about the fact that digitisation in
Phases 3 and 4 has gone slow and that needs
to be addressed.
Chandra said, “We would like the
Government to be systematic in digitisation.
Digitisation is happening in bits and pieces,
which is not good for the health of the
industry.”
There are also concerns about whether ther
will be more content aggregators coming up
in the future. Kapoor of Dish TV remarked,
“There is no problem if there are mor
content aggregators as long as the monetary
aspects are taken care of.”
Distribution is still a key issue for the
broadcast industry. Proper synchronisation o
the distribution value chain will not only
help the broadcasters get their due share o
revenue but will also make the industry mor
organised and consolidated in term o
monetisation. At the grassroots, consume
application forms are still an issue that needs
to be addressed. In many markets, CAFs have
not been duly filled and this is impacting the
industry.
Harit Nagpal, CEO, Tata Sky feels that ther
will not be major changes in the ecosystem as
far as Tata Sky is concerned. “Tata Sk
believes in placing due share of the revenue
to its content providers which they rightl
deserve,” he added.
MSOs sensing change?
The Multi System Operators (MSOs) ar
expecting a change in the ecosystem now.
Jagdish Kumar, CEO, Hathway Cable said,
“The clout which Star and ZEE collectivel
commanded earlier is no more. This would
definitely give MSOs a better bargain. Th
split is likely to have implications. In som
cases, the other channels which were piggy-
backing on these big networks will also be in
a position to negotiate in a fair manner.”
MSOs feel that the split is beneficial for the
cable operators, but not likely to affect the
DTH players as carriage fee is not a factor
with the latter.
Various MSOs and LCOs had earlier expressed
their discomfort over the bundling o
channels of different networks. Analysts have
pointed out that this gave content aggregator
an upper hand while negotiating deals with
the networks.
The setting up of new distribution teams for
different broadcasters is likely to open a
Pandora’s Box of debates, with MSOs now
demanding a better proportion of the mone
and broadcasters a robust ratio o
consolidated revenue and carriage fee. It
would be interesting to see how things pan
out.
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