ITV

Category: Multi System Operators

  • Comcast acquires majority stake in Universal Studios Japan for $1.5 billion

    Comcast acquires majority stake in Universal Studios Japan for $1.5 billion

    MUMBAI: Comcast NBC Universal has agreed to purchase 51 per cent ownership of Universal Studios Japan in a recapitalisation transaction, partnering with the current owners including Goldman Sachs, USJ’s CEO Glenn Gumpel, Asian private-equity firm MBK Partners, and U.S. hedge fund Owl Creek Asset Management. 

     

    Comcast NBC Universal’s purchase price for the majority ownership of the theme park destination is $1.5 billion (?183 billion).

        

    Located in Osaka and featuring classic Universal attractions as well as attractions and shows specifically designed for the Japanese market, USJ opened in 2001 and has experienced continued growth in attendance and revenue.

     

    “We are excited to expand our global footprint with this wonderful theme park in Osaka and are excited by the opportunities that lie ahead in Japan and all of Asia. This investment represents a huge opportunity and commitment to creating value for our shareholders and continuing to grow internationally,” said Comcast chairman and CEO Brian L. Roberts.

     

    Acquiring majority ownership of Universal Studios Japan continues Comcast NBC Universal’s ongoing investment strategy for its US parks in Orlando and Hollywood.

     

    “We want to expand our theme park business around the world and this investment in Universal Studios Japan fits perfectly with that strategy. Our theme parks in the U.S. have performed exceptionally well and we look forward to working with our partners to achieve that success in Japan as we plan to introduce significant attractions at USJ over the next five years,” added NBC Universal CEO Steve Burke.

  • Hathway – MSM Media Distribution resolve differences, end dispute

    Hathway – MSM Media Distribution resolve differences, end dispute

    MUMBAI: Multi system operator (MSO) Hathway Cable & Datacom and Multi Screen Media’s distribution arm MSM Media Distribution (MSMMD) have finally put an end to their very public dispute.

     

    Hathway subscribers in phase I and II were greeted with a scrolling message on their screens, which informed them about restoration of MSM channels.

     

    Commenting on the development, a senior Hathway spokesperson told Indiantelevision.com, “We have mutually agreed to renew our deal with MSM in DAS and analogue markets post a meeting yesterday. The MSM bouquet channels have been reinstated in our packages.”

     

    It all started on 14 August when Telecom Disputes Settlement and Appellate Tribunal (TDSAT) had directed Hathway to pay Rs 14.56 crore towards subscription dues to MSMMD for DAS Phase I till the expiry of the agreement i.e. 31 October, 2015 in three instalments.

     

    Hathway in reply to that said that it will not renew the contract with MSMMD for DAS phase II. It may be recalled that this contract between the two expired on 31 March, 2015 and was not renewed by Hathway then.

     

    Commenting on the entire development a senior media observer said, “It’s good that both Hathway and MSM Media have kept the interests of cable TV subscribers in mind and ironed out their differences. A lesson to be learnt from their dispute and the resolution thereafter is that MSOs, DTH players and broadcast networks need to refrain from washing their dirty linen in public. Commercial disputes between two parties need to be resolved behind closed doors and not in the public glare of the media. Using the media for one’s own ends only sends out a bad signal that the industry has yet to mature to government, the regulator and potential investors in India’s video and broadband distribution sector.”

     

    Speaking to this website, Maharashtra Cable Operators Federation (MCOF) president Arvind Prabhu said, “It’s a great move firstly for consumers and secondly for the ecosystem. We are glad that they sorted it out amongst themselves. Having said so, we are now waiting to see how Sony or Hathway compensate the mental and commercial losses of last mile operators (LMOs). Huge number of cable subscribers have shifted to DTH during the dispute. We have given a representation to Hathway from the Aurangabad association but if they don’t do anything, we will go to TDSAT. The ecosystem needs mutual understandings, stakeholders should not let the subscribers suffer because of their individual benefits.”

     

    At the time of filing this report, MSMMD spokesperson was unavailable for comment.

     

    For the time being Hathway subscribers who missed out Messi and Ronaldo dribbling their way through to the nets can enjoy the highlights and wait for the weekend to catch some live LA Liga and Italian Serie A action on Sony Six and Kix for the first time this season. The sports expertise of MSM acquired the broadcasting rights of the two flagship football tournaments this year but before the commencement of the season the two stakeholders landed into dispute which resulted in fans missing the matches.

  • Q2-2015: US Cable industry: Internet, biz services continue as growth drivers; video continues to lose subscribers

    Q2-2015: US Cable industry: Internet, biz services continue as growth drivers; video continues to lose subscribers

    BENGALURU: The cable industry in the US continues to bleed video subscribers, albeit slower than earlier, while internet and business services continue to be growth drivers in terms of subscription numbers and revenue, if one were to go by the results reported by five major players in the US for the quarter ended 30 June, 2015 (Q2-2015). Overall, YoY and QoQ subscription numbers or customer relationships of the bigger three of the five players in this report have increased.

    The five players in this report are Comcast Inc., Cable Communications segment, the largest player by far among the sample players in this report; Time Warner Cable, Inc., (TWC), a little less than half the size of Comcast’s Cable communications segment in terms of revenue; Charter Communications with revenues that are less than half again as TWC’s. Cablevision, the fourth player in the sample had a little more than two-thirds of Charter’s revenues in Q2-2015, while the smallest, Suddenlink whose major operating areas includeArizona, Arkansas, Louisiana, North Carolina, Oklahoma, Texas, West Virginia, had revenue that was a little more than a third of Cablevision’s revenue in Q2-2015.  

    Despite the continued slide in video customer relationship, the combined sum of video subscribers in Q2-2015 of the five entities is about 4.09 crore or almost two thirds (62 per cent) of the 6.6 crore video subscribers through wire in the US as of 2013. The five players in this report are generally considered amongst the biggest players in the US cable television industry. All have three major revenue streams – Video, Internet and Voice (VIVE).

    Note: (a) 100,00,000 = 100 lakh = 10 million = 1 crore

    (b) While denominations for $have been mentioned in millions or billions where applicable, denominations for numbers have been mentioned lakhs and crores.

    (c)Residential customer relationship numbers have been used in this report wherever the breakup has been mentioned in SEC filings by the concerned entity.

    (d) The results and the conclusions in this report may not necessarily reflect the true trends and nature of the cablecommunications industry in US.

    It is noteworthy that an even smaller company, Mediacom Broadband alone, without Mediacom LLC numbers, had revenue of about $246 million (Rs 1626.53 crore, ($1 = Rs 63.5363 as on 30 June, 2015) in Q2-2015, many times more than the revenue generated by the largest cable company in India. Mediacom Broadband’s revenue was less than half $608.02 million revenue reported by Suddenlink in Q2-2015.

    Performance in Q2-2015

    In general, six streams add to most of the five entities’ revenue – three products -Video, high speed Internet, Voice; Business Services (BS); Advertising; and Other. Collectively, the first three have been given the acronym VIVE by the author. Generally VIVE numbers, be they subscription or revenue indicate residential subscribers and revenue from these subscribers in this report. Some of the companies don’t indicate the breakup of VIVE revenue from business services, and hence these figures could be included in the overall VIVE revenue .This reports examines VIVE and touches briefly upon business services of some of the players in this report later on.

    In general, Internet has been driving growth, both in terms of revenue and subscription numbers. Contribution by business services is growing and is in the sub or low double digits in terms of percentage of overall revenue.

    Subscription numbers in Q2-2015

    Figure A below displays the subscription numbers of the five players considered in this report. Individual as well as combined Video subscribers or Video customer relationships have dropped year-on-year (YoY) and quarter-on-quarter (QoQ) during Q2-2015. Internet subscription numbers of all the five players in this report have increased, while Voice subscription numbers of four of the five companies have gone up. Cablevision has reported a small dip in Voice subscription numbers in Q2-2015.

    YoY and QoQ combined Total Customer Relationships of all the five players have gone up in Q2-2015 by 2.03 per cent and 0.24 per cent respectively. In Q2-2015, the combined Total Customer Relationships of all the five companies was 525.64 lakh as compared to 515.19 lakh in Q2-2014 and 524.41 lakh in Q1-2015. Though QoQ customer relationships of all the five companies have gone up, in the case of Cablevision and Suddenlink, customer relationships were actually lower in Q2-2015. Cablevision saw a decline 1.52 per cent in Q2-2015 to 31.17 lakh as compared to the 31.65 lakh in Q2-2014, while Suddenlink saw a QoQ decline of 0.86 per cent to 14.39 lakh in Q2-2015 from 14.52 lakh.

    Video

    As mentioned above, the US Cable communications industry continues to lose video customers. YoY, the combined Total Customer Relationships declined 1.53 per cent to 409.40 lakh in Q2-2015 as compared to the 415.74 lakh. QoQ the decline was 0.47 per cent from 411.32 lakh. Suddenlink saw the highest YoY drop among the five players in this report in Video subscribers at 5.66 per cent (lost 66200 subscribers) to 11.03 lakh in the current quarter as compared to 11.69 lakh in Q2-2014. Suddenlink’s YoY decline in Video customers was also the steepest among the five companies at 2.6 per cent (lost 29400 subscribers) from 11.32 lakh in Q1-2015. 

    In absolute numbers, TWC had the highest YoY decline of video subscribers among the five players in the current quarter of 2.27 lakh to 107.74 lakh from 110.11 lakh. QoQ, Comcast’s Cable communications has seen the largest fall in absolute numbers among the 5 companies, a fall of 69,000 (0.31 per cent) Video subscribers in Q2-2015 to 223.06 lakh from 223.75 lakh in the immediate trailing quarter.

    Internet

    Overall, the five entities reported a 6.07 per cent YoY increase in Internet subscribers in Q2-2015 at a combined total of 436.33 lakh from 411.36 lakh in the corresponding year ago quarter and a one per cent increase from 432.01 lakh in the immediate trailing quarter. The five entities gained 24.965 lakh subscribers YoY and 4.322 lakh subscribers QoQ in Q2-2015. As is obvious, the number of internet subscribers exceeds the number of video subscribers.

    All the five companies in this report witnessed a YoY increase in Internet subscribers. Charter had highest growth in percentage terms at 8.6 per cent ( gained 3.93 lakh subscribers) increase in Internet subscription in Q2-2015 with the subscriber base reaching 49.61 lakh from 45.68 lakh in the corresponding year ago quarter and 1.43 per cent higher (gained 70000 subscribers) QoQ from 48.91 lakh. 

    QoQ, both TWC (gained 7.47 lakh subscribers) and Charter reported 1.43 per cent growth in Q2-2015, while Comcast and Cablevsion reported 0.80 (gained 1.79 lakh subscribers) and 0.51 growth (gained 14000 subscribers) in Internet subscribers. Suddenlink reported a slight QoQ decline of 0.24 per cent (lost 2800 subscribers) to 11.81 lakh in the current quarter as compared to the 11.84 lakh in the immediate trailing quarter.

    In absolute numbers, Comcast Cable Communications reported the highest YoY and QoQ Internet subscription growth among the five companies in Q2-2015 at 12.77 lakh (six per cent) and 1.79 lakh (0.80 per cent) respectively.

    Voice

    The five entities reported a 6.19 per cent YoY growth and a 1.48 per cent QoQ growth in combined Total Voice Subscriber base of 224.55 lakh in Q2-2015. This translates to a YoY increase of 13.092 lakh and QoQ increase of 3.275 lakh subscribers in absolute numbers.

    Except for Cablevision, the other four players reported YoY and QoQ increase in subscription numbers. Cablevison reported a YoY decline of 2.86 per cent (65000) and a QoQ decline of 0.32 per cent (7000) in Voice Subscribers in Q2-2015 to 22.08 lakh from 22.73 lakh in Q2-2014 and from 22.15 lakh in Q1-2015 respectively.

    The highest YoY growth in Voice subscribers among the five players in this report in Q2-2015 in percentage as well as absolute numbers was 17.71 per cent and 8.81 lakh by TWC, which saw its numbers grow to 58.56 lakh from 47.75 crore in Q2-2014. TWC also reported the highest QoQ growth in percentage and absolute terms in Voice subscribers among the five players by 4.5 per cent and 2.52 lakh to 58.56 lakh in Q2-2015.

    Single, double and triple play numbers

    Four of the five players have indicated the breakup of their single, double and triple play customer relationships.

    Generally, all have been losing single play and double play subscribers either because of conversion from single to double or triple play, or from double to triple play, or because of subscriber churn, while Suddnelink has also reported numbers than indicate growth in its non-video customer relationships.

    Revenue numbers in Q2-2015

    Please refer to Fig A1 below. Combined Total revenue of all the five players in this report increased YoY 2.46 per cent ($517 million) to $21566 million from $21049 million in Q2-2014, but declined 0.2 per cent ($43 million) from $21609 million in Q1-2015. Charter saw the largest YoY increase of total revenue in percentage terms among the five at 7.57 per cent ($171 million) in Q2-2014. In absolute numbers, Comcast Cable Communications segment reported the highest YoY growth of total revenue of $700 million (6.35 per cent) and QoQ growth of $399 million (2.62 per cent) in the current quarter. QoQ, Suddenlink saw the highest growth in Total revenue among the 5 players in percentage terms of 3.36 per cent ($28 million) in Q2-2015.

    Combined YoY and QoQ VIVE revenues of all the five entities increased 5.15 per cent ($890 million) and 1.43 per cent ($257 million) respectively in Q2-2015$ 18170 million. Here also, Charter reported the highest YoY growth in percentage terms of VIVE revenue of 7.07 per cent ($134 million) in Q2-2015. QoQ, Suddenlink reported the highest growth among the five players in percentage terms at 3.49 per cent ($31 million) in the current quarter.

    As far as absolute US dollars are concerned, Comcast’s Cable Communications segment reported the highest YoY and QoQ growth at $455 million (5.07 per cent) and $154 million (1.66 per cent) respectively in Q2-2015.

    Among the three products, Video was the biggest contributor to revenue of all the five companies in this report. Video’s contribution to VIVE revenue was in the range of 50 to 60 per cent. Internet contributed between 25 and 35 per cent and Voice between 6 to 17 per cent to VIVE revenue.

    YoY, combined Total Video and combined Total Internet revenue increased by 2.04 per cent and 13.22 per cent respectively, while Voice revenue declined by 1.89 per cent. QoQ, Video, Internet and Voice revenue in Q2-2015 increased by 1.08 per cent, 2.41 per cent and 0.15 per cent respectively.

    Video

    Despite a drop in Video Customer Relationships, combined Total Video revenue YoY increased by $204 million and increased QoQ by $109 million to $10198 million in Q2-2015. The highest increase in Video revenue among the five players was by Comcast at 3.66 per cent and $192 million in Q2-2015, while Suddenlink saw its Video Revenue drop by 0.68 per cent and $2 million in Q2-2015.

    Internet

    Combined Internet revenue of the five players in this report increased by 13.22 per cent and $720 million YoY and increased QoQ by 2.41 per cent and $145 million to $$6171.4 million in Q2-2015.

    The highest YoY as well as QoQ growth in percentage terms of Internet revenue among the five players was by Suddenlnk with 17.07 per cent ($31 million) and 4.40 per cent ($9 million) respectively in the current quarter. In absolute US dollar terms, Comcast Cableshowed the highest YoY and QoQ growth at $282 million (10 per cent) and $57 million (1.87 per cent) respectively.

    Voice

    Though Voice subscription numbers have been growing, the combined Voice revenue of the 5 players declined YoY by 1.89 per cent ($35 million) to $1800 million. The combined voice revenue of the players increased marginally QoQ by 0.15 per cent ($3 million) in the current quarter. 

    The big three players – Comcast Cable Communications, TWC and Charter saw their YoY Voice revenue decline by 2.06 per cent ($19 million), 2.45 per cent ($12 million) and 6.9 per cent ($10 million) respectively. Cablevision and Suddenlink saw their YoY Voice revenue increase by 2.2 per cent ($5 million) and 2.53 per cent ($1 million) respectively.

    Comcast Cable Communications and Suddenlink saw their QoQ Voice revenues drop 0.33 per cent ($3 million) and 0.48 per cent ($0.25 million) in the current quarter, while TWC and Charter saw their YoY Voice revenues increase by 1.06 per cent ($5 million) and 0.75 per cent (one million) respectively . Cablevision’s Voice revenue remained flat in Q1-2015 and Q2-2015 at $232 million.

    Comcast Cable, TWC and Charter have indicated business services revenue in their quarterly filings. Please refer to Fig B below. As is obvious, business services revenue (BSR) has been going up in value as well as in terms of percentage of Overall or Total Revenue (OR)

  • Comcast Business forms new unit targeting Fortune 1000 companies

    Comcast Business forms new unit targeting Fortune 1000 companies

    MUMBAI: Comcast Business has created a new Enterprise Services unit that will target Fortune 1000 companies and other large enterprises that have multiple locations nationwide.

     

    This new enterprise-level service and delivery organisation will offer a portfolio of managed enterprise solutions that includes Broadband, Ethernet, Voice, Router, Security, Business Continuity and Wi-Fi. The company also acquired a managed services company and has signed network agreements with other cable operators to further support national accounts.

     

    Comcast Business has already signed customers from multiple industries, including financial services firms, banks, hospitality chains and retailers.

     

    Technology industry veteran and former SpaceNet Inc. CEO Glenn Katz will lead the new group within Comcast Business.

     

    “We’re committed to expanding and enhancing our offerings for businesses of all sizes, and having the expertise, tools and portfolio in place to deliver customised service packages to nationwide enterprises is a key part of our growth strategy. Large companies need a provider who can help them manage complex networks, develop business continuity plans and integrate cloud-based applications. Our entry into this segment of the market will introduce new innovation and choice,” said Comcast Business president Bill Stemper.

     

    Comcast’s Enterprise Services team will design, build, implement and manage customised communications networks for large enterprise customers who need managed Broadband, Ethernet, Voice, Router, Business Continuity and Wi-Fi services in locations across the country. The new product portfolio will be branded “Managed Enterprise Solutions.”

     

    According to IDC, a Framingham, MA-based IT industry analyst firm, the US market for managed services is expected to increase from $29 billion in 2014 to $52 billion in 2019.

     

    “Comcast Business’ entry into the enterprise network services market takes its value proposition of competitively priced high-speed, high availability connectivity to a demanding set of customers looking for alternatives to the incumbent national telcos and/or do-it-yourself multiple provider solutions. With its national network reach and end-to-end service delivery capabilities, Comcast is well positioned to serve the outsourced network management needs of large business that require increasing network capacity to serve expanding multi-site requirements,” added IDC research VP Melanie Posey.

     

    To help Comcast Business support these national accounts, it recently acquired Contingent Network Services; a technology deployment and managed services company that helps enterprise customers outsource their day-to-day network operations. Contingent provides deployment and managed services to a number of well-known national brands. The company will become a wholly-owned subsidiary of Comcast Business and will continue to operate under the Contingent brand name.

     

    “Contingent’s mission is to provide clients with high-quality, cost-effective network and deployment services wherever and whenever needed for reliable communications across an enterprise, and we couldn’t be more excited for them to join our team. By joining forces with Comcast Business, Contingent can further expand their reach and take advantage of Comcast’s extensive fiber and hybrid fiber coax network to give enterprises the optimal network experience to meet their business and technology requirements,” said Katz.

     

    Comcast Business has also reached network agreements with leading cable operators making it easier to serve national clients with local offices and locations that span different geographies.

  • Stockmarket reacts to buzz on FDI raise to 100 per cent in DTH, cable TV firms

    Stockmarket reacts to buzz on FDI raise to 100 per cent in DTH, cable TV firms

    MUMBAI: Is the government going ahead with the Telecom Regulatory Authority of India’s August 2013 recommendation of allowing a hike in foreign direct investment (FDI) in content carriage companies to 100 per cent from the current 74 per cent? And in news channels from 26 per cent to 49 per cent?

     

    No formal announcement has come as yet, but the buzz is that  the Narendra Modi-led government is indeed looking at TRAI’s recommendations which have been gathering dust on the ministry of information and broadcasting’s shelves at Shastri Bhavan in Delhi.  A while ago finance and MIB minister Arun Jaitley had stated that technology had made FDI limits on news channels redundant.

     

    Apparently, an inter-ministerial committee is examining that proposal (which was part of TRAI’s consultation paper released in 2013)   along with those relating to hiking the foreign investment limits in cable TV direct-to-home (DTH), internet TV, mobile TV, HITS (headend-in-the sky) and teleports from 74 per cent to 100 per cent.

     

    But the buzz generated by a Press Trust of India report was enough to lead to  a rise in the share prices of at least two listed content carriage firms  – the Essel group owned Dish TV and the Sameer Manchanda promoted DEN Network on 21 September. DEN, along with the Rajan Raheja promoted Hathway Cable have been enabling themselves to be in  a position to hike the foreign investment limits in their firms  to 74 per cent.

     

    Dish TV shares closed at Rs 116.45, 6.59 per cent higher than its previous close. To be fair to Dish TV, the share is being tipped by almost every investment advisory firm as a stock to be bought as it has been showing an improvement in its financial performance.

     

    At an early stage of the day (Monday) Den Network’s share were up by 1.53 per cent priced at Rs 129. The day, however,  ended with  its shares at Rs 126 down by 0.35 per cent compared to the previous close. Other listed MSOs such as  Siticable, Hathway and Ortel Communications, also saw similar downward movement in their stocks after climbing earlier in the day.

  • Technicolor raises €375m loan to fund Cisco STB biz & The Mill acquisitions

    Technicolor raises €375m loan to fund Cisco STB biz & The Mill acquisitions

     

    MUMBAI: To finance the recent acquisitions of Cisco’s set-top-box (STB) business as well as the purchase of British visual effects studio The Mill, French media company Technicolor has raised a €375 million five year incremental term loan maturing, which is due to be syndicated in the coming days.

     

    Additionally, the company will also increase its capital with preferential subscription rights of up to €225 million.

     

    The combination of the incremental term loan and of the rights offering would allow Technicolor to maintain a healthy balance sheet pro forma for the acquisitions of Cisco’s Connected Devices business for a sum of €550 million) and The Mill for €259 million and appropriate financial flexibility for future growth.

     

    The envisaged financing transactions should result in a pro forma expected leverage (Net Debt to Adjusted EBITDA) of 1.7x at end 2015 and include:

     

    1) An incremental term loan of €375 million maturing in 2020 fully underwritten by Goldman Sachs, the syndication of which will start in the coming days;

    2) A Rights Offering of up to €225 million, which Technicolor will launch after the publication of its Q3 2015 revenues. Banks have been appointed and are committed to underwrite the Rights Offering, subject to customary conditions; and

    3) Approximately €100 million of cash-on-hand will also be used to finance the acquisitions.

     

    The Incremental Term Loan: Concurrent with the announcements of the strategic acquisitions of Cisco Connected Devices on 23 July, 2015 and of The Mill, Technicolor will launch an Incremental Term Loan in €375 million equivalent aggregate principal amount, to help fund those transactions in conjunction with the planned Rights Offering and cash on hand. The Incremental Term Loan is being led by Goldman Sachs International as Sole Lead Arranger and Bookrunner.

     

    The Rights Offering: Technicolor will raise up to €225 million of new equity through a capital increase with the issuance of new ordinary shares. Existing shareholders will receive preferential rights to subscribe for new shares. The Rights Offering will be launched post announcement of Q3 2015 revenues on 21 October, subject to market conditions and receiving the visa from the French Autorité des marchés financiers. 

     

    The terms of the Rights Offering will be announced at the time of launch. Banks are committed to underwrite the Rights Offering, subject to customary conditions. Upon the launch of the Rights Offering, the company will publish a prospectus in respect of the Rights Offering, which will be available on the website of the company.

     

    In addition, as was previously announced, the acquisition of Cisco Connected Devices will be partially financed through the delivery to Cisco of Technicolor newly-issued shares.

  • Ground level challenges delay digitsation benefits to MSOs & broadcasters: ICRA

    Ground level challenges delay digitsation benefits to MSOs & broadcasters: ICRA

    BENGALURU: In a vast country like India, ground level challenges is a key reason that has delayed in multi-system operators (MSOs) and broadcasters reaping the benefits of digitisation. The digitisation of the TV distribution industry, initiated in 2011, is yet to achieve its target of addressability and transparency in billing systems, which was expected to yield significant benefits to MSOs and broadcasters as per a report by Indian investment and ratings agency ICRA on the Indian Media and Entertainment Industry – TV Distribution (September 2015).

     

    Some of the noteworthy points mentioned in the report are as follows:

     

    As MSOs struggle with last mile ‘addressability’ hurdles for its digitised customer base, the industry’s ability to deliver customised / value added content remains restricted. As a result, the expected benefits of higher subscription revenues for MSOs and broadcasters are yet to be achieved. The end consumers are also yet to benefit from targeted subscription packages, which were expected to optimise the user experience. ICRA believes that end consumers are also yet to benefit from targeted subscription packages. Roll out of channel packages by MSOs remains crucial for driving ARPU growth and profitability as content costs increase.

     

    Implementation challenges and slow progress in Phase I and Phase II markets have restricted monetisation for MSOs due to slow progress in Consumer Application Form (CAF) collections – effectively LCOs have retained their control over the subscriber base, disputes in sharing of entertainment tax, ARPU is constrained and as yet determined on per subscriber basis, and not on basis of channel packages chosen.

     

    While distributors have witnessed 25-30 per cent decline in carriage income, overall carriage income for distributors has remained buoyant because the disbanding of channels aggregators has given distributors leverage with smaller broadcasters and new channels. Also, new channel launches and wider audience measurement metrics will keep carriage revenues buoyant for MSOs.

     

    DTH players and regional MSOs are likely to take the lead in implementation of Phase III and Phase IV. Extension of deadline for Phase III and Phase IV markets provides adequate time for resolving ground issues as well as coverage for large subscriber base; however lower purchasing power and price sensitive nature of subscribers make investments less attractive. DTH players remain well positioned for tapping growth opportunities in Phase III and Phase IV markets due to inherent technology advantage and easier access to cable dark areas.

     

    Credit profiles unlikely to improve significantly on account of debt funded capex plans.  Longer than expected timelines in monetisation opportunities, higher content costs for digitised areas coupled with ongoing investments for Phase III and IV would keep the return and coverage indicators of MSOs muted in near term. 

     

    While a significant amount of equity funds supported the investments in Phase I and II markets for major MSOs, investments for penetrating Phase III and IV areas, broadband penetration as well as offering value added services (such as Video on Demand) may be largely funded through debt; correspondingly the borrowing levels are expected to remain high over the next two years while the profitability generation from digitised areas stabilise gradually.

     

    In spite of execution delays, in the longer term, digitisation is expected to benefit MSOs, DTH operators and broadcasters through greater customer wallet resulting in higher subscription revenues.

     

    Sizeable subscriber penetration opportunity persists in Phase III and Phase IV markets. The market share dynamics between MSOs and DTH players are expected to change with an uptick in run rate for DTH operators (approximately 20-25 per cent market share in Phase I/II) as the industry progresses towards the Phase III and Phase IV.

  • Hathway & GTPL to jointly negotiate contracts nationally with broadcasters

    Hathway & GTPL to jointly negotiate contracts nationally with broadcasters

    MUMBAI: Hathway and GTPL have entered into a mutual alliance to jointly negotiate contracts related to content and carriage with all broadcasters going forward.

     

    This would include all-India subscription agreements as well as carriage-cum-placement agreements for Digital Addressable Systems (DAS) notified and Non-DAS markets. Additionally, all commercials mutually agreed by both entities with the broadcaster will be applicable to all its subsidiaries and associate entities.

     

    Hathway video business president T.S. Panesar said, “Our mutual understanding with GTPL will bring in better synergies with a more focused, proactive approach in order to build clarity within the value chain, avoid duplication of time and effort, thus, paving the way for systematic functioning.”

     

    GTPL managing director Anirudh Singh Jadeja added, “We are happy to align collectively to negotiate all further deals as it will ensure that resources are best utilised and optimum output is achieved.”

  • NXT Digital ‘hits’ Indian market with total outlay of Rs 5000 crore

    NXT Digital ‘hits’ Indian market with total outlay of Rs 5000 crore

    NEW DELHI : After three and half years of struggle, Hinduja’s Headend In The Sky (HITS) platform NXT Digital finally got rolling with a total project outlay of approximately Rs 5000 crore. The mammoth investment will be utilised as the business continues to design and develop new products and services for a growing customer base as well as strive to enhance its own standards.

     

    Information and Broadcasting Minister Arun Jaitley officially launched the venture in the presence of Hinduja Group chairmanAshok Hinduja and Grant Investrade MD Tony D’Silva.

     

    Launching the platform, Jaitley said, “Multiple carriage technologies will provide customers more choice as to which technology platform to choose.”

     

    While Hinduja Ventures has set an initial budget of Rs 5000 crore for the project, the chairman is open to investing more if necessary. “We are here to aggressively back this initiative and if necessary we will invest double or triple the allocated budget. Last mile operators (LMOs) are the one who started the business by laying the first cable and this venture is for them,” Hinduja said.

     

    The HITS project will not only facilitate over 100 million homes go digital in Phase III & IV digitisation markets but will also raise the standards of quality of service. 

     

    To acquire the base model of a Cable Operators Premises Equipment (COPE), one has to pay Rs 10.60 lakh while the premium one can be acquired after a payment of Rs 14 lakh. The amount appears high for the LMOs but Hinduja said that the Group also has a finance group, which would help the LMOs. “The project has a lot of securities and the investment is certain to provide returns so it is a safe investment. We have insurance schemes for the operators so their investment is safe,” he added.

     

    According to D’Silva, the consumer will have to pay a maximum of Rs 50 per month. NXT Digital is presently equipped to beam up to 500 channels and this capacity can be raised to 1000. The earth station is in Sector 62 in Noida in the National Capital Region (NCR) of Delhi. NXT Digital has six transponders at present.

     

    D’Silva also noted that it was interesting that the last two phases of Digital Addressable Cable TV System (DAS) provided for only 32 per cent of the revenue though they would cover a much larger area.

     

    The DAS Phase III and IV areas, which are estimated to have more than 120 million home, are the prime focus of NXT Digital. To succeed in occupying 15 per cent of the market, the company will have to provide set top boxes (STBs) to 20 million home, which is a huge demand to supply. However, Hinduja is bullish about meeting the demand on time and optimistic that the platform will not face a situation where there will be shortage of boxes.

     

    NXT Digital is also positioning itself as a adopter of the government’s Make in India, Digital India and Skill India initiatives, which according to Hinduja was the byword for the Group. The LMOs in the DAS III and IV areas have to be skilfully equipped with modern technologies that NXT Digital will be bringing in.

     

    Asked about how his system was different from the already existing – NSTPL’s JainHits – Hinduja said that the aim of the Hinduja Group was to protect the LCOs because it was they who had built this industry in the late eighties. “Therefore, the LMO will not lose out in any way, will be fully in charge of his own company, and will have full freedom to operate in his own way,” he said.

     

    When queried as to why it had taken the Group three years to get a licence when there was no cap on HITS, Hinduja said, “Formalities take time.”

     

    He also said that wherever someone tries to bring in transparency in any system, there are objections. He was also conscious that there was competition in the field and this may even lead to some legal hassles, but his Group was prepared for everything.

     

    Hinduja said that he was conscious of the matter relating to NSTPL pending in TDSAT, which sought that broadcasters treat HITS players at par with multi system operators (MSOs). He said the NXT Digital viewpoint had been presented at the hearings.

     

    Senior Hinduja executive Aubin Das said that the NXT Digital platform also took efforts to curb the issue of piracy and if LMOs attempt to put on the channel of a broadcaster in the slots meant for local channels, it could be immediately traced and stopped.

     

    Commenting on the training and development initiatives Castlemedia director Vynsley Fernandes said, “We are travelling to every nook and corner of the country to skilfully equip and train people about our technological upliftment and it is a chain system. Around 200 people have been trained under a ‘Train the Trainer’ programme and they will train others. And we are not equipping them only about NXT Digital we are introducing them to the next generation.”

     

    D’Silva said that under NXT Digital, the LMO gets to continue their ownership, enter into broadcasting deals, do packaging and pricing according to market demands, acquire STBs at cheaper rates, run up to 16 local channels, and compete with direct-to-home (DTH) operators.

     

    He added that DTH was on Ku-Band, which got disturbed in rainy or inclement weather, but HITS being on C-Band will not be disturbed. Furthermore, the HITS headend was on ground while DTH had to depend on satellites. Furthermore, NXT Digital will be able to service both DAS and non-DAS areas.

     

    NXT Digital focused marketing and subscription drive in the Phase III & IV markets. The company has so far travelled across 400 districts in 20 states to contact and inform the cable fraternity there about its offerings. As of now it has 14 vans touring various parts of the country to give live demonstrations to LMOs and LCOs. 

      

    Welcoming the move, Maharashtra Cable Operators Federation president and task force member Arvind Prabhu said, “I would like to congratulate AP Hinduja, with this initiative he actually kickstarts the process of digitisation. Mr Hinduja thought about the last mile operators and came up with NXT Digital, which will help LCOs getting their due. The other HITS platform is providing the COPE at a cheaper price and that will be a challenge. The pricing that we got from them are really good but considering the fact that DAS III and DAS IV areas do not come under ratings I believe there can be further negotiation with the broadcaster. Overall I believe it’s a move for the LCOs.”

     

    LCO from Assam and Task Force member Md Iquebal Ahmed also welcomed the HITS venture. “Operators cannot afford headends and MSOs take total advantage of it and in that context, it’s a great initiative. But the content pricing needs to come out transparently. Affordable pricing is what we are looking forward to.”

     

  • Hathway to live telecast Mumbai’s Ganesh festivities across India

    Hathway to live telecast Mumbai’s Ganesh festivities across India

    MUMBAI: In a first of its kind initiative, multi system operator (MSO) Hathway will live telecast the festivities of Ganesh Utsav 2015 across India. 

     

    Hathway will telecast 24×7 all the action from the six most prominent Ganesh Mandals of Mumbai city from 17 – 27 September, 2015.

     

    A special, dedicated channel no. 47 on Hathway will broadcast celebrations across the city of Mumbai through the 11-day period till the big Visarjan Day.

     

    The six Ganesh Mandals are: Lalbaugcha Raja, Ganesh Galli, GSB Mandal – Ram Mandir (WADALA), Sidhivinayak Mandir, Khetwadi – 12th Galli and Dagaduseth – Pune. On the 11th day, Hathway will also air the Visarjan live from Mumbai’s Chowpatty.

     

    It may be recalled that earlier, Shemaroo Entertainment had also acquired the rights for live video content distribution of Lalbaugcha Raja across mobile platforms.