ITV

Category: DTH

  • Reliance Bluemagic receives LoI for DTH ops

    Reliance Bluemagic receives LoI for DTH ops

    MUMBAI: The direct-to-home broadcasting segment is set to witness some more action with the government clearing the application of the Anil Dhirubhai Ambani Enterprises. The proposed DTH project under the brand name Reliance Bluemagic, a subsidiary of Reliance Energy, has received the letter of intent (LoI).

    This will be the fourth licence issued by the government to a private operator. Nonetheless, even after the letter of intent is issued, it would be a while before the letter of approval and an actual DTH license is handed over to the Reliance Bluemagic.

    According to sources close to the government and DTH developments, the information and broadcasting ministry has issued the LoI. “The absence of any foreign investment or partner has simplified matters,” the officials pointed out.

    When contacted, senior officials at Reliance refused comment on the developments.

    Once the letter of approval is issued, the company would be granted a licence after depositing a bank guarantees of Rs 100 million.

    Reliance Bluemagic had applied under for a DTH licence under the name ‘Reliance Skymagic last year. However, News Corp had issued a caution notice, asserting ‘Sky’ was its registered trademark under which the company runs its DTH operations in UK under the name of BSkyB. Consequently, the trademark Sky was also registered in India.

    In the present scenario, besides pubcaster Prasar Bharati, which manages DD Direct, there are two private DTH service providers. Dish TV and Tata-Sky already operating. Although South Indian media major Sun Group’s Sun Direct TV received the LoI last year, it has yet to kick off operations.

    The government has set stringent entry norms for DTH operators. According to the norms, the applicant has to be registered under the Indian Company’s Act, 1956, while its total foreign equity holding should not exceed 49 per cent, of which not more than 20 per cent should be the FDI component. It also says the applicant company must have Indian management control, with majority representatives on board, and the company’s CEO must be a resident Indian.

    Reliance’s presence in DTH, FM radio and other segments of media and entertainment means that the group will enable itself to leverage its brand across all platforms.

  • Tata Sky launches pay-per-view service

    Tata Sky launches pay-per-view service

    MUMBAI: Tata Sky has announced the launch of Showcase, its dedicated pay-per-view movies service. With this service, Tata Sky promises to offer new Hollywood and Bollywood blockbusters to the customers.

    Showcase, the pay-per-view will launch with the movie Taxi No. 9211, screening on multiple channels, offering subscribers a number of convenient viewing options. The movies will be screened without any ad breaks.

    Priced at Rs 75 per movie, the service will provide viewers with a convenient and economical alternative to watching movies in cinema halls, according to an official release.

    The original prints of all the films will be sourced directly from their producers and digital satellite television transmission will ensure DVD quality picture and CD quality sound throughout the movies.

    Also, another advantage for subscribers is that they can chose to watch the movies at a convenient time, when they are free from household responsibilities.

    Tata Sky Ltd MD and CEO Vikram Kaushik said, “The launch of Showcase helps us propel our objective to provide our subscribers with maximum convenience. This service can be enjoyed equally by every family member and undoubtedly will recreate the experience of watching a movie in the theatre, in the comfort of the home. The freedom to choose the time of viewing and the liberation from advertisements while watching one’s favourite movies will be universally welcomed.”

    To purchase a movie, a subscriber will need to call the Tata Sky helpline and make a request for the movie, indicating the desired time slot. Orders can be placed up to five minutes prior to the film’s start, informs the statement.

    Tata Sky’s satellite television service currently offers viewers 61 popular television channels including Star, Sony, Discovery, Disney, MTV, NDTV, ESPN Star Sports, National Geographic, Eenadu, TV Today, Asianet and many more.

    In addition, the service offers a total of six interactive services including Actve Khabar, Actve Newsroom, Actve Star News, Actve Games, Actve Sports and an on-screen guide. The service is available at a special price of RS 200 per month, inclusive of all taxes.

  • Growth of DTH in Asia Pacific likely to boost future consumer satellite services

    Growth of DTH in Asia Pacific likely to boost future consumer satellite services

    MUMBAI: The Asia Pacific region offers the strongest growth potential and opportunities in the next five years for Direct-to-Home (DTH) service providers, particularly multisystem operators (MSO).

    DTH video is the flagship service to establish a foothold in previously underserved emerging markets. By achieving economies of scale and providing quality local content, service providers can capture a huge and profitable consumer base.

    New analysis from global growth consulting company Frost & Sullivan, Asia Pacific Satellite DTH Market reveals that the total pay-TV market — covering nine Asia-Pacific countries — was worth $19.24 billion in 2005, and is forecasted to reach $45.20 billion in 2012. Satellite DTH services alone will account for approximately 46.3 per cent, or $20.91 billion, of the total pay-TV revenues in 2012.

    Frost & Sullivan research analyst James Lye says, “The reality of the next decade for DTH service providers is convergence. To create new revenue streams, providers need to shift beyond individual technology and service platforms towards an MSO model, reaching consumers through any efficient medium.”

    Consumers are increasingly looking to a single provider for integrated solutions — offering voice, data and video services. The Asia-Pac region offers unique opportunities as newly emergent communities demand telecommunication services in vast unwired areas. By using video content as the flagship offering, DTH providers can gain a strong position in the market and uncover ways of tapping into the lucrative voice and data demand.

    A DTH provider needs to achieve economies of scale, resulting in lower operating costs, breaking key price barriers for consumer adoption, as well as granting easy access to premium content. However, establishing a region-wide service can be hindered by stringent regulations prevalent in many Asia-Pac countries.

    “The lack of local language content often limits the potential customer base. Premium content will drive initial growth, but content relevant to the local or regional scene will sustain interest and customer loyalty” adds Lye.

    In the highly fragmented Asia Pacific market, it is important to provide not only premium global content, but also superior quality local programs to differentiate the service offerings from other available ones. The key to capturing the regional market is specialised content, inclusive of local sports, news and entertainment, which requires local production capabilities.

  • Sify capitalises on TV’s talent hunt craze as auditions go online

    Sify capitalises on TV’s talent hunt craze as auditions go online

    MUMBAI: Aspiring contestants waiting for endless hours in maddeningly long queues, organisers struggling to cope with the logistics pressure and complications – all kinds of chaos break loose when television channels conduct their national auditions for talent hunt shows.

    Sify Limited has spotted a good revenue opportunity here and is offering to make the whole process much simpler with the use of its national Iway network.

    The company has already associated with national networks such as Star India and Zee to offer them online solutions for the audition process. For example, Zee TV has associated with Sifymax for the video auditions of its upcoming talent hunt show Cinestars. The auditions will be held in 154 cities across India using the technology edge of Sify’s 3400 plus iWay cyber cafes.

    Similarly, Star India’s Vijay TV conducted video auditions for its comic hunt Kalakka Povadu Yaaru 2 (KPY 2) through Sify Iways in June.

    “Sify is ideally positioned with the Sify Iway network (over 3000 Iways across 154 cities) and the broadband portal, SifyMax.com, to manage massive customer video interaction activity like the Zee CineStar activity. The customer can take the tutorial on SifyMax and the auditions can be recorded at the Iways or uploaded online on SifyMax.com. The customer is charged for these services,” explains Sify Ltd Portals president V Sivaramakrishnan.

    Zee TV marketing head Tarun Mehra agrees, “Zee Cinestars is an all India contest and understandably the auditions demand a lot of hard work. But, with the help of Sifymax, we have simplified the whole process. The technology lessens the load and this helps us to channelise our resources to the other areas of the project.”

    Sify will be soon exploring the facility for an in-house talent hunt, the Net Jockey Hunt. The contest will be conducted at popular Malls in Mumbai for its city specific broad band portal www.mumbailive.in.

    Speaking on the strategy, Sivaramakrishnan offers, “Without any registration /subscription fee, we reach out and offer value added services (entertainment and information content in video format) to this segment. Almost 34 per cent of the Sifymax users access the internet via cyber cafe, through the Sify Iway cyber café chain. Hence we are leveraging on this huge strength.”

    On the revenue front, Sify is expected to push this revenue model to deliver this fiscal. However, Sivaramakrishnan refuses to divulge the target. “It is early days to comment on this,” he says.

  • Tata Sky and Zee Turner haggle on price

    Tata Sky and Zee Turner haggle on price

    NEW DELHI: Tata Sky’s talks with Zee Turner for its bouquet of channels have got stalled on the issue of price.

    While India’s second pay digital platform Tata Sky has evinced interest in the first two of the three bouquets of Zee Turner for Rs 42, the latter is insisting all its 29 channels should be taken.

    According to sources close to the negotiations, Zee Turner has conveyed that it’s ready to give all its channels to Tata Sky’s DTH platform for Rs 74 per subscriber, which is 50 per cent of the price that cable operators pay for the channels.

    Bouquet 1 of Zee Turner comprises Zee TV, Zee Cinema, Zee News, Zee Studio, Zee Bengali, Zee Gujarati, Zee Marathi, Zee Punjabi, Cartoon Network, Reality TV, CNBC, CNN, Zee Café, Zee Trendz, ETC, ETC Punjabi, Zee Jagran, Zee Smile, Zee Telgu and Zee Music..

    The second bouquet includes HBO, Pogo, Awaaz, VH1 and Zee Business. Zee Turner is soft bundling Zee Sports at a price benefit.

    The third bouquet, called Breakfree, consists of Zee Action, Zee Premier and Zee Classic, which air movies of different genre and are primarily available on Dish TV DTH platform.

    Interestingly, Zee Turner wants to keep Zee Sports out of the negotiations with Tata Sky, saying a deal for the sports channel — holders of cricket rights for matches to be played by India on non-ICC recognised venues — could be done separately.

    According to the sources, Zee Turner has reasoned that its demand is based on a recent ruling of a disputes tribunal in Dish TV vs Star case wherein Star was asked to make available its channel to Dish at Rs 27 per subscriber, which is 50 per cent less than the price cable ops pay.

    Zee Turner has further said that in the Dish vs Star case, when Dish had wanted select channels of Star, the Hong Kong-based broadcaster was unwilling to accede to the proposal.

    Extending the same logic, Zee Turner has conveyed to Tata Sky that it would have to take all its channels.

    However, Tata Sky is only interested in the first two bouquets of Zee Turner for a price of Rs 42 per subscriber per month.

    On August 8, while announcing the commercial launch of Tata Sky service in 300 cities, company’s MD and CEO Vikram Kaushik had admitted that talks with Zee Turner had not been concluded.

    Amongst the 55-odd channels being offered by Tata Sky presently to its subscribers, Zee and Turner channels like Zee TV, Zee Sports, Cartoon Network and Pogo and some third party products like HBO, Reality TV, Awaaz and CNBC TV18 are conspicuous by their absence.

    Country’s first pay DTH platform, the Subhash Chandra-owned Dish TV, boasts of 1.25 million subscribers.

    Pubcaster’s DD Direct+ claims a subscriber base of 3.5 to 4 million for its subscription-free service of free to air channels.

  • Tata Sky earmarks Rs 1.5 billion for marketing of service

    Tata Sky earmarks Rs 1.5 billion for marketing of service

    MUMBAI: Tata Sky, an 80:20 direct-to-home (DTH) joint venture between the Tata’s and Star Group, is moving ahead step by step towards a launch, the date for which is still being closely guarded by the company.

    While most of the money is now riding on an August-September commercial kick-off, the latest on the Tata Sky front is that it has earmarked approximately Rs 1.5 billion for marketing the DTH service across all platforms, traditional and non-traditional. From pilot MDU (multi-dwelling unit) projects in some cities of India to educating an average Indian about the advantages of a DTH service supported by the Tatas and Star, the game plan covers the full gamut.

    Tata Sky sources reveal that a major part of the Rs 1.5 billion marketing budget is likely to be spent during the festival season in India, starting late September and lasting till Christmas-New Year, when consumers have a tendency to splurge on goodies.

    Meanwhile, apart from Zee Turner family of channels, most other major TV channels are almost sure of finding a berth on the Tata Sky platform from day one of launch. Apart from the news channels, the likes of Times Now and Disney are already part of the test signals, people in the know say.

    It needs noting however, that except for ESPN Star Sports, no other broadcaster (and that includes the Star Network channels) have signed commercial agreements wth Tata Sky as yet.

    ESPN Star Sports, a joint venture between Disney and News Corp in Asia managing the two sports channels, have also to take a call on whether to bring in a new interactive sports channel, or confine the interactive aspects to the two existing channels. “We are still weighing all options,” a Singapore-based source in ESS said.

    Zee channels’ appearance on Tata Sky, meanwhile, would depend on how soon (or how late) Star comes to an agreement with Dish TV, now that Discovery-Sony One Alliance has come aboard country’s first DTH platform.

  • CAS rollout: Delhi HC ‘no’ to government plea for more time

    CAS rollout: Delhi HC ‘no’ to government plea for more time

    NEW DELHI: The Indian government yet again pleaded for more time to roll out CAS — six months to be exact — but a Delhi court has refused to accede to the request asking for a final stand by the next date of hearing.

    According to early information available with Indiantelevision.com, even the broadcast regulator pleaded for four to five months time to sort out CAS-related issues like pricing of TV channels.

    The Telecom Regulatory Authority of India (Trai) submitted to the Delhi High Court today that it has initiated a dialogue with the industry stakeholders on issues related to CAS and which would take few months time to complete and arrive at some consensus.

    However, the court was in no mood to listen to such pleas and fixed the next date of hearing for 19 July.

    The court observed that if the government is unable to sort out CAS matters, then it could also explore the possibility of going ahead with the rollout based on the Chennai model.

    It also said that the government has already used up three month’s time from 10 March when the first directive came to roll out CAS in Kolkata, Delhi and Mumbai within a month’s time.

    Chennai is the only city in India where CAS has been rolled out and running smoothly since 2003.

    Reference to do away with government mandated CAS was also mentioned in the court today during a hearing and reference was made of the relevant section from a draft Broadcast Bill 2006, which is being circulated amongst government organizations for feedback.

    A clutch of MSOs, including Hathway and INCablenet, had filed a case against the government on CAS in the Delhi High Court late 2004, alleging that keeping addressability in abeyance had resulted in financial losses to the petitioners.

  • Dish TV: Scaling up on numbers & value proposition

    Zee Telefilms chairman Subhash Chandra is on a roll. The resurgence of flagship Hindi entertainment channel Zee TV has come after years of slippage since Kaun Banega Crorepati catapulted Star plus into leadership position.

    But this is not just about Zee TV‘s prime time assault on Star Plus; it is also about how Chandra has streamlined his media empire to give it the right focus, resources and value. His announcement on 29 March: Zee Telefilms will be de-merged into four separate entities. While cable business will come under Wire and Wireless India Ltd (WWIL), Dish TV will handle the DTH operations. News and regional channels are being consolidated in Zee News Ltd. Under the umbrella of Zee Telefilms will be the newly launched Zee Sports.

    The “sum total of the parts” concept ignited the scrip which, once hovering around Rs 130-150 in mid-2005, has breached the 200-mark and closed today at Rs 222.

    In the second of a four-part series, Indiantelevision.com takes an in-depth look into the de-merged DTH business of Zee Telefilms.

    The battle for supremacy between News Corp chairman Rupert Murdoch and Subhash Chandra will be extended to the DTH arena this year. The commercial launch of Tata Sky, a 80:20 joint venture between Tata Group and Star (now expected to happen only some time in August-September), will see a hell of a scramble for subscribers with focus on pricing, quality of service, value-added services and marketing.

    Chandra‘s gameplan is to build a sizeable early lead before the fight for share in the market takes shape. Having launched Dish TV over two years back, he has already snapped up 1.15 million DTH subscribers. And he expects to mop up an additional one million by the end of this fiscal.

    Even before Tata Sky can settle down and get its products out of the door, Chandra is in a hurry to launch an array of value-added services. Movie-on-demand is already available and soon to launch is gaming and interactivity. The idea is to fill up the product portfolio as quickly as possible.

    Working on the content side, he has recently stitched a deal with SET-Discovery to offer a bouquet of 12 channels on his platform. Star‘s channels should also come on board, perhaps closer to launch of Tata Sky. Armed with full content, Dish TV will be able to aggressively target more urban and upscale subscribers in the course of the year.

    The DTH operations has already consumed a net expense of Rs 3.8 billion. A further investment of Rs 2.5 billion has been lined up over a two-year period, mainly to subsidise the set-top boxes (STBs). “But we are sitting on a dynamic model and if Tata Sky and us are aggressively competing on pricing, there is a possibility of the subsidy amount further increasing. It is a factor of what strategies we adopt to develop our subscriber base,” says Essel Group CEO of corporate strategy Rajiv Garg.

    Placing his bets on both cable and DTH, Chandra ensured that he started operations much before Murdoch could jump over the regulatory hurdles. The strategy was in place: mobilise the cable dark and rural subscribers, offer them a basic bandwidth of channels, tie up content as they come, drive in volumes and command clout.

    The start was slow. Then came the “dish-har-chhat-par” (a dish on every rooftop) pricing scheme of Rs 3,990 (almost halving the hardware prices and subscription fees for a year) last April and the market in specific territories just opened up.

    Targeting DD Direct‘s customers, Dish TV also announced a “Dish Freedom Package” plan in January. This offers viewers 40 channels in digital quality without charging any monthly subscription fee, but they had to make a one-time investment of Rs 2,690 in a digi box. Clearly, the strategy was to get into a different segment of customers and slowly entice them to upgrade to the other packages.

    Dish TV‘s subscriber base grew and by the end of FY06 it touched close to one million. Almost 70 per cent of the consumers came from the cable dry and smaller towns, but it suited Chandra to an extent by giving him a headstart over Murdoch. As he also has presence in cable TV, his muscle in the distribution business has grown.

    A fallout of this model, though: low ARPUs (average revenue per user). While revenue from DTH operations stood at Rs 818 million for FY06, net loss was at Rs 790 million on the back of subsidies and marketing expenses. The ARPU by the end of the year was hovering around Rs 190.

    The task this year will, thus, be to drive up the ARPUs to at least Rs 250. The content tie up with Sony and later Star will help achieve this. After the deal with SET-Discovery, Dish TV has increased the price of its basic tier by Rs 38. “By providing the first year subscription for free, Dish TV‘s financials don‘t reflect the paying capacity of the subscribers. But if consumers decide to continue with the service after this period, the incremental subscription revenues from the DTH venture would be sizeable. The problem will arise if they decide to drop out at the time of renewal,” says an analyst.

    Dish TV is also banking on value-added services (VAS) to realise more from subscribers. Says Garg, “Beginning 1 September, VAS will be accounted for separately from the ARPUs. We expect VAS to average Rs 40 per subscriber. Since this will be for a stretch of seven months, the average during the fiscal will work out to Rs 22-23,” says Garg.

    Dish TV‘s revenue projections look healthy. For FY07, the target is fixed at Rs 3.2 billion on a subscriber base of 2.4 million and an ARPU of Rs 250. And in FY08, the turnover is expected to touch Rs 8 billion as subscribers rise to 3.15 million and ARPU to Rs 310.

    An analyst at a trading firm is optimistic about Dish TV‘s growth. “Even after the launch of Tata Sky, the DTH market is large enough to provide space for growth to the two service providers,” he says.

    Dish TV, however, will continue to be in a net loss situation this fiscal. According to a report on Zee by a brokering firm, Dish TV‘s net loss will be Rs 368.4 million while subscribers are expected to grow to 2.07 million and revenue to Rs 3.29 billion on an ARPU of Rs 250. But the picture changes completely in FY08 and the operations become profitable, says the firm.

    The situation, though, is completely fluid and a lot will depend on how Tata Sky prices its services. DTH takeoff will also have to factor in the responses from the cable TV industry and the entry of other DTH operators like Anil Ambani‘s Reliance with its Blue magic offering and Kalanithi Maran‘s Sun Group with Sun Direct.

    So far, Chandra has been clever not to alienate the cable TV operators but play safe on both the platforms. Tata Sky, on the other hand, has drawn hostility from the operators with its MDU (multi-dwelling unit) technology in high-rise residential buildings.

    Prices could plummet if competition intensifies, putting profitability under threat. Tata Sky, in fact, has indicated a monthly subscription price of Rs 250 for all the Hindi channels and an upper-end fee of Rs 550, according to a dealer. It is also expected to subsidise heavily the hardware costs. “The pricing is very tentative at this stage and executives from Tata Sky will have a meeting with the dealers closer to date of launch,” he adds. Tata Sky CEO Vikram Kaushik was not available for comment.

    For an infant business venture, DTH operators may not worry about profitability at such an early stage. Their main concern will be to allow the market to expand, acquire customers, keep them locked over a longer period, and then make them pay more for various services. Volumes is what all of them will be hunting for.

    Dish TV‘s pricing strategy so far has reflected this line of thinking. It has promoted the DTH service packages with a lock-in period bundled along with the initial subscription. Says Garg, “The bulk of the subscription selling has been on the business of this bundle which includes a subsidy element. Subscription revenue, thus, starts typically one year after the creation of the subscriber relationship. So you would see these one million subscribers in FY06 gradually come into the subscription fold during this year.”

    Chandra, meanwhile, is sprucing up the distribution network. Dish TV recently tied up with HCL Infosystems for a five-year partnership to utilise the IT major‘s distribution and service support across the country. While Dish TV will immediately double its distribution reach with this tie-up, the alliance will enable HCL Infosystems to offer digital entertainment services as part of its digital lifestyle portfolio.

    Dish TV has also addressed another problem: how to increase offerings by accommodating more channels per transponder. It has recently tied up with Scopus Video Networks, a provider of digital video networking products. Having taken seven transponders on NSS-6, Dish TV can pack up to 150 channels using this compression technology.

    “Scopus‘ product line will help us achieve very high satellite utilisation and bring down costs on a per channel basis. We plan to implement this better compression technology within a month. We will be able to increase our capacity to 150 channels,” says Essel Group director of technology Amitabh Kumar.

    For pursuing plans of offering 200 channels, Dish TV has booked more transponders on NSS. Even when DD Direct Plus, Doordarshan‘s free DTH service, migrates from NSS-6 to Insat 4B, Dish TV will face no space crunch. “We can bunch all the DD channels into one transponder. We have also requested for more transponders on NSS-6 which will be available during the course of the year for us,” says Kumar. Dish TV currently offers 110 channels in addition to the 33 channels of DD Direct Plus which are also available to its consumers.

    So ahead of the skirmish, Chandra has strengthened his armoury. Sure enough, the war for DTH subscribers is about to begin and escalate.

  • DTH wins over digital CAS – Starcom study

    Will I get fewer eyeballs for my advertising? Do I need to increase my budget to reach the same number of people through Television? Is my media plan going to become inefficient?These are just a few of the questions that a lot of Marketing Managers are asking their media agencies in the face of frequent announcements and subsequent postponements of the much awaited CAS rollout in Mumbai, Delhi and Kolkata.

    While there has been a lot of debate on how CAS will affect the Cable industry or the Advertiser, no one thought of talking to the consumer

    To understand the impact that CAS will have on the TV viewing habits of consumers, Starcom Worldwide commissioned a consumer research in these 3 metros, Chennai having already implemented CAS in 2003. This is the second wave of this research with the first one having been done in the 4 metros in 2003 when CAS was announced for the first time. This research was done among decision makers from SEC A,B & C households and has thrown up quite a few insights that can help marketers in understanding consumer perceptions and responses to CAS. Starcom also followed up with an analysis of ORG retail offtake data to understand what volumes of various categories are likely to get affected by CAS. We present here some of the key findings of the CAS research and a synopsis of the sales analysis.

    • A majority of the Consumers not willing to opt for CAS immediately
      In spite of the strength and popularity of Cable TV, only 30% consumers are willing to opt for CAS within 3 months of launch with Mumbai leading the pack at 53%.
      DTH more popular than CAS
      DTH awareness is 70% compared to only 51% for CAS
    • We attribute this to the advertising done by Dish TV over the last few months since launch and is likely to go up further with the entry of other players in this segment.
    • Most want to buy the Set Top Box outright rather than rent it
      Banks, who may have thought about financing Cable Operators for Set Top might have to shelve their plans since a vast majority (70%) of consumers prefer to buy the STB outright.
    • Compared to 2003 consumers willing to pay a higher amount for the STB
      Good news for cable operators is that the amount people are willing to spend for the STB is 30% higher than the amount they were willing to pay in 2003.
      Consumers willing to pay to watch channels of their choice and the perception is that Cable cost will come down post the implementation of CAS
    • 60% of consumers believe that they will be able to watch only channels of their choice and are willing to pay for those rather than being charged for 100 channels out of which they watch only 20. They also believe that CAS will actually bring down their monthly subscription from an average of Rs 202 to RS 162 with the drop being highest in Mumbai while Kolkata is not impacted at all.

    Most people want to take a wait and watch approach and they will wait till there is enough indication that CAS is here to stay and they see enough of their peers converting in the first few weeks. Once the initial seeding takes place CAS penetration might start growing exponentially.

    Finally what is the implication of the CAS rollout on sales. The following chart demonstrates the methodology followed to arrive at the percentage of sales that are likely to get impacted.

    The affected volumes likely to be: Soaps targeted at the lower SECs : 1.1%
    Metro focused Ketchup : 6% Private Insurance Companies : 10%

    While most FMCG marketers can breathe easy, the ones who sell premium products/brands and are dependant on South Mumbai, South Delhi and the Municipal areas of Kolkata should have contingency plans in place But even for most of such marketers, the impact will not be more than 10% to 15%.

     

  • The more or less challenge – the role of outsourcing

    The more or less challenge – the role of outsourcing

     SINGAPORE: With the broadcast industry rapidly going digital, broadcasters need to provide new services on their existing cost bases to achieve operational efficiencies to drive in business changes.

    So, besides other seminars on going digital, the third day’s afternoon session at Broadcast Asia focused on how broadcasters need to focus on their core competencies by outsourcing in other areas.

    Some of the important issues that were raised included – why outsourcing is relevant to the broadcast industry and what benefits it can bring. And most importantly what are some of the ways in which outsourcing can be delivered.

    Throwing light on the rapidly accelerating changes in the broadcast industry, Siemens Business Services Media head Saleha Williams said, “Broadcasters have to grow out of their traditional operating models which are no longer working, because of rapid technological changes and business models. Outsourcing can also save us from various revenue pressures which have come in with lots of competition with more platforms, audience fragmentation and increasing churn and new advertising models.”
    The seminar brought out five core elements to the technology change

    o Broadband

    o Mobile

    o PVR

    o HDTV

    o Increasing competition from gaming and other forms of non broadcast entertainment

    Some of the regulatory-led change are:

    o Digital broadcasting (analogue switch off)

    o Deregulation

    Willaims gave out some pointers on how outsourcing can help broadcasters

    o Outsourcing in broadcast markets as much about innovation as cost savings.

    o Solving new problems, such as distribution to emerging platforms.

    o Outsourcers act as a catalyst, enabling broadcasters to transform ways of working. At heart of every outsourcing relationship.

    o Economies of scale, improved operational effectiveness and off shoring.

    o Typically savings of 20-30%, but depends totally on the nature of the service.

    Williams also listed out some of the benefits achieved by outsourcing other parts of the world.

    o Outsourcing in broadcast markets as much about innovation as cost savings.

    o Solving new problems, such as distribution to emerging platforms.

    o Outsourcers act as a catalyst, enabling broadcasters to transform ways of working.

    · Significant technology investment needed to compete in changing broadcast market.

    o Outsourcers can help broadcasters smooth their investment profile.

    o Pay an annual charge i.e. from capex to opex.

    o Outsourcers and their partners provide greater specialisation.

    o Apply learning from working with other broadcast organisations.

    o Sometimes easier to measure and incentivise services provided externally.

    o At heart of every outsourcing relationship .Economies of scale, improved operational effectiveness and off shoring.

    o Typically savings of 20-30%, but depends totally on the nature of the service.

    o Allows broadcaster to concentrate more effectively on its business strategy.

    o Reduces the level of management attention required for non core activities.

    o Hands problem over to a third party.

    · Driven by cost savings and risk transfer / reduction.

    · Embeds outsource provider in broadcaster’s organisation.

    o Provides transformational change.

    o Driven by risk sharing / reduction and cost savings.

    o Flexibility

    Three Principal Issues

    o Not understood initial cost base or level of savings achievable in house

    o Not factored all costs into deal e.g. transition, management and termination

    o Maintain outsourced services in house (pay twice over)

    o Efficiencies change over time i.e. cost efficient process in 2006 may be an expensive one by 2010

    Reasons and Observations

    o Both actual falls and perception that service levels have fallen are important

    o Broadcaster culture – problems need solving at once even if not “on air”

    o Require realistic service levels to be agreed and communicated to all users

    o Broadcaster and outsourcer need to understand each other’s business drivers

    o Need to protect competitive strengths and strategic identity. For instance, a company outsourcing technology may decide to keep enough of its technology strategists in house to be in control of its technology vision.