ITV

Tag: ARPU

  • Q1-2015: Airtel Digital TV y-o-y revenue grows 21 per cent, subscriber base up 11 per cent

    Q1-2015: Airtel Digital TV y-o-y revenue grows 21 per cent, subscriber base up 11 per cent

    BENGALURU: India headquartered communications giant Bharti Airtel Limited (Airtel)’s digital TV (DTH)segment reported a y-o-y growth in revenue of 21 per cent to Rs 591.5 crore as compared to the year ago revenue of Rs 490 crore. The DTH segment’s contribution to Airtel’s Indian and South Asian (India & SA) revenue of Rs 16201.9 crore in Q1-2015 was 4 per cent. Airtel’s India & SA revenue forms 71 per cent of the company’s global revenue of Rs 22961.6 crore in the quarter.

     

    Note: (1) Rs 100 lakh = Rs100,00,000 = Rs 1 crore = Rs 10 million.

     

    Airtel’s DTH segment reported  11 per cent jump in its net subscriber base to 93.88 lakh in Q1-2015 from 84.52 lakh in Q1-2014 and a 4.2 per cent rise from the 90.12 lakh in Q4-2014. Q-o-q the subscriber base grew by 3.76 lakh says the company.

     

    Airtel’s DTH segment reported average revenue (Arpu) of Rs 214, which was 5 per cent more than the Rs 203 in Q4-2014 and 9 per cent more than the Rs 195 in the corresponding quarter of last fiscal.

     

    Airtel’s DTH segment reported a monthly subscriber churn of 0.6 per cent in Q1-2015 and Q1-2014, as compared to 0.9 per cent in Q4-2014.

     

    The DTH segment’s EBITDA for the quarter increased to Rs 143.7 crore as compared to Rs 76 crore in the corresponding quarter last year. EBIDTA margin improved significantly in Q1-2015 to 24.3 per cent as compared to a margin of 15.5 per cent in the corresponding quarter last year.  During the current quarter, the DTH segment incurred a capital expenditure of Rs 262.7 crore for higher procurement of boxes  for higher gross adds.  The DTH Segment’s cash burn during the quarter at Rs 119 crore has dropped, compared to Rs 147.9 crore in the corresponding quarter last year reports the company.

     

    Bharti Airtel’s consolidated highlights for the first quarter ended 30 June 2014

     

    Overall customer base stands at 29.99 million across 20 countries, up 9.1 per cent y-o-y.

     

    Consolidated total revenues at Rs 22,962 crore, up by 13.3 per cent y-o-y.

     

    India & South Asia (India SA) up 11.8 per cent; Africa up 17.5 per cent (INR terms) y-o-y.

     

    Consolidated Mobile Data revenue at Rs 2,204 crore, up by 73.9 per cent y-o-y; growth across geographies.

     

    Consolidated EBITDA at Rs 7,720 crore, up by 18.0 per cent y-o-y, EBITDA margin up 1.3 per cent y-o-y.

     

    India & SA EBITDA margin at 37.2 per cent, up by 3 per cent y-o-y.

     

    Net Income at Rs 1,108 crore, up by 60.9 per cent y-o-y.

  • Dish TV adds 3.32 lakh net subscribers in Q1-2015; maintains FY-2014 ARPU of Rs 170

    Dish TV adds 3.32 lakh net subscribers in Q1-2015; maintains FY-2014 ARPU of Rs 170

    Updated: 05:45 PM

     

    BENGALURU:  In its earnings release today, India’s largest DTH operator, Dish TV Limited (Dish TV) informed the bourses that its net subscriber base in Q1-2015 has gone up to 1.17 crore, the company says that it has added a net of 3.32 lakh subscribers in this quarter. The company says further that its average revenue per user (ARPU) is Rs 170, same as the ARPU reported for FY-2014.

     

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

     

    Dish TV’s total income from operations (TIO) has gone up marginally by 0.6 per cent in Q1-2015 to Rs 640.69 crore from Rs 636.91 crore in Q1-2014 but was 1 per cent lower than Rs 647.38 crore in Q1-2014. The company has reported a lower loss of Rs 16.5 crore in Q1-2015 as compared to a loss of Rs 149.05 crore in Q4-2014 and a profit of Rs 31.73 crore in Q1-2014. It may be noted that Dish TV’s Q4-2014 loss was impacted by a prior period adjustment of Rs 116.4 crore.

     

    The company reported subscription revenue for the quarter were Rs 588.6 crore while total standalone operating revenues stood at Rs 640.7 crore.

     

    Let us look at the other Q1-2015 numbers reported by Dish TV

     

    Dish TV’s Total expenditure (TE) in Q1-2015 at Rs 628.88 crore (98.2 per cent of TIO) was 4.3 per cent lower than the Rs 657.05 crore (103.2 per cent of TIO) in Q4-2014 and 3.4 per cent more than the Rs 607.94 crore (93.9 per cent of TIO) in Q1-2014.

     

    The company’s programming content and other costs (programming cost) in Q1-2015 at Rs 66.44 crore (10.4 per cent of TIO) was 0.8 per cent lower than the Rs 66.98 crore (10.5 per cent of TIO) in Q4-2014 and 0.9 per cent less than the Rs 67.04 crore (10.4 per cent of TIO) in Q1-2014.

     

    Dish TV paid 16 per cent lower licence fees at Rs 69.24 crore (10.8 per cent of TIO) in Q1-2015 as compared to the Rs 82.38 crore (12.9 per cent of TIO) in the immediate trailing quarter and 10 per cent more than the Rs 62.92 crore (9.7 per cent of TIO) in the year ago quarter Q1-2014.

     

    The company’s commission expense at Rs 54.12 crore (8.5 per cent of TIO) was 6.9 per cent higher than the Rs 50.65 crore (8 per cent of TIO) in Q4-2014 and 36.4 per cent more than the Rs 39.69 crore (6.1 per cent of TIO) in Q1-2014.

     

    Dish TV’s other selling and distribution expense for Q1-2015 at Rs 37.86 crore (5.9 per cent of TIO) was 15.9 per cent more than the Rs 32.66 crore (5.1 per cent of TIO) in Q4-2014 and 24.8 per cent lower than the Rs 50.32 crore (7.8 per cent of TIO) in Q1-2014.

     

    Dish TV’s finance cost in Q1-2015 at Rs 39.48 crore (6.2 per cent of TIO) was 8.4 per cent more than the Rs 32.3 crore (5.1 per cent of TIO) in Q4-2014 and 5 per cent lower than the Rs 35.44 crore (5.5 per cent of TIO) in Q1-2014.

     

    Dish TV chairman Subhash Chandra said, “Going by the first quarter run-rate, the Indian DTH industry seems to have set ground for a 25 per cent growth in subscriber additions this year. Factoring in the opportunities ahead Dish TV is optimistic about outgrowing the industry growth rate. The company delivered in line with expectations during the first quarter and reclaimed its position as the fastest growing DTH player in the country”.

     

    Dish TV managing director Jawahar Goel said, “Post a mediocre 2014, fiscal 2015 had a promising start for the DTH industry. Dish TV, supported by a debt light balance sheet and a more willing consumer market, put the pedal to the metal and led the industry growth by garnering the highest incremental share during the quarter.”

     

    “In line with our objective of growth with profitability, we took a price hike of 5-7 per cent across the middle and top level packs with effect from the first week of June. ARPU increased to Rs. 170 per month in the first quarter with churn also increasing marginally to reach 0.7 per cent per month. There have been efforts to implement last mile billing by the MSO’s however, a full-fledged roll-out is key to a step jump in ARPU’s across the category,” added Goel. In Q4-2014, the company had reported a churn of 0.6 per cent.

     

     “We continued to expand ‘Zing’, our innovative offering for vernacular content across regional markets. The ‘Zing’ service is now available across Odisha, West Bengal, Tripura, parts of Assam and most parts of Maharashtra. A powerful sub-brand, ‘Zing’ has also propelled the sales of the main brand through a wider reach and top of the mind recall. Moving closer towards Phase III and IV of digitisation we remain optimistic about our strategy to capture leading share in these markets,” further added Goel.

     

    Click here to read the financial result

    Click here to read the Earnings release

  • Digitisation has failed to show increase in ARPUs: Deloitte

    Digitisation has failed to show increase in ARPUs: Deloitte

    NEW DELHI: Although carriage fees saw a reduction of 15-20 per cent after the first two phases of digitisation, the delay in implementation of the various phases of digitisation means the promised jump in subscription revenues and average revenue per user (ARPU) has not materialized.

     

    The recently launched Digitization and Mobility: Next frontier of growth for M&E, report by Deloitte states, “One year into the implementation of digitisation, the cable and broadcast sector is still trying to iron out creases and get systems in place. The key goal of digitisation was addressability, which was expected to plug leakages in the system. While cable subscribers have been increasing, rampant under-declaration meant, Multi-System Operators (MSOs) that transmitted the signals to cable operators earned little from the large subscriber base.”

     

    In 2014, Deloitte predicts that the digital TV distribution space – both digital cable and Direct-to-Home (DTH) would find ample room for growth given the catalysing effect of digitisation and the headroom for growth provided by non-TV households in the country.

     

    The report prepared for the ASSOCHAM annual M&E meet says about 12 million set-top boxes have been seeded and 80 per cent consumer application forms have been received as of December 2013. The Telecom Regulatory Authority of India (TRAI) claims 100 per cent digitisation in DAS phase II.

     

    TRAI has also said recommendations on the new DTH licences would be brought out very soon.

     

    HITS licenses which have been issued to two players, is expected to enable digitisation in phase III and phase IV markets.

     

    Meanwhile, the report notes, “Complaints have poured in against set-top boxes. People in the city are complaining about digital set-top boxes installed in their houses and offices. Visual and sound disturbances coupled with channels going off air from time to time have left viewers unhappy.”

     

    It also notes that “in the haste to install set-top boxes in the city, cable operators have overlooked a crucial step – that of filling in the Cable Access Form (CAF) before installation of the device. The purpose behind mandating DAS was to identify the actual number of cable viewers in the country. But with most customers not filling in the form, the purpose still remains defeated.”

     

    “With penetration of TV in India standing at approximately 65 per cent, at present, the country has close to 80 million non-TV households, which presents a key opportunity for the television distribution players. This low level of penetration holds a great potential for players to increase their subscribers and revenues. Drivers such as rising incomes, decreasing household size, multi TV phenomenon and rising urbanisation would only provide a further fillip.”

     

    Noting that the government’s digitisation mandate is “slowly but steadily progressing towards its target,” the report says the television distribution space is abuzz with prospects, albeit it would call for investments and improvements, especially from the digital cable players. All metros except Chennai have been largely digitised and the phase II of digitisation, which covers 38 cities, is also nearing completion. Phase III and IV of digitisation targets December 2014 for their completion. This would mean digitisation of additional 40 to 50 million households in the balance towns.”

     

    The report also says that phase III aims to focus on digitisation of all urban areas (municipal areas). Given the extensive coverage of MSOs and LCOs in such areas, digital cable is expected to make the most in the relatively densely populated areas, notwithstanding the churn of subscribers to DTH. In the first phase of digitisation, DTH operators were able to grab 20 per cent of subscribers converting them from analog to digital.

     

    Phase IV aims to focus on digitisation for the rest of India, which predominantly aims at rural areas and tier II cities. DTH is expected to gain the most in areas with sparse population and inadequate cable infrastructure.

     

    Digitisation phases, scope and affected subscribers

    Digitisation phase               Scope                                        Subscribers affected (million)

    Phase I                            Delhi, Mumbai, Kolkata, Chennai        8-10

    Phase II                           All cities with population > 1 million   12-14

    Phase III                          All urban areas (Municipal areas)        30-35

    Phase IV                         Rest of India                                               22-25

    Source: Industry discussions

     

    DTH, as a sector, had started off by concentrating on rural areas, which were deprived of cable infrastructure and gradually also entered the urban markets. However, they are still strong in rural markets.

     

    Given the complexity of the exercise across the country and the rate at which television penetration is growing (MPA expects India to have 183 million pay-TV homes by 2020); the scale of undertaking of digitisation will be a big challenge.  

     

    But it says analysts and sector professionals agree the future looks promising with the lessons learnt from phases I and II.

  • Airtel DTH services y-o-y growth 23%, EBIDTA up 226%, ARPU up 10% in Q4-2014

    Airtel DTH services y-o-y growth 23%, EBIDTA up 226%, ARPU up 10% in Q4-2014

    BENGALURU: Indian and international mobile services giant Bharati Airtel Limited’s DTH (Airtel DTH) services business total revenue has grown 23 per cent to Rs 541.5 crore in Q4-2014 as compared to the Rs 441.9 crore in the year ago quarter (Q4-2013).  During FY-2014, total revenue at Rs 2077.1 crore was 27 per cent more than the Rs 1629.4 crore in FY-2013.

     

    Airtel DTH has reported higher EBIDTA at Rs 96.3 crore in Q4-2014, 226 per cent more than the Rs 29.6 crore in Q4-2013. During the current financial year, EBIDTA was even higher (by 638 per cent) at Rs 333.8 crore as compared to the Rs 45.2 crore in FY-2013.

     

    Airtel DTH’s operating margin (EBIT) loss reduced by 38 per cent to Rs (-111.1) crore in Q4-2014 from Rs (-178.4) crore in Q4-2013. Over the year EBIT reduced by 41 per cent to Rs (-482.1) crore in FY-2014 from Rs (-810.5) crore in FY-2013.

     

    Capex at Rs 177.9 crore went up 34 per cent in Q4-2014 from Rs 132.6 crore y-o-y. However the company’s capex in FY-2014 was (-18) per cent lower at Rs 617 crore as compared to the Rs 754.8 crore in FY-2013.

     

    The company’s DTH business’s cumulative investments in Q4-2014 and FY-2014 went up 15 per cent to Rs 4646.8 crore from Rs 4036.6 crore in Q4-2013 and FY-2013.

     

    Airtel DTH q-o-q customer base went up 2 per cent in Q4-2014 to 90.12 lakhs from 88.07 lakhs, with net additions of 2.05 lakhs new subscribers during Q4-2014. This is (-13) per cent lower than the 235000 net additions the company had declared during Q4-2013. Y-o-y the customer base was 11 per cent more than the 81 lakhs subscribers in Q4-2014, but net new subscriptions during Q4-2014 was less by (-1) per cent than the 207000 net new subscriptions in Q4-2013.

     

    Average Revenue Per User (ARPU) in Q4-2014 has gone down (-2) per cent to Rs 203 in Q4-2014 as compared to the Rs 207 in the immediate trailing quarter, but was 10 per cent more than the Rs 184 in the year ago quarter (Q4-2013).

     

    Airtel DTH’s monthly churn was also higher at 0.9 per cent in Q4-2014 as compared to the 0.8 per cent in Q3-2014, but was lower than the 1.1 per cent in Q4-2013.

     

    It became the first DTH player in the country to showcase a feature film on the same day of its theatrical release with the showcase of Telugu movie ‘Minukumanna Minugurulu’ on its Pay Per View (PPV) platform.

     

    In line with company’s initiatives to associate with events, shows and initiatives that resonate well with the preferences of today’s India, Bharati Airtel co-sponsored the popular TV show ‘Satyamev Jayate’ again this year. The brand integration with the show included innovations like in-show calls on Airtel 3G and use of Airtel money for donations along with access to exclusive show content to customers.

     

    In an effort to provide a world-class experience to the customers, the company launched Airtel ‘Pocket TV’ – a mobile app which will enable customers to watch their favourite TV programs on the move while also being the first player to release a feature film on digital TV platform.

  • We want to be amongst the top three Indian pay TV operators: Anil Khera

    We want to be amongst the top three Indian pay TV operators: Anil Khera

    When the Dhoots of the Videocon group decided to foray into the direct to home (DTH) television business, the odds were stacked against them. Five other players had already established themselves, and the segment was already boiling over with competition. But that did not deter the Dhoot family which was keenly looking at investing in high growth emerging businesses.

     

    They charged an old hand who had spent nearly three decades with the consumer durables and electronics group in various managerial positions in sales and marketing – Anil Khera – to get the venture going under Bharat Business Channel. Launched in 2009, with Khera as CEO, Videocon d2h, is another success story for the Dhoots. 

     

    And Khera has contributed in no small measure to that success. A very desi brand builder and marketer, he is known to have his ear very close to the ground, and his eye on the consumer. Today Videocon d2h has more than 10 million subscribers and claims to be the fastest growing company in terms of net DTH additions. And Khera is looking at further accelerating that growth. 

     

    He took out some time to speak to indiantelevision.com’s Vishaka Chakrapani about the company’s stellar performance, the way ahead and the DTH industry on an overall basis.

     

    Excerpts:

     

    How has 2013 been for Videocon d2h? What are your expectations in 2014?

     

    2013 has been a tremendous year for us. We consolidated our market leadership further and maintained a 26-27 per cent market share in incremental growth. We crossed 10M subscriber base and introduced several innovative products like 1TB DVR recording facility in zapper boxes through USB etc. 

     

    We expect 2014 to be a similar year. We would also look at introducing new products and services to our customers like Anywhere TV etc.  

     

    What is good about the India DTH industry? How can it be made better?

     

    The size of Indian Pay TV market in terms of number of subscribers is unparalleled across the world. Also, it’s a completely open market structure that promotes competition by accommodating several DTH and Cable companies at the same time. However, its overly regulated and high rate of taxation is the single biggest issue. 

     

     

    What differentiates Videocon d2h from other players?

     

    The hallmark of Videocon d2h is its simplicity and execution focus in approach. Some of these can be described as:

     

    ·We constantly thrive on simplifying our offerings to customers. 

    ·Our consumer durable DNA means we have decades of insights and knowledge on customer behavior.

    ·Our entire organisation is very execution orientated constantly speaking to trade and customers.

     

    What are the value added services (VAS) that the subscribers get from d2h? How do you finalise the services for your customers?

     

    We offer the following value added services:

     

    ·Pay Per View channel bringing the best and latest movies to our customers

    ·In house VOD channels

    ·Audio music channels bringing music across 20 genres ranging from religious to romantic

    ·Audio Video channel

    ·Premium subscription channels like Star World Premiere

    ·Special customised tickers like stock market updates 24X7 across any channel 

     

    Our services are finalised on the customer’s demands, maturity of offering and our hypothesis on future potential of the service.

     

    Do you have plans to target the mobile space any time soon?

     

    We would be launching Anytime TV sometime soon in 2014.

     

    How many net customer additions did you have in 2013? Have you seen a fall in the number of subscribers?

     

    We have added arguably the largest chunk of industry net additions in 2013. We have certainly seen dramatic fall in churn rates post phase 1 and phase 2 digitisation. We expect this to further drop post phase 3 and 4 of digitisation process.

     

    How has revenue growth been in 2013? Has the revenue growth been on account of subscriber additions or rise in average revenue per user (ARPU)?

     

    2013 has seen significant growth in terms of revenue. This has been on account of:

     

    ·Subscriber base has gone up significantly from where we were at the start of the year.

    ·Customer prices have seen a 5-6 per cent increase during the year.

    ·Increase in HD is improving our revenue mix and hence overall revenue.

    ·With reduction in churn and suspension rates due to digitisation, customer realisation has improved quite a lot.

     

    Have your ARPUs grown over the years?

     

    Over the past few years, ARPU has grown at a healthy double digit rate. We expect this to continue to grow and a low double digit rate for the next three years

     

    How do you work on increasing your ARPUs?

     

    We expect ARPU to grow by a low double digit this year on account of Better HD mix; marginal price increases; and introduction of VAS offerings like Anywhere TV.

     

    Claims are that the DTH business has stayed stagnant for some time now. Your opinion?

     

    While the overall industry is growing at only 10-12 per cent, this is not necessarily true for each player. Various players are growing at rates varying from negative to high double digit rate.

     

    What is status of your IPO? Why has it not happened even after getting SEBI approval in March last year?

     

    We have had fantastic feedback from potential investors across the world on our IPO. However, given the election year, there is uncertainty about any investments in the market at this point. We are waiting for the opportune moment and investor mindset to realise the true value of our IPO.

     

    Do you believe that content aggregators are trying to push several unwanted channels along with the popular ones on DTH platforms? What is your way of dealing with the aggregators?

     

    This does happen at this point for sure.  We generally avoid putting unwanted channels.  We focus on channels only which will add value to the customer and some channels which are entering in carriage arrangement with us.

     

    Should the DTH players bring content costs down, or upselling is better as both the content owner and platform increases its revenues and thus the ARPUs?

     

    This is the moot issue today as for the past 10 years DTH industry has alone bore the brunt of broadcasters cost. We have subsidised the cable industry for far too long. With digitisation complete in Phase I and II, major markets for carriage, it’s high time broadcasters and aggregators star treating digital cable and DTH at par. They can’t continue to expect DTH to fund everyone’s P&L forever. In entire value chain DTH is the only industry where all six players are still making losses.

     

    Having said that, there is no doubt we need to continue to focus on revenue growth and subscriber growth also. We need to strike the right balance between growth and cost efficiency.

     

    Are you planning to move from a fixed-fee deal with broadcasters to per subscriber arrangement?

     

    In our view once a certain critical mass is achieved, which today almost every player has achieved, it doesn’t matter whether deals are fixed or per subscriber. There are similar robust calculations and negotiation that go behind it. 

     

    How many subscribers from phases I and II switched over from cable to Videocon d2h? What is your expectation from phsases III and IV?

     

    Close to 25-30 per cent in various Phase I markets and 30-35 per cent in various Phase II markets have shifted to DTH. Our estimate is that 26-27 per cent of that has shifted to Videocon d2h. We expect Phase III and IV to be in favor of the DTH industry.

     

    What is the vision for the company?

     

    We want to be amongst the world’s leading top 10 Pay TV operators and surely amongst the top three in the Indian market. We want to be known for our simplicity, innovation and customer centricity.

  • A wrong to correct a wrong

    A wrong to correct a wrong

    MUMBAI: If you look back a few years it was the MSOs who were arm twisting the Broadcasters and carriage subsidies shot up to an estimate of about 1800-2000 crores so it was but obvious that the broadcasters had to resort to some countervailing power and adopted the age old saying of ‘in unity there is strength’ to fight back. Hence, the mergers and partnerships to create the Aggregator now termed the Aggressor!

     

    But the battle here is not between the MSO and the Broadcaster. Unfortunately, both have been caught in a situation and a created one at that. Both are responsible for this situation. The Broadcaster wanted distribution beyond available bandwidth, the MSO but naturally driven by common supply – demand market dynamics fleeced exorbitant carriage fees. To demand higher shares of which he started grabbing more territory. For doing so he gave significant concessions towards the subscription collections. Soon it reached a stage that they began to subsist on this easy money and forgot about the upward flow of subscriptions. So, the broadcasters were giving and getting back their own monies and plus or minus a little depending on the so called legacy of the channels rather than any rationale of popularity. That is where the business model started floundering. It’s not that the subscriber was getting a free view. Sure 20,000 + crore was getting collected and of course most of it in cash.

     

    So, where did all this money go? And why are both the Broadcasters and MSOs bleeding. One has to examine the value chain and leakages in the upward flow. The interface to the customer is the LCO/LMO the one who is making the collections. A reasonable share of this will need to flow upward to the broadcasters. Content too with all the competition is only getting more expensive especially with international formats and Bollywood hosts.

     

    How much should be a fair share is secondary. First, one needs to ensure that there actually is a streamlined reverse flow. The bottlenecks and leakages lie in the value chain and systems created by both the MSO and the broadcasters. In addition to the MSO in the middle between the LCO/LMO at one end and the Broadcaster at the other end, there are at least three more middlemen in the current system that prevails. The agent aggregator, their dealers and the distributor/JV partner of the MSOs. The money the consumer pays goes through five hands before what’s left will eventually reach the broadcaster. Obviously there are not one but two too many middlemen and this is where the ecosystem needs change.

     

    Now in all of this, how’s the consumer or subscriber faring? We are the cheapest cable market in the world and honestly without an iota of debate our consumers have been spoilt. For three to five dollars a month subscription, we get the most premium of content. (Given the way our rupee is depreciating we’ll soon be down to $2 subscriptions!) And for that an abundance of choice with half a dozen channels per genre. Live sports of pretty much every event around the world and movies within two months of theatrical release.

     

    Wow! Even if the Govt. is floundering in providing Roti, Kapda aur Makaan nobody is complaining about the 4th essential – Entertainment. Sure everyone’s complaining about the cost of electricity and fuel and multiple taxes but no one’s saying cut off my cable!

     

    Fortunately, we are also the 2nd largest cable and satellite market in the world and so can provide affordable entertainment and the best there is to offer. There’s enough to go around for legitimate stake holders we just need to get the business model right. Imbalances will correct themselves over time.

     

    As to the regulator and regulation, digital addressable system (DAS) is great, but for now let’s just focus on getting the boxes. Let it just be an exercise in technological evolution. Enjoy the digital experience and abundance of choice. We are a privileged lot. Trying to introduce addressability and ‘pay for what you want’ is only going to increase the consumer’s monthly outflow or severely restrict choice. When DAS gets to that stage of choosing and billing, it is not going to be a populist regulation.

     

    So Mr Khullar Sir, the aggregator has been disarmed (agent regulation), the MSO reigned in (max 50 per cent of state control) and the broadcaster chastised (12-minute ad cap). The LCO is still trying to figure out how by merely putting a box, the MSO claims the home whereas he’s the guy who has been upgrading the cables and amplifiers for over two decades. Let’s not add a confused customer to this. He’s happy leave him alone for now. Let the market dynamics come into play and let it all settle for a while. Average Revenue Per User (ARPUs) will increase but not at the cost of denying the consumer what he is already used to. Niche content, value added services and TV on the go are new revenue streams and customers will be willing to pay more for these. Affordable internet access is the key to this next phase of growth wherein traditional media and what we call new media need to converge. What will certainly be interesting is to see who will be the players here to emerge.

     

    (The author is a media observor and consultant, and the views expressed are his own.)

  • TRAI’s toothless content aggregator regulations

    TRAI’s toothless content aggregator regulations

    The Telecom Regulaotry Auhtority of India  (TRAI) was right in both identifying and bringing in new regulation in an attempt to curb content aggregator aggression (read: broadcaster aggression). However, the restrictions are very minimal and on the face of it, they don’t seem to have too much teeth. Aggregators can get renamed as Agents but will TRAI’s effort at redoing and notifying regulations for them really act as an agent of change?

     

    There is no restriction on the ownership of agent companies or how many broadcasters they can represent. (Will need to be addressed in issue of cross media.) Broadcasters belonging to the same group can bundle channels. For the immediate future it is more likely to lead to a futile exercise in splitting existing contracts and  and overtime and consulting fees for the guys in black suits (read: lawyers).

     

    Already agreed terms including carrying weak channels and desired packages are the tradeoffs by which the DPOs negotiate to their advantage, so contrary to TRAI’s belief that they add to unwanted costs, they actually subsidize the DPOs costs – whether for carriage, packaging or for a preferred LCN.

     

    Restricting multi-broadcaster packages is not important. What is important are the DPO’s packages which are what subscribers eventually subscribe to. As mentioned, these are negotiation tradeoffs.

     

    In any case most of the channel pricing and bouquets evolved arbitrarily at a time when there were already existing TRAI restrictions on a-la-carte, bouquets, price freeze on existing channels etc and very often broadcasters introduced highly priced new channels to offset the freeze on existing channels pricing. Even internal allocations between various broadcasters within an aggregator skewed rationale on pricing.

     

    The new regulations have not addressed many potent issues which have been plaguing the business and continue to beg solutions. For starters, let us understand that the entity signing the RIO is of little consequence to the consumer.  Where are the guidelines for DPOs to price to consumers? Should the retail pricing be determined by the DPO or Broadcaster and who should communicate this to the consumer?  Same goes for the packages. Is the DPO the real content aggregator buying in wholesale and then retailing to consumers or is he merely offering his delivery infrastructure and payment gateway for a commission?  What is the business model TRAI envisages? Is it going to continue as a B2B or should there be complete transparency to consumer in a B2C approach? 

     

    Third party channels within aggregator/agent will be most likely impacted. The Stars and Zees are big enough bouquets by themselves, same goes for the TV18/Viacom18 group channels. (Presuming 50 per cent ownership qualifies to label a broadcaster a Group Company!). Yes, Sony and Discovery channels on paper need to be split but their distribution venture has survived many long years and they can resolve any internal issues without upsetting present equations.

     

    The onus is now on the various DPOs – whether DTH or MSO – to leverage the only real advantage and actually negotiate separately for each of the various broadcasters’ bouquets. Some positive effect of this is likely but it would take a while for the dynamics of negotiations to change. For now it will more likely be just a paper tiger.

     

    All of this makes sense only if the end objective of DAS is achieved: which is individual consumer choice and billing. For now it seems to be stuck in a farcical CAF exercise. No one has really asked the consumer if he is happy paying his 150-200 bucks (ARPU) and wants to continue having his unlimited thali and buffet! And if one were to do the maths on this basis for current pay TV homes and allocate say 40 per cent to content- well, everyone’s happy!

     

    (The author is a media observor and consultant, and the views expressed are his own.)

  • Airtel DTH Q3-2014 yoy EBITDA up fivefolds; revenue up 26%; improved Arpu

    Airtel DTH Q3-2014 yoy EBITDA up fivefolds; revenue up 26%; improved Arpu

    BENGALURU: The DTH segment of India’s largest mobile services provider Airtel DTH reported earnings before interest taxes, depreciation, and amortisation (EBITDA) of Rs 97 crore for Q3-2014, 560 per cent more than the Rs 14.7 crore during Q3-2013 and 50.4 per cent more than the Rs 64.5 crore during the immediate trailing quarter.

     

    Airtel’s DTH segment reported a 25.8 per cent growth in revenue during Q3-2014 at Rs 538.4 crore as compared to the Rs 428 crore during Q3-2013 and 6.15 per cent more than the Rs 507.2 crore during Q2-2014.

     

    Overall, Arpu (Average revenue per user) improved by 11.29 per cent to Rs 207 during Q3-2014 as compared to the Rs 186 during Q3-2013 and was 4.55 per cent more than the Rs 198 during the immediate preceding quarter.

     

    The segment reported a 11.57 per cent y-o-y growth in total number of subscribers during Q3-2014 to 88.07 lakhs (100 lakhs = I crore = 1,00,00,000) with a net addition of 2.35 lakh new subscribers and a monthly churn of 0.8 per cent. During the corresponding period of last fiscal, the DTH segment had reported a subscriber base of 78.94 lakh with a net addition of 4.39 lakh and a monthly churn of 1.3 per cent. Corresponding figures for Q2-2014 were q-o-q growth of 2.74 per cent as compared to the 85.72 lakh customers in Q2-2013, with net addition of 1.2 lakh and a monthly churn of 1 per cent.

     

    Airtel DTH segment’s EBIT figures, though negative, also improved. The segment reported a Q3-2014 EBIT of Rs (-108.1) crore, which was 46.9 per cent better than the Q3-2013 EBIT of Rs (-182.8) crore and 26.7 per cent better than the Q2-2014 EBIT of Rs (-147.3) crore.

     

    Though the DTH segment contributed just 3.73 per cent to Bharti Airtel’s India revenues of Rs 14,443 crore during Q3-2014, the company invested 6.37 per cent of its capex spends of Rs 1742 crore in India.

     

    The company invested Rs 110.9 crore in capex for the DTH segment during Q3-2014, this figure was 17.91 per cent lower than the Rs 135.1 crore during Q3-2013, but 6.43 per cent more than the Rs 104.2 crore invested on capex in Q2-2014.

     

    Consequently, the company’s Operating free cash flow (EBITDA-Capex), though negative, improved more than eight fold (8.66 ties) to Rs (-13.9) crore in Q3-2014 as compared to the Rs (-120.4 crore) in Q3-2013 and by almost three times (2.85 times) the Rs (-39.7) crore during Q2-2014.

     

    Click here for full report

  • Shotformats launches digital prepaid wallet Biscoot

    Shotformats launches digital prepaid wallet Biscoot

    MUMBAI: Shotformats, a digital entertainment and VAS companies, has launched the world’s first offline application store and India’s first online digital currency – ‘Biscoot Digital Prepaid Wallet’.

     

    Combined together, the two offerings promise to change the way the digital entertainment industry markets its offerings across the rapidly growing smartphone users’ universe acrossth e country.

     

    On the initiatives, Shortformats MD and CEO Niyati Shah said, “As per our research, 95 per cent of mobile users in  India are prepaid users of which around 30-40 per cent visit mobile recharge shops at least twice a  day for getting recharges. Our distribution chain will comprise of such mobile recharge shops across India for testers. We aim to expand this network to 30,000 retail outlets in one year and sell one million such apps in the next six months. The current ARPUs of a mobile user voice + VAS would be approximately Rs 95 and we are bullish about taking that to Rs 150 in the first year of its launch on Biscoot Offline Store.”

     

    While low cost, big screen and feature-loaded smartphones are now a craze in tier II and tier III cities, the fact remains that majority of the users do not know how to operate such phones beyond basic calls and messages. The shocking surveys reveal that only 15 per cent of the total smartphone users have ever downloaded one or more apps on their mobiles. This situation is tailor-made for offline app stores where a consumer can fully utilise other features of his/her phone without the complexity of data usage and app downloads.

     

     

    For consumers who prefer consuming data online, the apps are available on the Biscoot website and will be offered with the ‘Biscoot Digital Wallet’.

     

    The offline app store will distribute digital content – movies, music, games and apps across more than 10,000 mobile recharge and telephone accessory stores in the next six months. This will prove to be a legal, good quality and reliable source of content for consumers in comparison to pirated and low quality content available from unreliable sources in the country currently.

     

    The company is focusing on creating utility applications across languages especially for Indian users. The range covers devotional, regional calculators, cookery, dress design apps for women and many more.

     

    Explaining the details further, Shah added, “Shotformats will bring high quality content based offline apps to the nearest shop of the consumer. You can load a movie for Rs 30 or a song for a price as low as Rs two. Games and apps can be purchased for Rs 10. The content applications can be transferred on the consumer’s mobile at the outlet and the consumer can use this content as long as he/she requires, without the internet/data connection on their mobiles. This application or the content cannot be copied to or shared with any other device, thus helping create a stream for content owners to monetize their content better, curb piracy and give the entertainment industry its due share of revenues. ‘The Biscoot Digital Wallet’ on the other hand, facilitates online transactions. The ‘Biscoot Digital Wallet’ will allow the consumers to create a digital wallet called ‘Biscoot Batua’ with their personal login account. These consumers can simply get Biscoot credits in exchange of rupees from retailers and use it for online transactions.”

     

    Disclosing the distribution plans, Shah said that Shotformats will focus on the Indian market and market Indian content for the next few years. “In India, we love our movies and we adore our music. The appetite for Indian content is so huge that we do not need to look elsewhere.”

     

    Offline application stores are being launched in a staggered manner and the initial phase will cover Mumbai, Pune, Aurangabad, Nagpur, Ahmedabad, Baroda, Rajkot, Jaipur, Jaisalmer, Surat, Chandigarh, Bhopal, Indore, Rewa, Jabalpur, Lucknow, Kanpur, Allahabad, Guwahati and Siliguri. The content will be available in eight languages – Hindi (Bollywood), Malayalam, Tamil, Telugu, Kannada, Bhojpuri, Marathi and Assamese.

     

    This digital wallet is the ultimate solution for those who shy away from using their credit/debit cards for online transactions. This currency will be available at retail mobile recharge and telephone accessory shops at the currency unit of Re 1. The Biscoot currency will be available as scratch cards at denominations of Rs 1000, Rs 500, Rs 100 and Rs 50.

  • Signum TV Cable selects Exset BV for DMS implementation

    Signum TV Cable selects Exset BV for DMS implementation

    Patna: The Netherland-based Exset B.V. and Patna-based Signum Digital Networks Private Limited (Signum) have entered into an agreement to introduce the award winning Digital Monetisation System (DMS) platform to deliver path breaking service and the next generation content protection system to the end users.

    As per the agreement, Exset B.V. will be responsible for providing DMS CAS and Middleware to Signum for its Digital Cable Platform. This association is set to help drive governance, television commerce, advertising and magazines services in a predominantly one–way environment to its entire end–consumers lighting up their TV space

    Mr. Alex Borland, Managing Director and CEO of Exset BV said, “We are proud to be associated with Signum TV as their content protection and monetization partner. Exset is committed to the success of this platform and will offer the highest level of security and service”.

    DMS bridges the gap between technology and Value-Added Services for digital TV deployments and allows digital television platforms to be created, which can then be monetised in a new dynamic way, which benefits the end users from new information and entertainment services. It enables the cable operators to meet the challenges of digitization, and also result in positive impact on their revenue stream.

    Mr. Gouri Sankar, chief Executive Officer (CEO) & Chief Technology Offiver (CTO) of Signum said, “We are delighted to have Exset as a partner to secure our content and roll-out our Middleware/VAS strategy. This association will help us to explore new VAS streams – Advertising, On-Demand, Interactive, and Information Services to name a few. We are certain that with the highest level of security and the middleware value proposition presented; will help us to drive ARPU’s to new levels”.

    Mr. Pradeep Acharya, Regional Director –South Asia of Exset said, “Exset’s value proposition is unparalleled in terms of offering the next generation of security and also paves the way for driving greater ARPU’s, unlocking new revenue stream, and consequently driving the platform to greater expanses and profitability”.