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  • With broadcaster backing, MSOs eye voluntary digitisation

    With broadcaster backing, MSOs eye voluntary digitisation

    MUMBAI: When the industry was moving in full force towards digitising phase III and phase IV cities, the Information and Broadcasting Ministry announced the postponement of digitisation till 2016. The news may have elated a few, but multi system operators (MSOs) and broadcasters have been critising the move. 

     

    “It is the MSOs who have to invest in digitisation,” says Siti Cable CEO VD Wadhwa and president of the newly formed All India Digital Cable Federation (AIDFC). In such a scenario, Wadhwa has suggested voluntary digitisation in these phases.

    The MSOs have a feeling that with delayed digitisation, the local cable operator (LCO) will not pay them the incremental money, since digitisation is not taking place.
     

    With delayed digitisation, broadcasters who were looking for a hike in their subscription revenue from the phase III and phase IV markets will also have to put a break to their dreams. 

    The MSO too is at loss. Currently, an MSO invests close to Rs 1500 per set top box and additional money on connectivity. “With this delay, the MSOs are not going to get any return on their investments for the next 15 months.  So whether I pay today or after 15 months, my interest cost will keep getting high, since I will be borrowing money and then investing,” informs Wadhwa.

    To tackle this situation, Wadhwa suggests that since the industry has to in any case move to digitisation in the next two years, they can start with voluntary digitisation.  “Broadcasters will have to back the MSOs to achieve this,” he says adding that Siti Cable is ready for voluntary digitisation, provided that broadcasters do not charge the MSO for the next 15 months.

    “Since the MSO is bringing in the money, the broadcasters should agree to not charge for next 15 months,” he says.

    Wadhwa also suggests that voluntary digitisation can be smooth provided the LCOs increase the cable bill in phase III and IV markets by Rs 50-Rs 60. “LCOs have till today been charging only Rs 150-Rs 180 from the consumer for some 60 channels. I would suggest that since with digitisation the number of channels will go up to 200-250, the LCOs should increase the bill by Rs 50-60 per subscriber.”

    Wadhwa is of the view that the LCOs can keep 50 per cent of the amount they increase in the cable bill. “With this, till digitisation is complete, while the ARPU for the MSO increases, the LCO can also get 50 per cent more on what he is currently getting,” he opines.

     

    In order to make this possible, Wadhwa will first try to bring consensus amongst MSOs and then will talk to all the broadcasters. “If the broadcasters support us, we will go ahead with voluntary digitisation.  We will also go to each state and talk to the LCOs,” he concludes. 

     

  • 250 channels sign up for BARC India’s watermarking technology

    250 channels sign up for BARC India’s watermarking technology

    MUMBAI: Even as signs of a delay from Broadcast Audience Measurement Council’s (BARC) side are doing the rounds, the audience measurement company has already got on board 250 channels that have ordered for watermarking embedders. Half of this has already been installed.

    The watermarking technology has been taken from Netherlands based Civolution and field testing of the meters is underway for homologating them to Indian conditions. As BARC India has consistently maintained, the meters have been assembled in India at a fraction of the cost of global suppliers.

    Deals with 26 vendor partners such as Intel, Hansa, Mediametrie, Civolution, Markdata, Magic9Media across 12 processes have been finalised. It also claims that this is the largest such audience measurement system globally with cutting edge technology.

    Very soon, it will start testing and validating the data from the system. The government has laid down policy guidelines that prescribe a minimum of 20, 000 homes, which BARC India feels isn’t enough in the long run. It has also opted for the harder and tougher method of assembling systems from various vendors to offer a superior and cost effective output.

    The measurement process undertaken by BARC India is as follows:

     

  • Digitisation extension 2015: MSOs, LMOs smile; broadcasters sigh

    Digitisation extension 2015: MSOs, LMOs smile; broadcasters sigh

    MUMBAI: It was a decision that most had been anticipating would be taken. But when it did come, it came as a bolt from the blue. Four months before cable TV digitisation had to be completed pan India, the government – through information and broadcasting (I&B) secretary Bimal Julka – announced to industry via indiantelevision.com that a decision had been taken to extend it to December 2015.

     

    (While this is what Julka has told us, certain sections in the industry have suggested that end-2015 is the analogue sunset date for phase III towns and villages; the date for phase IV regions may end up being December 2016.)

     

    Earlier this year, the previous UPA government’s Information and Broadcasting (I&B) Minister Manish Tewari had held a task force meet with all the stakeholders to state that digitisation was to go on as planned with phases III and IV being merged. The deadline was December 2014 to implement digitisation in digital addressable system (DAS) phase III and IV while simultaneously implementing billing in phase I and II, which was to have been done much earlier.

     

    However, the new advancement of the deadline by the current BJP government, comes across as a breather to the beleaguered and unprepared  cable TV industry that claims to be facing a shortage of funds to execute the seeding of 75 million boxes.

     

    The MSO and LCO fraternity is heaving a sigh of relief following the extension. Says Den Networks CEO SN Sharma: “After long, the government’s commitment is visible and there is clarity of date. For phase I and II we had built the tempo and campaign well in time and now with this announcement, things for phase III and IV will also fall in place. The government is also keen to push indigenous production of set top boxes which will bring out a 15 per cent reduction in prices. These next two phases constitute about 70 per cent of the cable TV base. We are now waiting for STB producers to tell us they can deliver the demand.”

     

    The new I&B Minister Prakash Javadekar has time and again reiterated the government’s intention to give a fillip to indigenously produced STBs.

     

    LCOs seem to be a happy lot. Says Maharashtra Cable Operators Foundation (MCOF) president Arvind Prabhoo, “This gives time for the last mile operator (LMO) to plan for a year and execute it as mandated by the Telecom Regulatory Authority of India. Our association will educate LMOs about the benefits of digitisation. We will be able to rope in more investors and manufacturers to come up with schemes for executing voluntary digitisation.”

     

    Digitisation in DAS I and II areas has also not yet been implemented in the way as had been envisaged. Billing and conditional access systems (CAS) have yet to take off in several DAS I and II towns.

     

    IMCL managing director and group CEO Tony D’silva feels that the extension does not make much of a difference if the government’s resolve is not strong enough. “Just by postponing or sticking to a date does not change the speed of digitisation. It has to be a much more detailed and flushed out action plan on how the MSO, LCO, broadcaster and the government will be brought together. It is great that they have clarified their position, now there needs to be an actionable plan by putting together a core committee,” he opines.

     

    However, the most unhappy of the lot are the broadcasters because it delays their dreams of getting higher subscription revenues from MSO, cable ops, and the subscriber by a year. Most feel that the one year delay will lead to everyone in the ecosystem slackening the pace, with delays hitting the process and spread of digitisation once again.

     

    Colors CEO Raj Nayak is of a similar opinion. Says he, “We were really looking forward to phase III and IV to be completed by December as after much delay and deliberation the sunset date was arrived at. Our business plans were geared accordingly. I am sure there must have been a good reason to postpone and a three month extension would have been understood, but postponement by one whole year is slightly disappointing.

     

    “Having said this we are glad that the digitisation process is on track and looking at it through a positive lens I am sure this would give the industry an opportunity to learn from the mistakes of phase I and II and hopefully put better systems and processes in place so that the respective stakeholders including the broadcasters get our fair share.”

     

    News broadcasters are most pained by the excessive carriage fees that are being demanded of them, even as revenues continue to sag. News Broadcasters Association president and NDTV executive vice chairperson KVL Narayan Rao is disappointed with the extension. “Complete digitisation will bring transparency to TV broadcast distribution while delays will only affect that goal,” he states.

     

    Various reports predict different dates of completion of digitisation in India. Amongst the most recent ones brought out by Singapore-based Media Partners Asia (Indiantelevision.com’s partner for the annual pay TV gathering India Digital Operators Summit)  has stated that by 2017 only 70 per cent of the pay TV market in India will be digitised. 

     

    We, at indiantelevision.com, believe there are several other measures that could be put in place by the government (read I&B ministry), the regulator, and the industry:

     

    *For starters, changing the mindset of the cable TV ecosystem that digitisation and true pay TV is useful to all those in it, and not harmful, needs to be communicated effectively.

     

    *Second, the government could set up a digitisation transition fund, which helps educate, train and provide seed capital to and rewards cable TV operators who walk that path.

     

    * Third, it puts in place policing and penalising measures to cane those who don’t.

     

    *Fourth, they need to ensure that valid and correct subscriber information is collected by every cable TV operator or MSO and recorded in their SMS and possibly made available to the authorities.

     

    * Fifth, once this is done, ensure that a legitimate bill is issued to every subscriber.

     

    * Sixth, the ministry, the TRAI and the government could announce future-proof (at least for a three to four year period) technical specifications and standards for set top boxes, so that garbage zapper boxes are not dumped on India and on an unknowing and unsuspecting home viewer.

     

    * Seventh, leave pricing to the market place, rather than mandating 10-15 per cent price increases. Sure broadcasters want to increase subscription revenues, but they would not be so foolish so as to price their channels so high that they drive away consumers, and in the process their collections. Some might choose to have stiff price tags, but their business plans, obviously, will have factored that in, to have a smaller niche subscriber base. Does the government mandate how much a pair of Armani jeans can be priced at?

     

    * Let cable TV operators be drawn in to deliver broadband – provide them technology, assistance, funding – so that they can be one of the constituents who will help fulfil the Modi government’s grand plan to digitise the country.

    While there are many other measures that could be drawn up and while some may not approve of what we have prescribed, we have decided to stick our necks out and made some suggestions. We would love to hear different perspectives from our readers. Please feel free to let us and others in the industry know by posting your comments below.

  • Stakeholders undivided on constitution of commercial subscriber

    Stakeholders undivided on constitution of commercial subscriber

    NEW DELHI: What constitutes commercial or non-commercial subscribers for broadcasting and cable TV services?

     

    This question remained largely unresolved in an open house discussion on tariff issues related to broadcasting and cable television services for commercial subscribers held later today.

     

    Broadcasters by and large were in agreement that anyone other than a domestic subscriber is a commercial subscriber.

     

    There was also division on who is responsible for the subscriber. While broadcasters feel they should know about the subscribers, the multi-service operators and cable operators said they are generally responsible for dealing with the subscriber and the broadcaster should not interfere.

     

    The Open House Discussion was called by the Telecom Regulatory Authority of India (TRAI) as it has to submit a proper tariff chart to the Supreme Court by 16 July.

     

    The meet was attended by senior officials of TRAI, the broadcasting fraternity including the Indian Broadcasting Foundation, and other stakeholders, apart from consumer organisations.

     

    The whole controversy rose after an order of the Telecom Disputes Settlement and Arbitration Tribunal of 28 May 2010 was challenged in the Supreme Court, which had on 16 April this year said: “…However, we direct that for a period of three months, the impugned tariff, which is in force as on today, shall continue. Within the said period, TRAI shall look into the matter de novo, as directed in the impugned judgment, and shall re–determine the tariff after hearing the contentions of all the stake holders….”

     

     TRAI had issued a consultation paper in this connection, and also invited comments from stakeholders by June-end. Though several stakeholders have already responded in writing, they were today given a final opportunity to send in their written comments by 8 July.

     

     On behalf of TRAI, the meet was attended by member R K Arnold, Dr Vijayalakshmy K Gupta, principal advisor N Parameswaran and secretary Sudhir Gupta. Others among the approximately 100 stakeholders who attended were IBF’s Sailesh Shah, Sony’s Naresh Chahal, Star’s Pulak Bagchi, a representative of Siticable and Cable Operators Federation of India’s Roop Sharma.

     

    Cable operator and journalist K K Sharma said most cable operators charged the same fee from commercial or non-commercial subscribers.

     

    A representative of the hotel industry said that it did not differentiate between a commercial or non-commercial subscriber. 

     

    Broadcasters representatives insisted that a lot of the investment went into production of content and so advertising was important, but some stakeholders said that encrypted channels should not be allowed to take commercials.

     

    Among the questions that the TRAI had asked in the consultation paper was whether stakeholders agreed with the definitions of ‘commercial establishment, ‘shop’ and ‘commercial subscriber’ given by TRAI; whether there was a need to further categorise commercial subscribers; tariff for commercial subscribers and whether it should be the same as for ordinary subscribers.

  • 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.)

  • Starsports.com and Twitter join hands

    Starsports.com and Twitter join hands

    MUMBAI: Starsports.com and Twitter have evolved their ongoing strategic partnership. Twitter users will now be able to directly view Starsports.com videos in-stream, without leaving Twitter. This is a first of its kind integration for a TV brand in India.

     

    This is yet another step forward for the broadcaster to create a stronger sports experience on digital. As part of the partnership, whenever a link to Starsports.com is tweeted, Twitter users on mobile will have the option to download the Starsports.com App. Earlier this year, @starsportsindia also became one of the first ‘handles’ that viewers could follow through Twitter’s SMS service and choose to receive tweets from the account as texts. Star Sports also regularly leads innovative broadcast integration of Twitter to fuel social TV experiences, as has been evidenced during this year’s Women’s Cricket World Cup, Super Fight League, BCCI International matches where fans have been encouraged to follow, tweet and more.

     

    Twitter India market director Rishi Jaitly said, “Twitter is the world’s leading, real-time information network where users consume content that is live, public, conversational and mobile. In India, Twitter has brought our users closer to the best of national and international sport. We applaud Starsports.com for embracing the Twitter platform in this way.”

     

    World over, sports is a key driver of social conversations. The strategic partnership with Twitter is a step in transforming the sports landscape on social media. Starsports.com was launched in June creating India’s first multi-sport destination on digital, with a live video experience that gives the fan complete control of his viewing experience, including a video timeline that allows him the ability to watch exciting moments of the game in an easy and intuitive fashion. Starsport’s launch campaign hashtag #GetOverTV trended worldwide during its launch, establishing Twitter as a key medium to engage with its core followers. The network’s handle @starsportsindia, which was started earlier this year, already has close to 1.5 lakh followers. It is amongst the most influential accounts in media in the country.

     

    Star India head of digital business Ajit Mohan said in a release, “Starsports.com is the leading multi-sports destination on digital in India. We are keen to continue to engage the most ardent sports fans in the country and our partnership with Twitter is a continuation of that commitment. Making these videos available for easy consumption will dramatically improve the nature of the social conversation around sports in India.”

     

    The in-stream video service will be first rolled out for videos that form a part of the Sachin Memory Project – a unique initiative by Starsports.com to commemorate the little master’s retirement. Over a 100 curated videos dating back to the 1980s will be made available as part of this initiative on a timeline that marks how his career has evolved, even as the world changed around him.

  • Discovery Q3 results buoyed by international revenues

    Discovery Q3 results buoyed by international revenues

    MUMBAI: Discovery Communications President/CEO David Zaslaw has been quite clear about what’s going to drive revenues at the company: international expansion. He has stated that more than once and he did so at the industry’s leading get together MipTV in Cannes in 2013. If one goes by the financials for the broadcaster for the third quarter ended 30 September 2013, he seems to be living up to that statement.

     

    Discovery Communications’ international betworks’ revenues climbed 59 per cent to $ 620 million, as advertising revenues were up 127 per cent to $282 million and distribution revenues were up 29 per cent to $322 million. Overall, international revenues almost equaled US domestic revenues which grew a snail like 10 per cent to touch $733 million. Ad revenues grew 12 per cent to account for $383 million of that, while distribution fees went up 10 per cent to touch $329 million.

     

    Overall, Discovery saw a 28 per cent increase in revenues to $ 1,375 million; adjusted OIBDA rose 20 per cent to $ 597 million and net income climbed up by 24 per cent to $ 255 million. And while these numbers were lower than the Q2 2013 of 1,4
    On the international front, distribution revenues, excluding newly acquired businesses, in local currency terms grew 14 per cent mainly from increased subscribers, most notably in Latin America, and from higher rates, particularly in Latin America and Asia Pacific, as well as from additional contributions due to the consolidation of Discovery Japan.

    Zaslav had this to say on the occasion of the results: “As we continue to build new avenues of growth across the more mature US business, the bigger opportunity remains the potential of our international portfolio, where we are diligently applying our targeted investment approach to exploit our unparalleled market position and capitalise on those areas with significant upside from the evolution of pay television and the developing global advertising landscape.”

     

    International advertising revenues, excluding newly acquired businesses, were up 29 per cent in local currency terms, primarily due to increased viewership in Western Europe and higher pricing in Western Europe and Latin America.

     

    “Discovery’s thoughtful investment over the last two decades in securing distribution and establishing relationships with key affiliates, suppliers and advertisers in each market has given us a huge head start internationally. But it’s the additional steps we have taken over the last several years to take advantage of our market position that is driving such strong results today and will allow us to continue to grow even as pay-TV penetration growth begins to slow eventually,” Zaslav added.

     

    Adjusted OIBDA increased 34 per cent to $232 million on a reported basis and was up 17 per cent excluding newly acquired businesses and foreign currency fluctuations, reflecting the 18 per cent revenue growth partially offset by a 19 per cent increase in operating expenses. The higher operating expenses were primarily due to increased content amortisation, personnel costs and marketing expense as well as costs related to consolidating Discovery Japan.

     

    As markets have developed, Discovery Communications has aggressively opened new offices in key countries, like Turkey, the Ukraine and India, to closely connect with an evolving middle class. At the same time, it has established in-house sales functions in markets where the revenue opportunity dictated a more hands-on approach, such as Russia, Colombia and Argentina.

     

    On the content side, the network has increased its programming spend internationally by over 80 per cent since 2010 to capitalise on market opportunities, including broadening the reach of its female flagship, TLC, into over 165 countries, making TLC the most distributed women’s brand in the world from a standing start 24 months ago.
    It has also been expanding the footprint of its successful investigative and forensic channel Invesitgation Discovery (ID) into 150 countries, and expecting to approach 180 countries in the year ahead; or launching the kids network recently across Asia. All in, over the last three years, the network has launched over 60 new feeds and five new languages to satisfy the growing demand for its content, and the strong revenue growth Discovery Communications is delivering currently is certainly due in a large part to the targeted investment.

     

    “While it is certainly difficult to predict how the various international markets will perform going forward, we remain optimistic about our long-term growth prospects, given the platform we have built; the investments we have made and the growth we are delivering today, despite a relatively slow economic climate in many of the countries we operate in. As we continue to invest in our organic growth initiatives, we’re also making significant strides integrating our recent SBS Nordic acquisition. The joint ad sales team we’ve assembled is closing deals in the spot market, while preparing upfront presentations to message during the first quarter that lay out the compelling content offering and value proposition we can deliver to ad clients,” expounded Zaslav.

    Zaslav had in July 2013 downgraded its revenue expectations for the full year from 5.58-5.70 billion to $5.55-5.63 billion, following Discovery said it expected 2013 revenue of $5.55 billion to $5.63 billion, below its previous forecast for $5.58 billion to $5.70 billion. The company blamed unfavorable currency fluctuations and costs from its $1.7 billion acquisition of Scandinavian media company SBS in December 2012, apart from the 20 per cent investment in European sports network Eurosport.

     

    But it is quite likely that it is these very investments which will start adding oodles of revenue and cash to its bottomline going forward. We can only wait to discover if that will happen.

  • Siti Cable reports significant improvement in EBIDTA in Q2-2014

    Siti Cable reports significant improvement in EBIDTA in Q2-2014

    BENGALURU:  The painstaking rollout of the digitisation of India’s cable TV ecosystem and the depreciation of the rupee are taking their toll – both positively and negatively –  on national MSOs.  Take the case of Essel Group company Siti Cable Network Limited (Siti Cable), the erstwhile Wire and Wireless (India) Ltd (WWIL). Its latest quarter (Q2-2014) shows that the company has shown an improvement in its EBIDTA to Rs 32.98 crore which is 74 per cent higher than the previous corresponding quarter last fiscal.  It’s bottomline is however stained red in  Q2-2014 with a negative PAT of Rs 21.87 crore, almost double (173 per cent) the negative PAT of Rs (-12.65 ) crore the company had reported during the corresponding quarter (Q2-2013) last year. However, the loss is lower than the Rs (-27.07) crore for the immediate preceding quarter (Q1-2014).  

     

    Let us look at some other numbers for Siti Cable in Q2-2014

     

    Operating revenue in Siti Cable’s case is primarily generated from subscriber related income especially from digitisation, income from bandwidth charges, ad income, STB activation charges and other operating revenues.

     

    The cable network reported total revenue of Rs 162.94 crore for Q2-2014, which was 56.7 per cent more than the Rs 103.98 crore for Q2-2013 and 12.9 per cent more than the Rs 144.29 crore in Q1-2014.

     

    Total expenses for Q2-2014 at Rs 129.96 crore were 57 per cent more than the Rs 85.06 crore for Q2-2013 and 15 per cent higher than the Rs 113.1 crore for Q1-2014.

     

    Siti Cable claims that it is the only MSO in India which shares 25 per cent carriage revenue with local cable operators. A big chunk of its expense is carriage sharing, pay channel and related costs in the latest quarter. The company spent Rs 65.46 crore in Q2-2014 towards this head, which was 21.7 per cent higher than the Rs 53.03 crore for Q2-2013 and six per cent more than the Rs 61.8 crore during the immediate preceding quarter Q1-2014.

     

     Siti Cable’s main operating expenses include cost of goods and services, employees’ cost, selling and distribution expenses and other expenditure. Its major cost item was cost of goods and services recorded as Rs 82.7 crore during the quarter (Q2-2014)  representing 51 per cent of the total revenue in comparison to Rs 62.15 crore in Q2-2013, representing 60 per cent of the total revenue.

     

    Siti Cable’s Selling and Distribution Expense for Q2-2014 at Rs 12.42 crore was more than quadruple (424 per cent) the Rs 2.93 crore for Q2-2013 and more than double (225 per cent) the Rs 5.51 crore for Q1-2014. Its administrative expense at Rs 25.44 crore for Q2-2014 was almost double (95 per cent more) than the Rs 13.03 crore for Q2-2013 and 22.7 per cent more than the Rs 20.74 crore in Q1-2014.

     

    Another major cost item was foreign exchange fluctuation due to Rupee devaluation during the Q2-2014, which has been recorded at Rs 7.69 crore, says the company; the corresponding figure for Q1-2014 was Rs 5.11 crore.

     

    Siti Cable chairman Subash Chandra said, “The industry is at an inflexion point where creating the valuable ecosystem for all stake holders be it consumer, broadcaster or last mile local cable operators will ensure sustainable growth. We see immense opportunity for digitization in India in the years ahead.”

     

    Siti Cable CEO V D Wadhwa said, “We are pleased to report a healthy performance in the second quarter of the year, our total revenue and EBITDA in the quarter grew to Rs 162.9 crore and Rs 33 crore, a growth of 57 per cent and 74 per cent respectively over last fiscal. Our growth was largely due to greater focus on subscription revenue despite low seeding of STB’s during the quarter. We shall continue to focus on business expansion and revenue maximization in coming quarter.”

  • Sun TV channels threatens to pull plug on Reliance Big TV

    Sun TV channels threatens to pull plug on Reliance Big TV

    MUMBAI: The sun is likely to set on Reliance Big TV. The south’s leading broadcaster has issued a public notice to the Anil Ambani-owned Big TV that it better pay up money owed to it or it will pull the plug on 18 channels in different languages that are carried on the DTH platform.

    According to Sun Network sources, Reliance Big TV has been given a deadline of three weeks as per TRAI rules to cough up back dues which some say have not been paid for six months.

    According to an industry source, Reliance Big TV had earlier received a notice from another aggregator for non-payment of subscription dues but had made the payment after it was issued.

    The 18 channels which will go off air from Reliance Big TV, if the dues are not cleared are: KTV, Sun Music, Sun News, Gemini TV, Gemini Comedy, Udaya TV, Udaya Comedy, Udaya Movies, Udaya News, Gemini News, Gemini Music, Gemini Movies, Adithya TV, Sun TV, Udaya Music, Chutti TV, Surya TV and Kiran TV.

    The notice comes at a time when there were newspaper reports that Reliance Big TV was close to concluding merger talks with Sun DTH. Obviously things have not moved forward positively and it’s quite likely the deal has been aborted. Reliance Big TV subscribers are hoping things get sorted out on the Sun TV channel carriage front.