ITV

Tag: Broadcasters

  • CBS, News Corp risk disenfranchising viewers by going pay: Aereo CEO

    CBS, News Corp risk disenfranchising viewers by going pay: Aereo CEO

    MUMBAI: During Ad Age‘s Digital Conference Aereo CEO Chet Kanojia addressed the threat by CBS and News Corp to stop their channels from being free to air.

    “The real question is a consumer question: Can you rightfully disenfranchise 50 million consumers? Is that what the preferred policy is?” he asked.

    “They‘re independent businesses. They can choose to do what they wish to. I‘m just sort of the engineer at the bottom of the food chain. I have no idea what these guys do or not” he added.

    Aereo pulls down over-the-air content by using an antenna. It then streams this content over the Internet to various devices. It plans to expand across the US.

    It recently won victories in court.

    He doesn‘t believe that Fox or any other broadcaster will follow on their threat to go to cable as their reach is great. “It‘s such a large audience, I don‘t see how those customers aren‘t going to get served”.

    But if the networks follow through Kanojia feels that other content service providers will replace them as public broadcasters. “That spectrum is incredibly valuable. Somebody‘s going to take advantage of that”.

  • CASBAA & IBF request FM Chidambaram to roll back tax hike on tech services

    CASBAA & IBF request FM Chidambaram to roll back tax hike on tech services

    MUMBAI: The Cable & Satellite Broadcasting Association of Asia (CASBAA) and The Indian Broadcasting Foundation (IBF) have requested the Indian government to roll back the increase in taxation on royalty and fees for technical services in the hands of a non-resident as proposed in The Financial Bill 2013.

    In a letter addressed to finance minister P. Chidambaram, the two associations have stated that Section 115A of The Income Tax Act, 1961, levies gross taxes of 10 per cent on royalty and technical services. The latest proposal by the finance ministry proposes to take this up to 25 per cent. Along with surcharge and an education cess, the effective rate comes to 27.037 per cent. When grossed up with other related levies, it will actually amount to 33 per cent, they say.

    Their letter to the finance minister points out that the proposed increased levy will have an impact on the Indian and international satellite and broadcasting sectors as the services they provide come under “royalty and fees for technical services.”

    India has constrained satellite capacity and it is highly dependent on foreign satellites. A recent study has shown that international satellites are providing roughly 60 per cent of the broadcasting capacity for India’s satellite DTH broadcasters.

    The associations have reiterated in the letter that international satellite operators will per force have to pass on the increased operational cost to their Indian broadcasting and other clients, as their margins are not fat enough to absorb the impact of higher taxation. DTH operators, broadcasters who deliver channels to India’s 90 million cable TV homes and cable TV operators will also in turn, then pass on the increased costs on to their subscribers. The cascading effect could be substantial, the two associations warn.

    “We believe that a good tax policy should aim at moderate rates, particularly in industries providing an engine for India’s growth. An increase to the levels proposed in the bill would be counter-productive; it would affect not only the operators providing satellite services, but a whole host of related sectors – including broadcasting, media, telecommunications and IT, which have been spearheading India’s growth story in recent years. Hence the increase should be rolled back,” the letter highlights.

    It concludes by saying that “any future increases that might be considered should be phased in, with a transition period of at least five years, to allow taxpayers time to plan ahead and to avoid any one-off uplift which could force the closure of some small operators.”

    Will the finance minister give a kind ear to Casbaa & IBF?

  • Broadcasters to send off net bills; AAAI reluctant to accept

    MUMBAI: The curtains are slated to go down on a very long-standing practice in the media industry tonight. Sources in the broadcasting fraternity reveal that net bills will be dispatched to media agencies for television commercials carried on channels. These will replace the gross bills which used to be the norm.

    This move comes following an Indian Broadcasting Foundation (IBF) decision on the matter. A month or so back, certain broadcasters received notices from the income tax department on gross bills not having a deduction of TDS on agency commissions. The IBF then decided to move over to the net billing system from the first billing cycle of April, something which the Advertising Agencies Association of India (AAAI) opposed. The IBF then told its members to defer the dispatch for another week to allow the IBF, the AAAI and the Indian Society of Advertisers (ISA) to hammer out a solution. Somehow, the three could not meet last week.

    And the IBF sent out another circular on Friday (19 April), advising its members to send out net bills on 22 April.

    “IBF‘s circulars are always in advisory form. After consultation with some more tax experts, the IBF has told us to dispatch the net bills tonight,” said the chief financial officer of a leading broadcast company.

    While broadcasters have already decided to go ahead with the issuance of net bills on 22 April, AAAI appeared to be oblivious to this development when Indiantelevision.com telephoned its president and Leo Burnett chairman & CEO Indian subcontinent Arvind Sharma. He pointed out that there has been no communication from the IBF that broadcaster members would be dispatching net bills tonight. “I hope it is not true. If they were to dispatch the net bills tonight, we will be constrained to send them back,” he said.

    “We at AAAI as well as our clients represented by ISA understand the challenges faced by the broadcasters and that is why we had proposed a joint association meeting on 23 April. The IBF, however informed us that it would not be possible to have it on that day. We still believe that if the three associations put their heads together along with some expert tax consultants, a win-win answer for all can be formed. We would urge IBF to come for such a joint meeting,” Sharma added.

    Obviously, the industry has not seen the last of the net vs gross billing issue.

  • IBF-AAAI: Net or gross billings? Quo Vadis?

    MUMBAI: Come the end of the next advertising billing cycle, an age old practice is likely to come to an end in the Indian broadcasting industry, if TV channels have their way.

    Media agencies will start receiving bills net of agency commissions, rather than gross bills (with the 15 per cent agency commission deducted from the gross amount) for TV commercials and ad spots carried by television channels.

    The Indian Broadcasting Foundation (IBF) has communicated this to the Advertising Agencies Association of India (AAAI). So what has forced the IBF to attempt to do away with a long standing practice of gross bills?

    What happened is that quite a few broadcasters received notices from the income tax department towards end-March 2013 claiming unpaid TDS on the 15 per cent agency commissions that is mentioned in the gross bill amounts that broadcasters normally send to agencies.

    “They have asked for retrospective TDS from some broadcasters over the past three years on the 15 per cent agency commission,” says IBF president and Multi Screen Media (MSM) CEO Man Jit Singh. “We have not calculated the exact amount of money this would entail, but it is substantial and could cripple the industry and hence we have been advised to move to net billing.”

    Immediate past president of AAAI and Draftfcb Group chairman India Nagesh Alai says that “this incident cannot be used to rationalise or force any move to net billing. It will adversely impact the advertising industry and hence is not acceptable to AAAI. It‘s a well-established principle under income tax laws that the payer of monies has to deduct TDS. The clients pay the agencies after deducting the TDS and thereafter the agencies pay the media the net amount due to them. Hence, there is no obligation on the media to deduct any TDS from agencies. This is well established by a circular issued by the tax authorities in 1995, when AAAI had sought a clarification. Hence, the notices raised on the broadcasters by the tax authorities on the specious argument that broadcasters have not deducted TDS from agencies, is untenable and not maintainable under law. It has to be argued on merits.”

    Singh says that broadcasters are broadly in agreement with the AAAI and that they are going to go in appeal against the notices. “We are going to argue our point. But who is going to pay the 50 per cent or so of the claim amount that we will have to deposit with the tax authorities until the appeal is heard and judgment in our favour delivered? Our cash flow position is going to be hit hard.”

    Alai says that broadcasters “should not be panicking as a result of such wrong claims. As business partners, AAAI and IBF will be working together on this, as always. KPMG and E&Y have been roped in to address the issue on merits.”

    He adds that “as an aside, it‘s a matter of fact that such tax notices and claims, based on irrational disallowances, invariably emanate in February or March, driven by revenue targets of the tax department.”

    Singh once again says that he concurs with the AAAI stance “but our tax advisors have said there is no guarantee that even if our appeal is upheld this time, we will not be issued notices from the income tax department again. We can‘t be going in appeal again and again. Hence we are quite firm on our decision to go ahead with the net billings system from the next billing cycle.”

  • US broadcasters could go to Congress in Aereo dispute

    US broadcasters could go to Congress in Aereo dispute

    MUMBAI: The fight between the US broadcasters like Fox and Barry Diller-backed Aereo is likely to get hotter. There is possibility of the broadcasters could appeal to the US Congress.

    Aereo CEO Chet Kanojia has been quoted in reports saying that in the past broadcasters have gone to Congress. Earlier a US court of appeals had dismissed a plea by broadcasters against Aereo.

    Aereo uses tiny antennas to pick up free over-the-air broadcast television signals and then transmits the video to its customers over the Internet. News Corp COO Chase Carey has threatened to make Fox pay on cable.

    Right now Aereo is only in New York but the plan is to expand to several more cities. Aereo‘s premium subscription plan costs $12 a month.

    The broadcasters want Aereo to pay to rebroadcast their signals, just like cable and satellite providers already do. Broadcast transmission fees are now a multi-billion dollar business. If Aereo can access content for free then cable companies that also retransmit signals might ask for the fee to be removed or reduced.

    Of course Aereo is another case of the disruptive influence of the Internet and the impact it is having on business models and revenue streams.

  • Aereo wins court fight against US channels

    Aereo wins court fight against US channels

    MUMBAI: In a setback to US television broadcasters, a Federal Appeals court has ruled that Aereo can continue to stream live TV through its site and app.

    The digital TV startup which is backed by Barry Diller will be able to continue operating and the dispute is expected to get a proper court hearing.

    Aereo streams TV channels without compensating them, but the broadcasters feel they will win eventually. But Aereo, which is only available in New York City, plans to offer its service in nearly 24 more cities this year.

    Channels like CBS, Disney and Fox complain that none of Aereo‘s $8 a month fee goes to the local TV stations. This is not the case when programming is carried over cable and satellite services, which have to pay the stations rebroadcast fees – fees the TV stations are increasingly depending on in a time when ad revenue is on the decline because of competition from Internet ad services.

    The broadcasters said in a statement: “This was a loss for the entire creative community. The court has ruled that it is okay to steal copyrighted material and re-transmit it without compensation. While we are disappointed with this decision, we have and are considering our options to protect our programming.”

    Aereo CEO Chet Kanojia said, “We may be a small start-up, but we have always believed in standing up and fighting for our consumers. We are grateful for the court’s thoughtful analysis and decision and we look forward to continuing to build a successful business that puts consumers first.”

  • Four cities go fully digital ahead of sunset date: MIB

    Four cities go fully digital ahead of sunset date: MIB

    MUMBAI: The Ministry of Information & Broadcasting (MIB) has said that 67 per cent digitisation target has been achieved in 38 cities with four cities – Hyderabad, Amritsar, Chandigarh and Allahabad – achieving nearly 100 per cent digitisation.

    Eight other cities – Jodhpur, Thane, Aurangabad, Jaipur, Pune, Faridabad, Nashik, and Ghaziabad – have achieved 75 per cent digitisation.

    Another 28 cities have achieved digitisation of more than 50 per cent individually, the MIB said. These cities are Ludhiana, Hyderabad, Amritsar, Chandigarh, Allahabad, Jodhpur, Thane, Aurangabad, Jaipur, Pune, Faridabad, Nashik, Ghaziabad, Meerut, Vadodara, Sholapur, Kanpur, Varanasi, Bangalore, Indore, Ranchi, Lucknow, Navi Mumbai, Nagpur, Ahmedabad, Surat, Bhopal and Howrah.

    As on 23 March, a total of 10.8 million set-top boxes (STBs) have already been installed in Phase-II cities against the target of 16 million, as per the data received from the DTH operators and the MSOs.

    The sunset date for the phase II of digitisation is 31 March after which analogue signals will be switched off in these 38 cities. During phase I, the three metro cities of Mumbai, Delhi and Kolkata have gone digital. In Chennai, digitisation could not be completed as the Madras High Court issued a stay order on a petition filed by local cable operators.

    The MIB said it has been consistently monitoring the progress made towards digitisation during Phase II of the process with I&B Minister Manish Tewari reviewing the progress on a daily basis.

    The Task Force set up by the MIB has also been meeting every week to take stock of the progress of digitisation in Phase-II. The Ministry has already conducted second round of meeting with nodal officers of 38 cities on 8 March to ascertain preparedness in these cities.

    As part of the public awareness campaign to sensitise the consumers on the benefits of digitisation, the Ministry has also stepped up the Public Awareness campaign through print and electronic media. All India Radio as well as private FM broadcasters have been broadcasting radio jingles on its National and regional networks for creating public awareness.

    The Ministry has already brought out a print advertisement in all 38 cities in the respective regional languages. SMS campaign is presently underway in these cities.

    As part of the awareness initiative, television channels have been frequently running video spots, black out advertisements, and scrolls to make the people aware regarding the benefits of the process and the deadline of the switch over from analogue to digital in the 38 cities set to be digitised under Phase II.

    The Control Room of the Ministry, which also has a toll free number, has been receiving a number of calls from consumers of Phase-II cities.

    In order to facilitate a seamless transition on the due date of 31 March 2013, the Ministry has asked major MSOs to depute their representatives in the Control Room to address and clarify various queries relating to acquisition of STBs, various schemes of purchase of STBs and package rates offered by MSOs.

  • Broadcasters want Trai to reinitiate dialogue on ad regulation

    NEW DELHI: Worried about the implications of the Telecom Regulatory Authority of India‘s (Trai) ad regulation policy on their business models, television industry‘s apex body Indian Broadcasting Foundation (IBF) has urged the government to engage in discussion with the stakeholders of the broadcast industry and roll back the regulation for the time being.

    The IBF suggested that like content the government should encourage self-regulation that is in line with global standards rather than pushing the regulation down the throats of broadcasters who are already reeling due to ad slowdown.

    “IBF calls for withdrawal of the notification and re-initiation of a participatory dialogue that helps make self-regulation of advertising minuteage in line with global standards a reality,” the IBF said in a statement.

    It added, “The IBF has been working with Trai over the last several months to arrive at a way forward on the quantum of advertising duration. Its fundamental stance has always been to self-regulate, aligned with globally practiced standards.”

    The IBF said that the industry is in agreement with the objective of the regulation that is better viewing experience for consumers without being frequently disrupted by advertisements, but the regulation must take into account the economic sustenance of the broadcast business.

    “The staging of doing this has to be in line with economic sustenance of the broadcasting business and is best aligned to the full value of digitisation becoming a reality.”

    The broadcast industry is still dependent on ad revenue as the primary source of income and the trickle down benefits of the much-hyped cable digitisation has not yet been realised even as carriage fees continue to be a burden.

    “The trickle back effect from the first stage of digitisation is yet to begin. Carriage fees introduced in 2008 remain a burden, especially for the more than 500 smaller channel operators. Cable TV tariffs remain frozen at 2005 rates. HD TV and pay channel revenues are just about beginning to happen and will take time to start providing economic value.

    Unless these issues are dealt with by the government it would be unfair on part of the government to bring ad regulation as the business model of broadcasters would go haywire.

    “These factors need concomitant addressing. Regulation on just advertising minuteage will have a severe impact on the survival of the broadcasting industry from amputation of a critical arm of the fourth estate,” the IBF averred.

    It opined that the broadcasting industry is yet to fully recover from the shocks of 2008 recession that had slowed down ad growth.

    “Like several industries that continue to reel from the after effects of the global economic recession, India‘s television broadcasting industry has been suffering too. The industry is largely dependent on advertising revenues for its economic sustenance,” the IBF contended.

    The Trai had on 22 March notified the Standards of Quality of Service (Duration of Advertisement in Television Channels) that caps the ad duration at 12 minutes per hour. The authority had even amended the main regulation that was issued on 14 May last year.

    The amended version of the regulation was watered down by doing away with clauses but that has still not helped in pacifying the broadcasters who have united to pressure the Trai to halt the implementation of the ad regulation.

  • India needs to build a second sport

    India needs to build a second sport

    MUMBAI: In a single sport country like India, it is important for all the stakeholders in sports industry to come together and build other sports besides cricket through a right model and create an ecosystem that works for everyone in the value chain – federations, broadcasters and fans.

    That, the experts believe, will reduce the dependency of sports broadcasters on cricket, which is becoming financially unviable due to steep rise in acquisition of properties
    Television is one of the most important components of popularising sports. It is broadcast rights fee that helps sporting bodies world over to fund the development of sports – whether it be creating infrastructure, developing talent or attracting talent.

    World Sport Group South Asia CEO Venu Nair believes the right model for any sports federation in India is to grow their sport by reaching out to as many people as possible. He also cautioned sports federations against blindly following the Indian Premier League (IPL) model.

    "Every other day you see an IPL-styled league with a new logo pasted on it. IPL became the success that it is because there was a thriving ecosystem in place before it launched. Other sports won‘t taste success by just emulating the IPL model," Nair said, while speaking at Ficci-Frames 2013.

    His suggestion to federations: Forge strategic partnerships with broadcasters where both rights owner and rights holder are equitable partners. He also suggested that the role of a public broadcaster should not be undermined in popularising a sport.

    "A sport like Football can become popular if it works with a public broadcaster. That will help a sport to be sampled by more people and then make it a habit for viewers to watch that sport," he averred.

    The credit for making cricket a huge success on television goes to Doordarshan, feels Nair.

    "There were lots of triggers that made Cricket popular. One of those was Doordarshan. People started following the sport because of Doordarshan. It played a large part in driving traction for cricket," said Nair during a panel discussion on ‘Sports: Economic viability and the crisis within‘.

    Cricket commentator Harsha Bhogle, who was moderating the session, pointed out how BSkyB built EPL into a powerhouse in UK.

    All India Football Federation (AIFF) General Secretary Kushal Das feels the quality of Indian football has to be on par with international football.

    "The problem with Indian football is not so much cricket as it is football itself. Today, football fans have access to the best of Football leagues whether it is EPL, La Liga or Bundesliga. When you compare Indian football with these top leagues, we don‘t match up," Das said.
     
    Indian football, he feels, suffers a double whammy of almost non-existent infrastructure and lack of talented players. Unless these issues are dealt with, Indian football will continue to suffer.

    Das said a partnership between a pubcaster and federation will only work if both the partners work in tandem towards the same goal. In the Indian context, he said the bad quality of production and commentary on DD can put off viewers who are exposed to international quality football.

    Another critical factor hampering the growth of non-cricket sports is the lack of clarity on scheduling. An annual calendar that lays down the schedule is important, not just from broadcasters point of view but also for a fan.

    Indian Football, in particular, suffers from scheduling problem that has been giving nightmares to AIFF‘s broadcast partner Ten Action+.

    Addressability & price cap de-regulation

    Sports broadcasters at the session batted for de-regulation of price cap on cricket which hasn‘t changed much since 2003 while the cost of cricket rights have gone North in the subsequent years. Cost is a structural issue which can only be addressed by ramping up subscription revenues.

    Star India Head of Sports Nitin Kureja said the government has to relax price regulation and let the market forces decide the price. "The revenue side has been a huge challenge. In fact, it has been a challenge to exploit all revenue streams. While the cost of cricket rights have gone up, the subscription revenue has not kept pace," Kukreja stated.

    "Regulation should have differential treatment for different sports," he added. Star India had bagged the BCCI media rights for Rs 38.51 billion till 2018.

    Neo Sports Broadcast COO Prasanna Krishnan opined that addressability was a bigger issue than price cap.

    "You can charge 1,000 rupees but if you don‘t know how many subscribers you have, it won‘t make much of a difference. So in my opinion, addressability is a bigger issue. Digitisation in that sense will be a game changer," Krishnan contended.

    He also felt that the mandatory sharing of feeds with the pubcaster has robbed the broadcasters of exclusivity. Pilferage of signals only worsens the situation for a sports broadcaster who has committed millions of dollars.

    "The public broadcaster in our country is too cricket-centric. That has to change if the intention is to air events of national importance. Why doesn‘t public broadcaster telecast I-League?," Krishnan questioned.

    He said the pubcaster is choosing events that are commercially viable.

    WSG‘s Nair, however, put the blame squarely on broadcasters for the broadcast rights going through the roof. "I am sure the broadcasters themselves know that they won‘t be able to recoup their investments when they bid for cricket rights. That is something that we should address. There are certain rights that have some value," he said.

    Concurring with Krishnan‘s view, IPL CEO Sundar Raman said sports broadcasting is driven by subscription income globally unlike India which is dependent on ad revenue that keeps fluctuating depending on seasons.

    "When you are dependent on ad revenue to recover your investments, you are at the mercy of media agencies. Across the globe, sports is driven by subscription. The amount of money that broadcasters get in India as subscription revenue is pittance," Raman explained.

    Raman said the addressability of audience is the single biggest challenge for the sports industry.

    Apart from addressability, the key to growing sports is to market it well, micro-targetting audience by going regional and exploiting other revenue streams, said Raman.

    On marketing front, Raman said the Hockey India League (HIL) did a good job which sports bodies can emulate. The marketing will help build a habit of strong viewing among viewers.

    Commentary, he said, is also an important aspect of growing a sport that will help viewers to understand sport better. Broadcasters, he said, should approach different markets by launching regional feeds that will build an instant connect.

    "The problem is we tend to treat India as one big mass. There is a big opportunity in regional markets. We should have regional feeds with commentary in regional language," Raman said.

    He further stated that rights holders should start exploiting other revenue streams like digital media which will increase the reach of the event. "Consumption of sports on digital medium is increasing, we should tap into this segment but broadcasters are focusing on internet fearing loss of viewers."

  • Trai issues notice to broadcasters to implement ad cap

    NEW DELHI: Even as it has sought clarity from the Information and Broadcasting Ministry on its powers in acting against violators, the Telecom Regulatory Authority of India (Trai) has issued notices to broadcasters to adhere to the 10+2 ad cap fixed by it in May last year.

    And even as broadcasters are unsure of Trai’s powers in implementing these regulations, the Authority has asked all broadcasters to give reasons by 10 March for not implementing the ad cap limit.

    Trai had stated that no broadcaster shall carry advertisements exceeding 12 minutes in a clock hour in a programme. The clock hour commences at 00.00 of the hour and ends at 00.60. Any shortfall of advertisement duration in a clock hour shall not be carried over. Advertisements included not only the commercials, but also the channel’s own promotions for its shows or for the channel per se.

    Broadcaster bodies had at that time opposed the suggestions citing ground realties in implementing them and the fact that the duration and number of ad breaks should be decided by market forces and not by regulating authorities. It is also felt by the broadcasters that this will hit their annual balance sheets.

    Broadcasters bodies Indian Broadcasting Foundation (IBF) and News Broadcasters Association (NBA) have been asked by the broadcasters to take a call on the issue as enforcement of the Trai rules may affect their viewership as well as their earnings, particularly in a scenario where the channels are still dependent more on commercial revenues than on subscriptions.

    A consultation paper in March 2012 had stated that there was a precedence of a Supreme Court ruling which had held that the restriction on advertising space in newspapers would lead to reduction in their revenues which was in violation of Article 19 (1)(a). The same rule should also apply to television.

    It was stated that the regulation also contradicts Trai’s own ruling of 2004, which had stated that there should be no regulation on advertisements – both on free to air and pay channels.

    Trai, upset over inaction on complaints against broadcasters, had asked the Ministry earlier this month to clarify if it is empowered to enforce rules on duration and format of TV advertisements if it wants to avoid possible “embarrassment” and litigation.