ITV

Tag: cable TV

  • US ad spend sees modest rebound in Q1: Kantar Media

    MUMBAI: Total ad expenditures in the first quarter of 2012 in the US increased by 2.6 per cent from a year ago and finished the period at $32.9 billion, according to data released by Kantar Media, a provider of strategic advertising and marketing information.

    The gain represents a modest rebound compared to flat spending in the second half of 2011.

    Kantar Media US chief research officer Jon Swallen said, “After a sluggish start in January, the pace of measured ad spending quickly accelerated and grew at an average rate of more than four per cent during February and March, the best performance in more than a year. Early figures from the second quarter indicate continued modest growth with improvement trickling down to media that have been lagging the overall advertising market.”

    Measured ad spending by media

    Ad expenditures increased across every television media type in the first quarter of 2012. Sports programming was the engine behind year-over-year gains of 7.4 per cent in cable TV and seven per cent in Network TV spending. More than two-thirds of this dollar volume growth came from sporting events, led by the NCAA Men’s Basketball Tournament and NFL post-season games.

    Comparisons were helped by a calendar timing shift that moved ad money for the NCAA Final Four games out of April and into the very last day of the first quarter.

    Syndication TV budgets rose by 15.7 per cent and were aided by more hours of programming as well as audience ratings gains. Spot TV, benefitting from a biennial business cycle tied to political
    advertising and Olympics in even-number years, saw spending increase 2.5 per cent versus a year ago.

    Spanish Language TV expenditures were up 20.7 per cent, reflecting higher automotive spending and larger allocations from a broad range of consumer packaged goods marketers.

    Other Spanish Language media types also posted gains, albeit from much smaller bases. Year-over-year spending in Spanish language magazines surged by 26.5 per cent and Spanish language newspapers increased by 4.7 per cent.

    Outside the Hispanic market, print media continued to lose ground. Expenditures in consumer magazines dropped 4.2 per cent from a year ago and budgets in Sunday magazines were off 4.6 per cent due to cutbacks from auto manufacturers, food companies and prescription drug marketers.

    Local newspaper ad spending fell 3.9 per cent and national newspapers declined by 7.7 per cent, each hurt by substantial reductions from the financial service, travel and telecom categories.

    The losses in newspaper spending were consistent with reductions in the amount of space sold.

    Within the universe of 2,811 Internet sites that Kantar Media measured for at least a full year, display expenditures fell by 4.1 per cent during the first quarter. The overall spending reduction was primarily attributable to fewer display ads appearing on the average web page, with some offset from higher average CPMs. There was also a sharp split between popular, high-traffic sites, where spending was close to flat year-over-year, and the many small, long-tail sites, which saw an aggregate percentage decline in the mid-teens.

    Outdoor advertising investments rose 4.6 per cent, the eighth consecutive quarter of year-over-year increases. Higher spending from core categories including Local Serices, Retail and Restaurants were a prime catalyst.

    Measured ad spending by advertiser

    Spending among the ten largest advertisers in the opening quarter of 2012 was $3,922.3 million, a 5.5 per cent decline compared to a year ago period. Among the Top 100 marketers, a diversified group accounting for more than two-fifths of all measured ad expenditures, budgets climbed by 3.4 per cent.

    Procter And Gamble was the top-ranked advertiser with spending of $685.0 million, down 4.7 per cent. The decline comes against the backdrop of a Q1 announcement by P&G that it plans to tighten the reins on marketing budgets and shift more money out of traditional media.

    Comcast was the second largest spender during the period with outlays of $482.7 million, an increase of 4.3 per cent that was propelled by the ongoing rollout of its Xfinity service. In contrast, media expenditures at rival telecom companies fell sharply. AT&T slashed its spending by 31.6 per cent, to $388.9 million, as the company deferred budgets to support an upcoming marketing push timed to the Summer Olympics.

    Verizon Communications trimmed its expenditures by 9.2 per cent to $358.6 million.

    Only two automotive advertisers landed in the Top Ten. General Motors reduced spending by 17.8 per cent to $403.3 million, the seventh consecutive quarterly decline for the automaker. Toyota Motor spent $327.8 million, an increase of 8.6 per cent.

    News Corp registered the largest per cent gain among the Top Ten as budgets jumped 24.9 per cent to $357.5 million. Time Warner also had a healthy gain as its quarterly spending reached $301.5 million, up by nine per cent. Results for both companies were shaped by their movie studio divisions.

    Measured ad spending by category

    Expenditures for the ten largest categories grew by 3.1 per cent in the first quarter of 2012 to $20.73 billion. Automotive was the top category with $3,528.9 million of spending, down 1.5 per cent. Manufacturer budgets contracted by 6.9 per cent primarily because there were fewer marketing launches in 2012 to provide impetus for higher budget levels. Dealer spending remained
    robust with a gain of 8.7 per cent amidst a strong retail sales climate.

    Retail was the second largest category by dollar volume with media investments of $3,373.5 million, up by 8.6 per cent. The department store segment was especially strong, spurred by a significant repositioning campaign from JC Penney which in turn prompted most rival brands to increase their own budgets.

    Financial services posted the highest rate of growth among the Top Ten categories, a 10.1 per cent increase to $2,120.6 million. Fierce competition among credit card issuers, revitalised marketing programs for retirement planning services and higher budgets from tax preparation firms were the growth drivers.

    Expenditures for personal care products rose by 4.8 per cent to $1,476.6 million and the Restaurant category boosted its spending by 3.7 per cent to $1,523.0 million.

    Telecom advertising remained soft during the quarter and finished 2.8 per cent lower at $2,102.6 million. Sharp budget reductions from wireless carriers were only partially offset by increases from TV service providers and mobile device manufacturers.

  • TV holds lion’s share of ad spends in US: Nielsen

    MUMBAI: The ferocious growth of the digital medium notwithstanding, television continues to hold the lion’s share of ad dollars and consumers media time in the US, according to Nielsen.

    Television ad spend was up 4.5 per cent in 2011 even as total ad spends increased by a mere two per cent, according to the third and final part of Nielsen’s Advertising & Audiences Report.

    The total ad spend for TV reached $72 billion, more than all other ad platforms combined. The print media commanded the second biggest share of ad spends with magazines and newspapers collectively cornering $28 billion. Internet and radio garnered $6 and $7 billion respectively.

    The report took an in-depth look at media consumption by platform and found that American advertisers and consumers have a huge appetite for television, as TV holds the lion’s share of ad dollars and consumers’ media time.

    Spending on cable TV has increased steadily over the last few years, up 42 per cent from 2007, the report added.

    Spanish-language cable and network TV saw double-digit growth in ad spend, up 24 per cent and 16 per cent respectively, from 2010.

    Automotive was the largest category for advertising spend across all media, with $10.2 billion spent by automotive brands while AT&T and Verizon were the top TV spenders during 2011 for brands AT&T Wireless Web Access ($1.1 billion) and Verizon Wireless Web Access ($702.2 million).

  • TV networks flay Trai for ad regulation

    NEW DELHI: The Telecom Regulatory Authority of India does not have the mandate to regulate advertising and any content-related issues, according to a majority of the stakeholders who have responded to the review call by the broadcast sector on capping ad duration on television channels.

    The consumer rights organisations or individual consumers, on the other hand, have welcomed Trai‘s decision to regulate advertisement time. Some have also called for a Consumer Redressal mechanism to check violations as they find the endless running of ads on certain genre of channels a serious irritation.

    The Advertising Standards Council of India (Asci), however, is not among the forty-odd respondents as the Consultation Paper does not deal with content but only with regulatory issues relating to duration and timing of commercials.

    Indian Broadcasting Foundation, the apex organisation of television broadcasters, says the paper “appears to have been issued in an injudicious manner in so far as it reflects on the Authority’s power to regulate content on television channels”.

    The present consultation paper posits that the heavy reliance of Indian broadcasters on advertising revenues is due to the “non-addressable nature of the cable TV networks,” and “gross under declaration of the subscriber base”.

    “The under-representation of subscription revenues in the business model of Indian broadcasting is also due to a decade of excessive regulation of subscription models — including tight retail rate regulation, increasing interference in wholesale rate-setting, and maintenance of “must-provide” mandates that prevent platform differentiation and unnecessarily restrain competition,” the IBF said.

    The IBF further added that over-regulation was responsible in creating the industry’s current imbalances. It suggested that the key to resolving the imbalances lies in progressively remedying the ills at their cause.

    The federation also pointed that Indian broadcast industry has one of the lowest monthly ARPUs in the world under $4 vs $60-120 for developed nations, as per Ficci-KPMG 2012 report.

    While reiterating Trai’s own position as stated in Tdsat, Star TV India says the regulator has no jurisdiction to regulate advertising as per extant laws, rules and regulations.

    Star argues that any shrinking of advertisement space is likely to impact broadcaster’s ability to offer superior and differentiated content to their viewers at an affordable price. It says Trai’s proposed recommendations are retrograde, will substantially increase the costs to consumers, will burden advertisers with higher costs, and will drive out marginal and smaller advertisers from advertising their products on national television.

    Zee TV says that curtailing advertisements would mean infringing on the fundamental right of free expression quoting Supreme Court judgments to say that any kind of restriction on media ads would be violative to the fundamental rights of Speech and Expression as enshrined in the Constitution.

    It has also questioned why TV is being targeted while newspapers are free to carry any amount of advertising. It suggested that the issue of advertising which is purely a content issue should be left to self-regulation as at present any attempt/suggestion to regulate the same would be highly detrimental for this sector. It also said that several TV channels will be forced to close down with severely restricted ad time.

    Times Television Network says it would be better for Trai to concentrate on smooth switchover to digital access systems instead of spending its time on issues like advertisements, which have been clearly addressed in the CTN Rules. While stressing that Parliament has already passed the CTN Rules and Trai cannot override those, it also questions the regulator making a difference between free to air and pay channels as arbitrary, unwarranted, and not based on sound facts.

    A response by Vijay Television and Asianet Communications on behalf of South Indian regional channels questions the jurisdiction of Trai. It says the paper fails to provide adequate justifications for a differential regime for Pay and FTA channels and also does not take into account the unique business model of regional broadcasters who operate in challenging regime of sky rocketing content acquisition costs and an onset of Carriage spends which makes mockery of the “Pay revenues” earned from the MSOs and cable operators.

    They say regulation in advertisement would eventually lead to heightened subscription fees, the burden of which may have to be ultimately borne by the consumer. Additionally, this could lead to further reduction in the quality and variety of content, thus leading to the commodification of the entire content industry.

  • ‘Digitisation will not spur irrational price war as the Santa Clauses are broke’ : Hathway Cable & Datacom MD and CEO K Jayaraman

    ‘Digitisation will not spur irrational price war as the Santa Clauses are broke’ : Hathway Cable & Datacom MD and CEO K Jayaraman

    Hathway Cable & Datacom has an ambitious investment plan of Rs 10 billion as India opens up to digitisation across the country.

     

    In the first phase, India’s leading multi-system operator (MSO) plans to invest Rs 1.75 billion even as it expects DTH to take away 10-15 per cent of its cable TV subscribers in the two lucrative markets of Delhi and Mumbai.

     

    Sitting on a cash pile of Rs 2 billion, Hathway will not source equity finance at this stage. Though net losses will drag on for a long period in a digital environment, the MSO hopes to regain its old valuations if it manages to successfully implement the early phase of digitisation.

     

    Even as carriage revenue will shrink, Hathway’s endeavour will be to have an Ebitda of 20-25 per cent right from the start of mandated digitisation.

     

    In an interview with Indiantelevision.com’s Sibabrata Das, Hathway Cable & Datacom MD & CEO K Jayaraman talks about how no cable or direct-to-home company is in financial health to launch an irrational price war. He also elaborates on the MSO’s digitisation gameplan.

     

     

    Excerpts:

     

    DTH companies have made rapid progress in recent years. How is Hathway Cable & Datacom prepared to exploit the first phase of digitisation?
    We plan to invest Rs 1.75 billion in the first phase. This will include Rs 200 million towards marketing in Mumbai and Delhi over the next 6-8 months. It is the first time that we are splurging on media campaigns.

    Are you comfortably placed on the funding part or you plan to raise fresh capital?
    We have a cash pile of Rs 2 billion. We will not source equity finance at this stage. We are comfortably placed and will manage with bank debt and vendor credit.

    Will you need funding in the second stage?
    We will see when we reach there. We have already digitised around two million homes. We will need to digitise our remaining 6-8 million existing homes (including multiple TVs). Our funding requirement will be Rs 10 billion as we need to subsidise the set-top box (STB) cost and make further investment in infrastructure.

    Hathway was selling at Rs 500 a STB to its customers in voluntary digitisation. Will you further subsidise the boxes in a mandated digitisation environment?
    We are looking at charging Rs 750-790 a STB (including taxes) as the rupee has depreciated against the dollar.
    “LCOs will get a revenue share of 30-35%. They will gain from 2nd TV homes, operational efficiencies and Vas. Distributors will get a 5% rev share. They will also get a 30% share in carriage revenues”

    But DTH could go aggressive and there could be a price war situation?
    We won’t sell below this even if there is a price war. We do not have the financial resources to further subsidise the boxes.

     

    We, however, feel that no player is in a position to indulge in an irrational price war. Nobody in cable can do so. DTH will fight for market share on the basis of perception and brand. All the Santa Clauses are broke.

    Are you expecting a migration to DTH?
    We expect DTH to take away 10-15 per cent of our cable TV subscribers in the two lucrative markets of Delhi and Mumbai. But we see a surge in second TV homes. Besides, we will launch three packages – lower, middle and top-end. In all the packages, we will have a price advantage. Also, we will have more channels on offer than DTH because of our bandthwidth superiority.

    Will the supply of STBs be impacted due to a sudden rise in demand?
    We have ordered 1.3 million digital STBs and signed a letter of intent for another 0.5 million. We estimate our subscriber universe to be 1.5 million in Mumbai and Delhi. About 20 per cent of this will be second TV sets.

     

    We also have a presence in Kolkata through our joint venture company, Gujarat Telelinks Pvt. Ltd (GTPL), which acquired a 51 per cent stake in Kolkata Cable and Broadband Pariseva. We expect to at least seed 400,000 boxes there.

     

    We have already seeded 250,000 STBs on a voluntary basis in Delhi and Mumbai.

    Crucial to the whole implementation of digitisation is the appeasement of the local cable operator (LCO). Have you fixed the revenue share terms with them?
    The LCOs will get a revenue share of 30-35 per cent. There will be a loss of revenue for them but they will make up to some extent with the second TV homes, where they don’t usually charge anything from the subscriber. Besides, they will gain from operational efficiencies and will discover new homes in a digital environment. Also, there will be a revenue share for them from value-added-services (Vas). So they should reasonably settle with us.

     

    The distributors will get a five per cent revenue share. They will also get a 30 per cent share in carriage revenues. In Mumbai, we are comfortable with the distributors. There may be some issues in Delhi but we will manage to strike a smooth bond with them.

    Why haven’t the MSOs sat down together and decided on a common share for the LCOs who control the last mile to the consumer?
    That would attract the Competition Commission of India. But in any other form, we will make efforts to drive consensus up. We don’t want any fissure surfacing among the stakeholders. We can’t afford to derail DAS (Digital Addressable System).

    Do you expect carriage revenue to shrink considerably?
    We expect it to shrink by 30 per cent in the digital environment. This can even go up to 50 per cent. But we will be somewhat compensated by a reduction in content cost.

    How?
    We will do fixed fee deals with broadcasters and believe content cost in a digital scenario will fall in the region of 35 per cent. We are close to sealing deals with two big broadcasting companies.

     

    Even sports channels should allow us to price reasonably; customers should take it round-the-year. Otherwise, we will offer it on a-la-carte basis to consumers.

    Analysts predict that net losses of MSOs will drag on till at least 2016 in a digital environment?
    We can’t predict now. But Hathway aims to stay Ebitda positive. We expect our Ebitda to be at least in the 20-25 per cent range. We know it will be difficult at the early stage of digitisation but our endeavour will be towards achieving that range from the start.

    Hathway had fixed it IPO price band at 240-265 and the scrip is now quoting at Rs 116 per share. When will the valuation be regained?
    We will regain good valuations if we manage to seed the boxes. Investors are bothered about that and not about net profitability at this stage.

    Do you expect the second phase to be tougher for you?
    For Hathway, the ride in the second phase could be even smoother as we have already got a large population of digital subscribers on a voluntary basis in some of these major cities like Bangalore and Hyderabad. Our digital penetration in some of these cities is as high as 60 per cent. In Gujarat we have seeded 150,000 (out of our
    estimated current subscriber universe of 220,000) STBs, in Hyderabad we have 350,000 (out of 800,000) and in Bangalore we have a digital population of 275,000 (out of 400,000).

     

    And in Jaipur, Indore and Bhopal, we have a digital penetration of 40 per cent out of our current subscriber base. In Phase II, we are far ahead.

    Will you follow the acquisition route?
    We will not pursue acquisitions and will prefer to conserve capital for digitisation. We will not do any more analogue consolidation. It is bad to add analogue weight in the current circumstances. Our focus will be on digitsation.

     

    Post digitisation, we may be interested in acquisition in some of these cities. But it should come at the right price.

    Are you looking at launching value-added services?
    We will tie up with either Ericsson or Cisco for Video-on Demand (VoD) services. We will decide in March whom to partner with. We have launched HD services and also bundled it with our broadband offering. We hope it will enhance our average revenue per user (ARPU). We have 2000 HD subscribers. Given that we get Star bouquet on HD and spend on marketing, we expect HD to eventually account for 10 per cent of our subscriber base.

    Are you bullish on your broadband growth?
    Yes, that gives us an advantage over DTH. We are also ahead of the other big MSOs so far as broadband goes. We will be bundling broadband with digital cable to offer better value to the consumers. The broadband homes passed stand at 1.7 million and our actual subscribers are 400,000.
  • Delhi High Court grants copyright protection for Speedy Singhs

    Delhi High Court grants copyright protection for Speedy Singhs

    MUMBAI: Following that of Singham and Bodyguard, the Delhi High Court has given the much-needed relief to Hari Om Productions, producer of Speedy Singhs, towards its copyright protection a day before its release on 22 September.

    The production house had moved the HC against a few cable operators and against unknown defendants for a temporary and permanent injunction for any copyright infringement.

    After hearing the producer‘s lawyers, the Delhi HC passed the ‘John Doe Order‘ against all the defendants, including unknown persons, restraining them from, in any way displaying, releasing, showing, uploading, downloading, exhibiting, playing, defraying the movie Speedy Singhs, without a proper licence from its producers.

    The order also restrains those who may wish to release or distribute the film without permission through CD, DVD, Blu-ray, VCD, Cable TV, DTH, internet, MMS, tapes, conditional access system or other media. The order is valid till December 19, 2011.

    The term ‘John Doe Order‘ is used to describe an injunction sought against someone whose identity is not known at the time it is issued.

    While the makers of Singham got the order from the Delhi High Court in July, Reliance Entertainment got the same in August for Bodyguard.

  • US ad spend up 6.5% to $131.1 bn in 2010: Kantar Media

    US ad spend up 6.5% to $131.1 bn in 2010: Kantar Media

    MUMBAI: Total ad expenditure increased 6.5 per cent in 2010 and finished at $131.1 billion, according to data released by Kantar Media which provides strategic advertising and marketing information.

    Ad spending during the fourth quarter of 2010 was up by seven per cent versus last year, propelled by the long-tail of small advertisers outside the Top 1000.

    Kantar Media US senior VP research Jon Swallen said, “The feel good headline is the ad economy grew by 6.5 per cent in 2010. The more comprehensive assessment is that increased spending has not benefitted all sectors equally. While television media have recouped their losses from the 2009 advertising downturn, several other large segments are still 15 to 20 per cent below their 2008 peaks.”

    Measured Ad Spending By Media : TV ad spending remained robust as spot TV expenditure jumped by 24.2 per cent in 2010 due to the biennial surge in political advertising, a revived automotive category and a pronounced budget allocation shift among retail bank advertisers.

    Spanish language TV spending rose 10.7 per cent, assisted by the World Cup event. Higher sell out levels helped lift cable TV expenditure by 9.8 per cent and healthy demand from CPG marketers and credit card companies pushed Network TV spending ahead by 5.3 per cent.

    Internet display advertising increased 9.9 per cent compared to the prior year, the second largest growth rate among media sectors. Outdoor advertising was close behind with a gain of 9.6 per cent.

    Improvements in radio advertising were tilted towards local markets. National spot radio brought in 18.6 per cent more ad dollars versus 2009 and local radio achieved a 4.9 per cent increase. For each of these, higher spending was driven by the financial service, media and auto dealer categories.

    Growth rates for print media trailed the overall ad market. Expenditure in consumer magazines were up a modest 3.3 per cent while national newspapers rose 2.7 per cent, primarily due to publishing expansion at the Wall Street Journal. Ad spending in local newspapers sank 4.6 per cent versus a year ago despite a small uptick in the volume of space sold. Local newspaper spending has now declined for 21 consecutive quarters.

    Measured Ad Spending By Advertiser: Spending among the ten largest advertisers in 2010 reached $16,345.8 million, a 3.7 per cent increase compared to last year. Among the Top 100 marketers, a diversified group accounted for close to one-half of all measured ad expenditures, and investments climbed 8.8 per cent.

    For the eighth consecutive year, Procter & Gamble was the top advertiser with spending of $3,123.9 million, up 17.7 per cent compared to a year-ago period.

    L’Oreal posted the largest rate of increase among the Top Ten with expenditures soaring 30.6 per cent to $1,112.4 million. The company boosted marketing support broadly across its portfolio of mass market and prestige cosmetics brands.

    Among auto manufacturers, Ford Motor upped its total ad budgets by 11.1 per cent to $1,132.2 million. Rival General Motors reduced spending slightly, down 1.3 per cent to $2,130.7 million. For both companies, exceptionally high levels of ad support in Q4 2009 timed to the leading edge of the auto sales rebound made for difficult comparisons in Q4 2010 and pulled down the full year growth rates.

    AT&T raised expenditures by 12.1 per cent to $2,092.8 million as it continued to expand marketing efforts for its residential and mobile TV services. Verizon Communications trimmed ad spending 15.2 per cent to $1,823.2 million.
    Significant reductions were seen in the ad budgets of Pfizer (down 11.7 per cent to $1,228.7 million) and Johnson & Johnson (down 7.5 per cent to $1,139.7 million).

    2010 vs. 2009

    Rank Company 2010 ($Millions) 2009 ($Millions)% Change

    1 Procter & Gamble Co $3,123.9 $2,653.8 17.7%

    2 General Motors Corp $2,130.7 $2,157.9 -1.3%

    3 AT&T Inc $2,092.8 $1,867.0 12.1%

    4 Verizon Communications $1,823.2 $2,149.7 -15.2%

    5 News Corp $1,368.4 $1,238.8 10.5%

    6 Pfizer $1,228.7 $1,391.5 -11.7%

    7 Time Warner Inc $1,193.6 $1,200.0 -0.5%

    8 Johnson & Johnson $1,139.7 $1,232.6 -7.5%

    9 Ford Motor Co $1,132.2 $1,019.0 11.1%

    10 L’Oreal Sa $1,112.4 $852.0 30.6%

    TOTAL $16,345.8 $15,762.3 3.7%

    Measured Ad Spending By Category: Expenditures for the ten largest advertising categories increased by 6.5 per cent and totaled $74 billion. Automotive was the leading category in both dollar volume and growth rate, finishing 2010 at $13 billion, up 19.8 per cent. Category spending grew almost twice as fast as new vehicle sales (19.8 per cent versus 11.1 per cent), reflecting a fiercely competitive marketing environment for manufacturers and dealers.

    Telecom was the second largest category with 2010 budgets rising a modest foir per cent to $8,751.5 million. Lower spending by wireless carriers and satellite TV companies was offset by higher outlays from cable TV service providers.

    Package goods advertising remained active at year end as a broad range of manufacturers sought to defend market share against value-priced store brands and generics. Expenditures for Personal Care products were up 11.7 per cent to $6,161.0 million and the Food and Candy category rose 7.1 per cent to $6,672.3 million.

    Ad spending for Financial Services increased six per cent to $7 billion. In the aftermath of the financial crisis, marketing activity has picked up noticeably for products related to debt (credit cards, consumer loans) while advertising budgets for savings related segments have lagged (investments, retail banking).

    Only two of the Top Ten categories experienced year-over-year declines. Direct Response budgets fell by 5.8 per cent to $6 billion. Pharmaceutical expenditures dropped 8.2 per cent to $4 billion, the lowest dollar amount for this category since 2003.

    Branded Entertainment: Kantar Media continuously monitors Branded Entertainment within network prime time and late night programming. The tracking identifies brand appearances and measures their duration and attributes. Given the short length of many brand appearances, duration is a more relevant metric than a count of occurrences for quantifying and comparing the gross amount of brand activity that viewers are potentially exposed to in the programme versus the commercial breaks.

    In the fourth quarter of 2010, an average hour of monitored prime time network programming contained six minutes, fifty seven seconds (6:57) of in-show brand appearances and 14:50 of network commercial messages. The combined total of 21:47 of marketing content represents 36 percent of a prime-time hour.

    Unscripted reality programming had an average of 14:19 per hour of brand appearances as compared to just 4:50 per hour for scripted programmes such as sitcoms and dramas. Late night network talk shows had an average of 10:31 per hour. The combined load of brand appearances and network ad messages in these late night shows was 25:22 per hour, or 42 per cent of total content time.

  • Whither, or Wither, Cable TV industry? Star India President (South India) Jagdish Kumar

    Whither, or Wither, Cable TV industry? Star India President (South India) Jagdish Kumar

    Circa 1994: Star Movies decides to convert from a free-to-air service to become the first pay TV channel in India. Negotiations between the pay channel and cable operators went thus:

    Pay channel executive (prosperous looking and suited executive): “You have to pay to receive Star Movies”.

    Operator (not very prosperous looking and ordinarily dressed): “Only some of my customers watch Star Movies and my customers pay only Rs 150 per month. After meeting my operating expenses, how much can I pay?”
     
    Pay channel executive: “I have a budget to achieve. I don‘t have a lot of time to negotiate. I have a flight to catch to get to headquarters. My target for this town is Rs 10000 and I have decided your share is Rs 1000. I will send you our standard agreement shortly. That‘s it- no further negotiations”.

    Circa 2010: There are 154 pay channels registered with the Telecom Regulatory Authority of India (Trai) and the negotiations between channels and cable operators go thus:

    Pay channel executive (casually dressed): “You have to increase your payment by 20 per cent to receive our bouquet of channels”.

    Operator (very prosperous looking and attired in designer brands): “Only some of my customers watch your bouquet and my customers pay only Rs 150 per month. After meeting my operating expenses, how much can I pay?”

    Pay channel executive: “Please understand, I have a budget to achieve to get my bonus. My growth target for this town is 20 per cent. However as an exception, only for you, I can work with a special growth rate of 5 per cent. Please agree to settle for Rs 1500. I will separately organise a foreign tour for you.”

    Operator: “Thank you. But I would also like to inform you that there is a huge demand for bandwidth and you have to pay Rs 750 as carriage fees”.

    Fortunes of the players have reversed since the beginning of pay TV services in India 16 years ago. While many channels are limping financially, operators have achieved prosperity beyond their imagination. Should we grudge the good life that operators are enjoying? Definitely not! During the last two decades India has witnessed incredible growth in C&S TV connectivity to the current level of about 95 million homes mainly driven by the entrepreneurism of the operators.

    There are two elements which have remained constant between 1994 and 2010:

    • The retail price of pay TV services have stagnated at around Rs 150 per month ( India has the cheapest pay TV service in the world) and
    • Incrementalism and myopic pay TV revenue targets set by channels.

    There seems to be near unanimity of opinion that the current abysmal state of the cable TV business in India is the result of under-declaration of subscribers by operators. While there is truth in that conclusion; it is not the whole truth. There is one truth which gets lost in the din of consultation papers, conferences, workshops and digital summits – The tyranny of incrementalism and the short-term nature of pay TV revenue targets of channels.

    The community of pay TV executives in India straddles two different worlds- Cable TV networks and corporate meeting rooms. The former world has a law of its own driven by native intelligence and the latter is a world of power- point presentations driven by business school intelligence. These two worlds have a love-hate relationship and a pay channel executive has to acquire skills to navigate between both these worlds. Both these worlds meet periodically either during contract renewal negotiations or during incentive jaunts in the sand dunes of Dubai/ blue waters of Bali/alleys of Amsterdam. They sometimes also have acrimonious meetings in the dreary environs of Sastry Bhavan or Sanchar Bhavan in Delhi.

    From the beginning, due to the lack of addressability, agreements between channels and operators for pay TV services are settled by the hustling power of the negotiators. Annual contract renewal discussions are sting operations full of obfuscations, sophistry, innuendos, threats, rumours and sometimes emotional outbursts which would put some of our TV programmes to shame! Only oblique references are made to the core matter of the negotiation, viz., connectivity numbers and price. Actual subscriber numbers and price is normally a by-product of the main negotiation primarily to satisfy computerised billing software programmes of the channels and regulatory filings.

    Over a period of the last two decades, pay TV executives were relentlessly handed down incremental targets set on an annual basis by the Board rooms of the channels. Based on these incremental targets, pay channel executives begin their contract signing campaign with operators with all the possible wit and wisdom at their command. Sometimes these contractual negotiations become weapons in the pay channel executive‘s hands to demarcate network operating areas between competing operators. In case of disagreements during the negotiations, a competing “rebel” operator is encouraged by the pay channel executive to encroach into the incumbent operator‘s area. This practice has led to chaotic conditions in the last mile with each area being serviced by more than one operator and all players perfecting the art of brinkmanship.

    Introduction of the MSOs into the distribution chain during the last decade was meant to professionalise and consolidate the last mile. However, territory wars amongst MSOs and a period of easy capital availability for new entrants has resulted in the opposite. The industry has fragmented irreversibly.

    We are confronted with dismal scenarios when we crystal gaze into the future of the analog cable TV industry in India. However, I believe all is not lost. Ironic though it may seem, the threat of DTH has thrown open a door of opportunity to the cable TV industry – Digitalisation. An additional shot in the arm for the cable TV industry is the latest initiative by I&B Ministry and Trai to mandate full digitalisation in India by 2015 with intermediate time bound milestones.

    The ambitious digitalisation objectives as stated by the I&B Ministry requires massive deployment of financial and technical resources. Let‘s hope all stakeholders of the cable TV industry step up to the challenge.

    Here is my wish list for 2011 for the cable TV industry:

    ” All MSOs to arrive at an amicable settlement by demarcating territories of operations and cease encouragement of migration of last mile operators between MSOs. ” MSOs/LCOs to gear up financially and technically to meet the challenges of the ambitious digitalisation targets proposed by the I&B Ministry.

    • Pay channels to temper their incremental short term revenue targets during the investment phase of digitalisation to reap the benefits of addressability later.
    • MSOs to reduce their dependence on carriage fees as the main source of revenue and generate subscription revenues from the last mile as their primary revenue source.
    • Government to give “Infra-structure” status to the cable TV industry to enable institutional financing and provide fiscal incentives /concessions to facilitate digitalisation.
    • Government to withdraw from pricing controls over the cable TV market and allow market forces to drive consumer choice and price.
    • Broadcasters to catalyze digitisation by providing channels/programmes which can be accessed only through an addressable digital box.

    We are at a critical juncture where the cable TV industry should take a pro-active role in the implementation of the proposals initiated by the Government to digitalise. The only option for survival is to go Digital, anything else will spell Doom!

  • ‘Our biggest challenge is raising the low yields in the Hindi movie channel genre’ : Star Gold GM Sameer Rao

    ‘Our biggest challenge is raising the low yields in the Hindi movie channel genre’ : Star Gold GM Sameer Rao

    Star Gold general manager Sameer Rao is known to be a numbers man. A chartered account and an MBA in finance, Rao has a 19-year career graph that spans stints in UBS and Arthur Andersen.

     

    His baptism in media took place at Star in cable TV distribution, followed by the internet, the commercial department and then finally to his current posting. He was given additional charge of Star Utsav in end 2009.

     

    Indiantelevision.com’s Ashish Mitra spoke to Rao about the changes he has brought at Star Gold and the prospects for the channels he heads.

     

    Excerpts:
     

    How large is the Hindi movie channel space? What is the lay of the land?

    Our estimates are that all the movie channels put together make it a Rs 5,200 million ad revenue market. No doubt, Zee Cinema is the leader followed by MAX, and we are at the No 3 slot. For about six to eight weeks every year, because of the IPL and cricket, MAX steals ahead and then it goes back to the previous ranking.

     

    Raising the low yields in this channel genre is the biggest challenge. The inventory is keeping on growing with new channels launching: UTV Movies, for instance, entered the fray with two channels. GRPs of movie channels used to be much higher a year ago than is the casenow. There are times the ratings race becomes a big issue with us when competing with the likes of GECs such as Sony, Sab and Imagine as they are in the same GRP range as us. But the realisations by these channels for commercial time are higher.

    Can you gives us your analysis of the Hindi movie channel genre?

    The movies genre, if you aggregate consumption across movies channels, movies on Hindi GECs and movies on cable channels, is as big as the Hindi GEC slice. However, perception wise, it is regarded as much smaller, possibly because it is acquired content as opposed to original programming.

     

    On the supply side, satellite buyers have emerged as key players in the Hindi film industry and are critical to the viability of any Hindi film project. With some changes both on the buying and selling side, it is possible that movie channels will be able to offer much more value to all stakeholders – film producers, advertisers, viewers – while remaining a healthy and profitable business for the broadcast networks.

    You were looking after commercial for Star Plus when you were called to take charge of Star Gold and Star Utsav. What was your analysis of the two channels and your health report for them?

    I was responsible for programming commercial for the Hindi language channels at Star between March 2007 and November 2009. I took over as Star Gold general manager in March 2008 and Star Utsav general manager in late 2009. Star Gold is a healthy and growing business and Star Utsav is stable but a lot more could potentially be achieved.

    What changes did you initiate at Star Gold to fast pace its growth amongst its competing players ?

    My fundamental approach towards programming on Star Gold was to build slots that delivered on a defined content promise to a movie consumer. The slots were developed based on research inputs on content themes that audiences wanted to see on a movie channel.

     

    Thus, we built permanent action, comedy and kids slots apart from the Hollywood dubbed slot, which we had launched several years ago.

     

    Apart from this, we also incorporated slots for thematic movie festivals through the year, which would run from one to six weeks. For example, one of these, Sabsey Favourite Kaun, culminates in a big scale televised award show, India’s only audience polling driven movie awards.

     

    Hence, once we had the slots ready, we acquired movies designed to develop and grow the slots. All these initiatives helped us narrow the gap between us and the genre leaders.

    Star Gold was not being marketed aggressively. How have you changed this in terms of above the line and below the line activity?

    Marketing for the channel is in line with the programming strategy of building up slots and festivals. A lot of it happens outside Mumbai as our biggest consuming markets are Uttar Pradesh, Gujarat, Delhi and Maharashtra.
    ‘We are just four GRPs behind Zee Cinema and 16 behind MAX. If we do the right things we can overtake the leader.‘

    Your list of acquisitions and syndications.

    Last year, we acquired films aggressively. We got the Salman Khan-starrer Wanted, the Amitabh Bachchan-starrers Aladin and Paa, the Akshay Kumar-starrers De Dana Dan and Housefull and the Ajay Devgn-starrer Atithi Tum Kab Jaoge. Besides Wanted, all other acquisitions were on an exclusive basis. Some runs of Wanted have been reserved for Sahara because they co-produced the film. We also have the non-exclusive rights of the latest RGV film Rann along with Life Partner and Luck.

     

    As far as syndication goes, we continue to syndicate with Zoom and UTV Movies. But this exercise entirely depends on the type of films the other channel wants to have.

    What are your plans for Star Gold?

    We’d like to lead the genre by the end of this calendar year. The network is building the catalogue through a mix of judicious new and library acquisitions and we continue to refine our slot-based programming and marketing strategy. I believe we need to acquire close to 20-25 more movies over a period of time. We are just four GRPs behind Zee Cinema and 16 behind MAX. If we do the right things we can overtake the leader. Our challenge is to have the right mix of old films, new films and blockbusters. We can’t buy the most expensive ones only; otherwise the low yields could erode our margins.

    Which are the major category advertisers for the channel?

    FMCG continues to be the biggest category. We are an important platform for male brands because of our deliveries in that demographic. We get the bulk of our advertising resources from the package of festivals. Going forward, several new acquisitions that we have gone into will boost the advertising pattern of our channel.

    Please highlight the milestones of Star Gold over the decade.

    Starting off in 2000 as a classic movie channel, we showed black and white films. We then switched on to telecasting coloured films from the post 70s. Rapidly, we turned into a channel with a modern look in terms of popular and critically-acclaimed cinema.

    Then in 2002, we launched the popular Sabsey Favourite Kaun (SFK) that first started as an award show. Then in December 2006, SFK went international. The show’s popularity can be measured well as last year, we received a whopping 17 million votes through SMS and internet in addition to the physical votes we received from people to select their favourite stars. This exercise lasted for over a period of two months.

     

    As for showing Hollywood dubbed content, we have excelled in showing the latest Hollywood films and rank above all other channels.

     

    Going forward, we hope to see Star Gold as a channel that boasts of new Hindi films.

    What has been the change in the channel perception over the years?

    The first major change in our channel was when we changed from a classic movie channel to a channel that specifies in several genres as far as films are concerned. Based on this, currently, we have a higher proportion of viewers. Our channel is driven around comedy films and of course Hollywood films. We want to build on the perception.

    You took charge of Star Utsav in 2009. What was your assement of the channel then and what changes have you brought in?

    Basically, Star Utsav is a channel that caters to repeat content. After I took over, I found that there were more repeats of shows of two distinct genres – mytholology and kids programmes. This was of course in addition to shows from the Star network.

     

    After I joined the channel, rationalising the schedule was my biggest priority.

     

    And now, we are looking at various opportunities keeping the taste and preference of the semi urban and rural markets in mind and devising a new strategy for Star Utsav. This will be implemented in the coming months.

    What were the ratings of Star Utsav when you took over and what are they now?

    The ratings are the same now comapred to when I hadn’t taken charge. It remains stable.

    What about advertisers? Have they been attracted to the channel?

    There is a potential beyond what the channel is currently generating in terms of advertiser participation and we are looking actively to tap such an opportunity.
  • Indiantelevision.com’s interview with You Telecom CEO EVS Chakravarthy

    Indiantelevision.com’s interview with You Telecom CEO EVS Chakravarthy

    Citi Venture Capital International-owned You Telecom India has resized its investment plan amid the economic downturn.

    The trimmed-down plan will mean a fresh investment of Rs 2.5 billion over two years, instead of Rs 4 billion as earmarked earlier.

    Narrowing down the spread, the expansion plan will focus on depth and consolidation of the business in the cities where You Telecom runs operations.

    The redrawn map will mean that You Telecom stays as a niche player in the market for at least two years, shunning away from a frenzy among many multi-system operators (MSOs) to land grab and build scale.

    You Telecom is in talks to rope in Indian investors for Digital Outsourcing, its cable TV arm. Tulsi R Tanti and his family members, promoters of wind power company Suzlon Energy Ltd, hold 49 per cent stake in the company. You Telecom has 36 per cent stake while the balance is held by high net worth Indian individuals.

    In an interview with Indiantelevision.com‘s Sibabrata Das, You Telecom CEO EVS Chakravarthy talks about how important it is for cable TV companies to work on their business models, stay away from reckless acquisitions, conserve capital and penetrate deeper into last mile services.

    Excerpts:

    Two MSOs are in the process of tapping the capital market. Do you think the cable TV sector has reached a stage of maturity for listing?
    The two preliminary draft prospectus filings are the first in the cable TV sector of significance for raising money from the capital market. The outcome of these two IPOs will send strong signals for the future. Investors will watch carefully the pricing of the issues, the intrinsic value of the business it captures and the sustainability of it. Hathway Cable & Datacom and Den Networks need to do everything to make sure that the sector becomes attractive for current and future investors.

    How does this impact companies like yours?
    We are not in a hurry to capitalise on the high valuations in the market today. We want to see if this is sustainable. We prefer to go to the market as a profitable company with a strong business model and management bandwidth. We want to time the IPO appropriately.

    Are you saying that Hathway and Den are in a hurry to raise money via the IPO route?
    Both the MSOs expanded aggressively through acquisition of cable networks. They need further capital to fuel their growth.

    Will these two listings aid digitisation?
    Consolidation will happen faster than digitisation. As a process of consolidation, I wouldn‘t be surprised if Hathway buys Den – or the other way round. Besides, more and more cable companies will get listed.

    Will the climate be favourable for foreign strategic investors like Comcast?
    Foreign strategic players will still stay away because no single Indian cable TV company has built that scale. Post consolidations, they will show interest. For Comcast and others to come, it is 3-5 years away.

    ‘Post listing of the two MSOs, consolidation will happen faster than digitisation. As a process of consolidation, I wouldn‘t be surprised if Hathway buys Den – or the other way round‘

    Since the IPO is throwing open early exit options for private equity firms, won‘t they find the cable TV sector attractive?
    Some of them came into the sector with the hope that the government-mandated Cas (conditional access system) will spread to other cities. That has not happened. Still the sector attracted further private equity investments as everybody saw an opportunity in the distribution business. New PE players will wait to see if the market price of the listed companies is sustainable. The calls that they will take now will be more informed due to the last two years of collective experience of the industry.

    You Telecom had plans to expand in the bull phase and had decided to invest Rs 4 billion over two years. What made you scale back your investment plans?
    We have decided to pump in Rs 2.5 billion over the next two years to boost our cable TV and broadband business (the investments for cable TV are made through a subsidiary company, Digital Outsourcing). Our focus will be on depth and consolidation of the business in the cities where we run operations. We had earlier planned to expand into 15 new cities, including 10 for cable TV services. But in a capital scarce scenario, we will go to six more cities in the first phase. For cable service, we will be adding 2-3 cities to our existing operations in Mumbai, Bangalore and Vizag. After that, we will rework on our fund requirement.

    So you plan to stay as a niche player in the market for at least two years?
    We have seen how some MSOs have been pursuing a high-growth subscriber universe by recklessly acquiring cable networks. Having a large universe can become a liability. The capital has dried up for them and there is no change in their business models. It is important to be consistent, strong, stable and profitable.

    We are looking at an optimum size of 4-5 million in the first phase, up from our current reach of two million. You can‘t just focus on the reach universe when there is just a 20 per cent revenue share (due to under-reporting). Our focus will be to penetrate deeper into last mile services.

    But if government announces a policy for HITS (Headend-In-The-Sky), will you scale up?
    When the regulation comes, we will be one of the applicants. We are ready as far as the rest of the infrastructure is concerned. We will partner with Cisco on technology; we already have an existing head-end infrastructure with them. We have also signed an MoU for the transponder. We plan to invest an additional amount of Rs 1.5 billion for HITS.

    Will Tulsi R Tanti and his family members (Suzlon promoters) commit investments for such expansions?
    They currently hold 49 per cent stake in Digital Outsourcing and stand committed. We might also bring in other Indian investors.

    You Telecom acquired a majority stake in Scod18 Networking to have a cable TV presence in Mumbai. What are the expansion plans under this entity?
    Scod18 has been a Mumbai-centric MSO. We will continue to be a significant player with a significant market share in Mumbai. We will expand in areas around Mumbai and in parts of Maharashtra along with them, if and when we get the right opportunities. Our focus will be on digitisation and other value-added services like on-demand and TV-commerce.

    And for Bangalore?
    We acquired a 50 per cent stake in Digital Infotainment, a small-sized local cable network, and our investments in this venture so far has been Rs 500 million (out of a total investment of Rs 5.5 billion). We will expand in Bangalore and other areas in Karnataka through this joint venture.

    Will acquisition be the only growth route for you?
    Yes, that is how we will grow. We are planning to offer stock in lieu of last mile acquisition. This is how Cisco grew from a $2 billion to a $22 billion company – by offering stock. Pragmatic cable companies, after all, have to start a trend. But for this listing is important.

    Having taken the position of a niche player, how important is it for you to launch premium products to drive in higher ARPUs (average revenue per user) as a strategy?
    The market today is not matured for premium products. The content cost is exorbitant and pricing is a big issue. The MSO that could have monetised on value-added services is Hathway Cable & Datacom as it has a million digital subscribers. But as this has not been a focus area for them, there must be compelling reasons for this.

    What will the focus area for MSOs this year?
    MSOs will have to make sure that they have enough capital with them.

  • ‘We plan to raise Rs 5 billion’ : Ravi Mansukhani – Indusind Media & Communications CEO and MD

    ‘We plan to raise Rs 5 billion’ : Ravi Mansukhani – Indusind Media & Communications CEO and MD

    Hinduja-owned IndusInd Media & Communications Ltd (IMCL) has survived the scare from a wave of new multi-system operators (MSOs) that threatened to land grab even in the lucrative market of Mumbai.

    IMCL has expanded its footprint to 27 cities and thrived on a hefty carriage revenue that helped the MSO turn profitable. In FY‘09, carriage made up for almost 50 per cent of IMCL‘s turnover as broadcasters coughed out Rs 1.4 billion to place their channels on the network.

    The media subsidiary company of Hinduja Ventures Ltd plans to list through an initial public offering (IPO). Ahead of that, it is in talks to rope in an investor. The total fund-raising agenda: Rs 5 billion.

    Operating its cable TV distribution business under the Incablenet brand, IMCL has agreed to dilute one per cent stake to Ashley Investments at a valuation of $644 million. As part of this exercise, 0.22 per cent has been diluted.

    The MSO has aggressive plans to grow in the digital environment. IMCL is also gearing up to grow its fledgling broadband business, after upping its primary connections to 200,000 that would give it access to the last mile.

    In an interview with Indiantelevision.com‘s Sibabrata Das, Indusind Media & Communications CEO and MD Ravi Mansukhani talks about the MSO‘s growth plans.

    Excerpts:

    IMCL is planning to take the IPO route. How much are you going to raise?
    We are out in the market, looking to raise money. We may get an investor before we possibly do the IPO. We feel this is the best route to take. But if there is no match on our valuations, we will go on our own. We plan to raise Rs 5 billion to fund acquisitions and our digital cable TV expansion. But we are not in a hurry. We want to list with the right fundamentals and the future for digitisation.

    Why are cable TV companies suddenly rushing to list?
    DEN (Digital Entertainment Networks)a late entrant, is planning an IPO this year. There are media reports also about Hathway Cable & Datacom readying to tap the market. Wire & Wireless India Ltd (WWIL) is in the process of raising money through a rights issue. The fact is that cable TV companies are looking at expansion as they feel there is a huge potential left open. Unfortunately, DTH has not been able to fight analogue cable because of the pricing. And with digital cable growing slowly, DTH has not grown to everybody‘s expectations.

    But is it not true that all the DTH operators are mopping up subscribers very aggressively?
    DTH is growing either in cable dark or bad cable areas. In urban India, they have made penetration in mostly multiple TV homes and, thus, co-existed with cable. A very small percentage has come at the expense of the cable TV operators, perhaps because the ARPUs (average revenue per user) are low.

    A wave of new MSOs have entered the market. How has this affected Incablenet?
    In the urban areas, this led to ground warfare as the entrants wanted to grab territory. Subscription rates, undoubtedly, got affected as we had to retain our base. This was particularly felt in case of franchisee fees. But we held on – and are slowly getting back the old rates.

    We have actually grown in revenues as we expanded through acquisitions. We are present in 27 cities, up from 12 a couple of years back. We have laid more infrastructure and have over 6000 km of hybrid fibre network. We have posted a 45 per cent growth year-on-year over the last two years. We have also turned around and become profitable.

    Wasn‘t this largely because of the steep growth in carriage fee which accounted for almost 50 per cent of IMCL‘s FY‘09 revenues?
    Yes, the placement charges helped to a large extent for IMCL turning profitable. But we are no more stuck as just a cable MSO. Though video is the mainstay of our business, we have laid infrastructure and will now aggressively push for broadband.
    ‘This is a good time to make acquisitions as the cost per point has come down. In prime locations, valuations have fallen by a quarter and in other areas by almost 50%‘

    The company has been talking about broadband for the last few years but very little has happened. The revenue from broadband for FY‘09, in fact, was under Rs 50 million. So what changes this time?

    The three bottlenecks that hindered our broadband growth are now behind us. Bandwidth costs have fallen. Secondly, we have merged the broadband company with the cable outfit, so that saves us from paying out any network charges. The third and the most important fact is that we have grown our primary points from 50,000 to 200,000 and, as we own the last mile here, we don‘t have to pay commissions to franchisee operators. We are targeting to double our revenues from broadband this year. We will also get into commercial clients as it will give us higher ARPUs. In the retail segment, our ARPU stands at Rs 400

    Was there a conscious decision to acquire more of primary points?

    When we went in for acquisitions, we ensured that we got into good ARPU areas. We also took care that we acquired 30 per cent of primary connections from the cable networks that we snapped up.

    Were you driven to new geographies because of the carriage market and also because of a land grab situation from new competition?

    The older MSOs like us expanded into new cities because of the promise of digitisation which would lead to transparency and ensure that we carve out a commission system for ourselves. The new MSOs came under the plank of carriage fees. Undoubtedly, placement charges helped all MSOs to survive and grow – including the digital business.

    The economic slowdown is hurting broadcasters and they are pulling down their carriage costs. How is this going to affect IMCL‘s growth this year?

    Carriage revenue will not dip but flatten for us this year. There are new channel launches but they are not of that scale as last year‘s. This will be a consolidation year for us.

    How much is IMCL investing this year?

    We had invested Rs 1 billion in FY‘09, equally split between acquisition, digitisation and laying of infrastructure. For this fiscal, we plan to invest a similar amount. We will add two digital headends to our existing eight. We will also supply digital feed to four more cities during the fiscal, in addition to the four that we have currently linked up.

    We have so far seeded 350,000 digital set-top boxes (STBs) across eight cities. We haven‘t got fresh STBs this fiscal as the government has imposed duty on the import of boxes. But we have placed orders and expect supplies to arrive in November. Our target is to add 150,000-200,000 boxes during the fiscal. The Commonwealth Games in Delhi also could act as a big boost if the government comes out with a digitisation policy to coincide with that event.

    Will you be aggressive on acquisitions this year?

    We will continue to make acquisitions where we see an opportunity being thrown on us at the right value. This is a good time to buy as the cost per point has come down. In prime locations, valuations have fallen by a quarter and in other areas by almost 50 per cent. Operators need the support of bigger MSOs because of the huge subsidy in digital boxes. We will consolidate in states where we are already present.

    And there will be more disturbance on the ground?

    Warfare for territory will reduce as the new MSOs will not be that aggressive. Money is drying up and they are back in the market trying to raise funds.

    Is there a drive to restructure the content business under associate company Planet E-Shop Holdings India Ltd?

    The movie business is moving into Planet E-Shop. This is also housing the distribution of channels for retail and commercial. We are distributing ESPN in Mumbai and are in talks with two other major broadcasters. We have also taken up marketing and distribution of foreign channels like Arirang and Miracle Channel that seek downlinking in India. We are looking at signing up three more foreign channels this year.

    Will the cable movie channel, CVO, move into this company?

    The channel is part of IMCL and there are no plans as of now to shift this out. We may make it a pay channel down the road as the digital environment grows. We have bought 100 movies this year and are planning to add 300-400 more as prices have fallen. The revenues are getting squeezed for cable movie channels. But we have a library of 700 movies and later may create thematic channels for digital subscribers.

    What plans do you have to grow the content side of the business?

    We will create server-based local channels when the time is ripe. Cable news channels in metros may not be viable as it makes more sense to get placement fees than run your own channel in a choked analogue environment. The situation can be different in smaller towns. Our interest is to create these server-based local channels that do not depend on advertising but pay revenues.

    Will the cable movie channel, CVO, move into this company?
    The channel is part of IMCL and there are no plans as of now to shift this out. We may make it a pay channel down the road as the digital environment grows. We have bought 100 movies this year and are planning to add 300-400 more as prices have fallen. The revenues are getting squeezed for cable movie channels. But we have a library of 700 movies and later may create thematic channels for digital subscribers.

    What plans do you have to grow the content side of the business?
    We will create server-based local channels when the time is ripe. Cable news channels in metros may not be viable as it makes more sense to get placement fees than run your own channel in a choked analogue environment. The situation can be different in smaller towns. Our interest is to create these server-based local channels that do not depend on advertising but pay revenues.