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Tag: Dish TV

  • Lower deferred tax asset & demonetisation lower Dish TV numbers

    BENGALURU: The largest DTH operator in India in terms of subscriber numbers – Dish TV Limited (Dish TV) reported less than one-sixth profit after tax (PAT) for the year ended 31 March 2017 (FY-17, current year) as compared to the previous year. The company reported PAT of Rs 1,092.8 million for FY-17 as compared to PAT of Rs 6,924.2 million in fiscal 2016. Dish TV has shown deferred tax asset for FY-17 at Rs 740.3 million as compared to Rs 4,360 million in FY-17. The company’s assets and liabilities statement for FY-17 shows deferred tax asset of Rs 5,100.3 million – the sum of the deferred tax asset for both years.

    In its earnings release, Dish TV says that demonetisation outdid a good monsoon as well as thriving economic conditions of the last year. Consumer spending remained a challenge from the latter half to the fourth quarter. The initial growth momentum that could have catapulted the DTH industry to the next level in terms of subscriber additions, took a temporary but prolonged hit. The DTH industry slightly de-grew in terms of new acquisitions during the fiscal despite coming closer to the implementation of digitisation. Dish TV saw subscribers conserving cash for bigger necessities right from the time demonetisation was announced in November up to the end of the fiscal.

    Dish TV managing director Jawahar Goel said, “Fiscal 2017 threw up unprecedented challenges but the Dish TV team took things in its stride. We minimized the impact of demonetisation while focusing on a long-term advantage in the form of recharges through online modes. Despite the odds, Dish TV managed to increase its reach and subscriber base.”

    The company reported 1,029 thousand net subscriber additions during the year to take its subscriber base to 15.5 million.

    Dish TV reported operating revenues of Rs. 30,144 million in FY-17, up 4.2 percent as compared to Rs 28,941 million in the previous year. Subscription revenues of Rs. 27,696 million in the current year were 4.1 per higher than the Rs 26,617 million in the previous year.

    Dish TV EBITDA declined 5.1 percent in the current year to Rs. 9,728 million (margin at 32.3 percent) from Rs 10,249 million (38.5 percent margin) in FY-16.

    Dish TV’s total expenditure in FY-17 increased 9.2 percent to Rs 20,415 million from Rs  18,692 million in the previous year. Cost of goods and services in fiscal 2017 increased 9.5 percent to Rs 14,371 million from Rs `13,122 million in FY-16. Employee Benefit Expense in FY-17 increased 9.5 percent to Rs 1,465 million from Rs 1,229 million. Sales & Distribution Expenses increased 9.6 percent in FY-17 to Rs 3,108 million from Rs 2,836 million in the previous year. Other expenses declined 2.3 percent to Rs 1,470 million from Rs 1,505 million. Finance costs increased 7.3 percent in FY-17 to Rs 2,239 million from Rs 2,087 million.

    Company speak:

    Goel, said, “Revenue growth in the current fiscal is largely going to be a function of subscriber additions and Phase 4 of digitisation should have a material role to play in that. The proposed amalgamation (with Videocon d2h) will further help create scale in the highly-fragmented TV distribution landscape in India while creating significant synergies through the combination.”

    On technological developments, Goel, revealed, “We understand that digital will be an important part of our growth in the future and we are excited about our portfolio of products lined up for launch in the coming quarters. Dish TV’s new HTML 5 based middleware with a card less box and a new chip set is already in advanced stages of testing and would hit the market soon.”

    DTH services will be subject to 18 percent GST rate as soon as the new indirect tax regime is implemented in the country. On the new GST regime, Goel said, “What should be significant in addition to our ability to pass on the uniform tax to subscribers would be the ease of doing day-to-day business and the associated savings in administration, litigation as well as compliance costs that should result from a simpler tax regime. Unlike the current Entertainment Tax and VAT regime, where different rules are used to determine tax in different regions, GST would be a single tax that should be practical and convenient to pass-on to the consumer.”

  • Dish TV India ropes in marketing heavyweight Anil Dua as group CEO

    MUMBAI: There’s change at the top at Dish TV India. The DTH firm late last night announced (to the Bombay stock exchange) the appointment of FMCG and consumer durable marketing veteran Anil Dua as its group CEO. He will be replacing current CEO Arun Kapoor who was leading the company for the past 18 months.

    Dish TV said it was bringing in Dua as another leading DTH player Videocon d2h is undergoing an amalgamation with it, which would create a gigantic cable and satellite distribution platform with around 28.1 million subs (as of December 2016). Dua is expected to work closely with Dish TV CMD Jawahar Goel and lead the future merged entity. He carries with him a stellar track record as an astute brand builder, marketer, with a sharp focus on customer experience and supply chain and strategy working with companies such as Hero Motorcorp, Unilever, and Gillette. His specialty has been transformation and building brands of scale.

    During his earlier eight year stint with Hero Motorcorp during which he looked after its advertising, marketing and sales and distribution network, Dua more than trebled the company’s turnover and market cap. Dua also worked at Hindustan Uniiever and helped streamline its foods distribution pipeline. His last outing was as managing director of the diversified Middle east group OTE.

    “We welcome Anil and are confident that his experience will further add to our capability and will help lead the company on a faster growth path,” said Goel in a press release. “His experience in brand building and distribution will add immense value to our organization.”

    Dua on his part is quoted in the release as stating that he was excited with the action in the DTH space and with the opportunity that has been given to him. “I look forwarding to leveraging my experience and working together with the DishTV team in realising their lofty vision,” he said.

    Kapoor, meanwhile, is going to be with Dish TV until the completion of the merger, following which he is expected to go back to teaching MBA students apart from venturing into social work. The proposed merger recently got the Competition Commission of India’s nod for it and the companies are following the process of getting the go ahead from to the National Company Law Tribunal.

  • Big Magic to air horror show ‘Cheekh..Ek Khaufnak Sach’

    MUMBAI: BIG Magic in providing innovative and appealing content to its viewers. After launching shows in historical, mythological and kids’ fantasy domain, the channel is taking a step forward in its offering to the viewers by adding the horror genre, with an objective to take the value of the brand a notch higher. With an aim to provide high voltage drama every week, the channel is all geared up to entertain its viewers with the upcoming show, ‘Cheekh..Ek Khaufnak Sach’. The show is slated to air from 15th May 2017, every Monday to Friday at 9 PM on BIG Magic.

    With the viewers widening their horizon of entertainment in distinctive genres, Big Magic is providing its viewers a renewed experience by adding a new element to its array of unique shows. Produced by Homi Wadia under the banner Tele Buddies, Cheekh… Ek Khaufnak Sach will showcaseunheard and unseen form of fear through objects. The unique horror show will be on the lines of dark shadows and whistling winds holding secrets to the untold stories that have never been shown on television before. Raising the thriller quotient for the viewers, each story will be narrated in two parts leading the spectators through some of the most surreal, supernatural and paranormal experiences.

    The show’s promotion will be driven by a 360-degree marketing approach to reach out to the target markets through its various campaigns across TV, radio, on-ground and digital platforms.

    Commenting on the launch of the new show, BIG Magic spokesperson said, “We at Big Magic are constantly looking forward at delivering new content in different genres, catering to the viewer’s dynamic needs. We look forward to the launch of our new offering, ‘Cheekh.. Ek Khaufnak Sach’ that will escalate the thrill factor amongst our viewers, whilst continuing to bolster the value we bring to the table, for our stakeholders and consumers.”

    Big Magic is available across all DTH platforms such as Tata Sky, Airtel, Videocon, Dish TV, Reliance Digital TV along with all cable operators including Hathway, DD Free Dish, Incable, Digicable, DEN, 7 Star, ABS, Siticable, Star Broadband and GTPL among others.

  • Could India blocking ABS’ FTA TV signals lead to breach of ITU norms?

    MUMBAI: Government of India, it seems, could find itself in a Catch-22 situation over a directive to Department of Space (DoS) to block free-to-air channels available in India broadcast through Asia Broadcast Satellite (ABS)-2, a foreign `bird’ not licensed to provide KU-band or DTH services in India. Reason: such a blockade may breach international laws relating to spillover of satellite signals.

    Signals of ABS-2 satellite —hosting on its South Asian beam a Nepalese and a Bangladeshi DTH service licensed in their respective countries — have been spilling over into India and a mix of Indian, Nepalese and Bangladeshi TV channels are available to Indians as a FTA service that can be accessed via some plain vanilla hardware (read set-top boxes and an antennae) at a nominal cost. This has raised the heckles of India authorities over possible national security.

    While last week junior minister for Ministry of Information and Broadcasting (MIB) Rajyavardhan Rathore informed Parliament that his ministry has requested DoS to block the “unauthorized” DTH or KU-band ABS-2 service, the foreign satellite operator feels it has not broken any Indian regulations.

    ABS source claimed that the issue is of “natural spillover” of satellite signals into neighboring countries that are outside the service area of the countries offering licensed DTH services, but falling within the coverage area of the satellite. Such issues have been debated by the International Telecommunications Union (ITU) where it was concluded that such a spillover or overlap of coverage areas (countries) is in “full compliance” with ITU provisions. “Consequently, ABS is not in violation of any existing provisions/guidelines stipulated by the government of India,” a company source explained.

    ITU is the United Nations specialized agency for information and communication technologies or ICTs. It allocates global radio spectrum and satellite orbits, develops technical standards that ensure networks and technologies to seamlessly interconnect and strives to improve access to ICTs to underserved communities worldwide. Originally founded in 1865 as the International Telegraph Union, ITU is one of the oldest existing international organizations. India is also a member of the organization and Indian satellites’ slots too are co-ordinated by ITU.

    Categorically denying that the company has “been providing” a DTH service in India, ABS sources said ABS-2 satellite has two customers on its South Asian beam. The customers are Bangladeshi DTH service provider marketing under brand name Realvu and Nepalese Humro TV platform. Both these services are licensed in their respective countries, the sources claimed, adding there was a “natural spillover” of these services into India that is being lapped up by Indian viewers as it has a mix of regional content in an un-encrypted format.

    ABS also clarified that it does not sell any hardware in India, nor does it advertise or provide any service to the Indian TV channels within the country. The ABS series of satellites are owned by the Bermuda-based Asia Broadcast Satellite, a comparatively young global satellite operator with offices in the United States, UAE, South Africa, Philippines, Indonesia and Hong Kong.

    Of course, this ABS-2 service is available to Indian consumers at no monthly charge and all they need to do is install a standard STB, easily available in the open electronics hardware market, which also means that the TV channels on the platform stand to gain from additional eyeballs that can be used for marketing purposes by the TV channels.

    According to an estimate, presently there are approximately 20 satellites broadcasting over the Indian skies beaming channels into India and viewers wanting to watch those channels can watch via an ordinary STB and pointing the antenna to the desired satellite’s geo-stationary location. Though this synchronization of antennae with a specific satellite’s position may be technical in nature, there would be hordes of service providers in India with adequate knowledge to do so for a small price.

    Free to view platforms have an advantage over paid DTH services like Dish TV or Tata Sky or Videocon d2h or Reliance BIG TV in the rural areas of the country where consumers may not be too quality conscious. This FTA phenomenon is evident from the considerable reach of pubcaster Doordarshan’s KU-band or FTA DTH service, FreeDish, and a clamour amongst private TV channels too to be on the platform that has a limited shelf capacity.

    Rathore, while responding to queries from three Members of Parliament last week, had said the move to block ABS-2 signals was being done keeping in view any threat to national security via a service not licensed in India. He said MIB was the licensing authority for DTH services in India and it had not received any application or reference from ABS regarding ABS-2 services. However, the minister also admitted that there was no violation of downlinking guidelines by licensed Indian channels on the ABS-2 platform.

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  • Active DTH subscriber growth subdued in Oct-Dec’16 quarter

    BENGALURU: Telecom Regulatory Authority of India (TRAI) numbers for the quarter ended 31 December 2016 (current quarter, Q3-17) reveal that active DTH subscriber growth in India was lowest since the quarter ended June 2015 (Q2-16) at just 1.2 percent or just 7.5 lakh (0.75 million). In the previous quarter the platform had added 14 lakh (1.4 million) active DTH subscribers and 25.5 lakh active DTH subscribers in Q1-17.

    TRAI reports revealed that the active subscriber base in the country grew to 626.5 lakh (62.65 million) in Q3-17 from 619 lakh (61.9 million) in the immediate trailing quarter (Q2-17). Further, the industry has witnessed a higher growth of registered subscribers at 3 percent as compared to active subscribers in Q2-17 which was at 2.9 percent. In Q2-17 TRAI had reported 941.6 lakh or 94.16 million registered subscribers, which grew to 970.05 crore or 97.005 million in the current quarter.It may be noted that TRAI has been reporting the net active subscriber base including temporarily suspended subscribers that have been inactive for not more than 120 days since Q3-16 (quarter ended 31 December 2015).

    Of the six private players in the Indian DTH ecosystem, three are publically listed and their numbers are available in the public domain – They are in alphabetical order: Airtel Digital TV Services or Airtel DTH which is a small segment/division of Indian telecom major Bharti Airtel Limited; Dish TV, the largest DTH player in the country in terms of number of subscribers; and Videocon d2h.
    public://F1_3.jpg
    Airtel DTH, Dish TV and Videocon d2h have about two thirds (65 percent) of market share of the DTH universe by private players in India. Of the other three players, according to a TRAI report TataSky has a market share of 23 percent, while Sun Direct and Reliance have a market share or 10 percent and 2 percent respectively. It may be noted that at present probably the largest DTH player in India could be the government’s FreeDish, but since it is a free service, no subscriber data is available even with PrasarBharati. Please refer to the chart below:
    public://F2_2.jpg
    For Q3-17, the subscriber growth of the three major players – Airtel DTH, Dish TV and Videocon d2h was more than the industry growth– their combined subscriber base grew 1.6 percent quarter-over-quarter (q-o-q) by 6.33 lakh (0.633 million) to 406.58 lakh (40.658 million) from 400.25 lakh (40.025 million) in the immediate trailing quarter. This means that the major contribution to growth of overall active subscribers – 84.4 percent was by these three players.

    Among the three, Videocon d2h had the highest growth at 2 percent – its subscriber base grew 2.5 lakh (0.25 million) from 125.2 lakh (12.52 million) in Q2-17 to 127.7 lakh (12.77 million) in Q3-17. Airtel DTH subscriber base grew by 1.83 lakh (0.183 million) or 1.5 percent quarter-on-quarter (q-o-q) in Q3-17 to 125.88 lakh (12.588 million) from 124.05 lakh (12.405 million) in Q2-17. Dish TV, the largest private DTH player subscriber base grew by 2 lakh (0.2 million) or 1.3 percent q-o-q to 153 lakh (15.3 million) from 151 lakh (15.1 million).

    Let us see how these three players performed in Q3-17

    Airtel DTH

    Airtel’s Digital TV Services segment (DTH segment) reported 17.7 percent year-on-year (y-o-y) increase in operating revenues for the quarter ended 31 December 2016 (Q3-17, current quarter). Also, Operating Profit (Earnings Before interest and Tax – EBIT) of the DTH segment in the current quarter increased 27.1 percent year-over-year (y-o-y).
    Airtel DTH reported revenues of Rs 873.5 crore in Q3-17 and Rs 742.2 crore in Q3-16. EBIT for the corresponding periods was Rs 68.4 crore (7.8 percent margin of the segment’s operating revenue) and Rs 53.8 crore (7.2 percent margin of the segment’s operating revenue) respectively.
    EBIDTA in Q3-17 also increased y-o-y – by 22.3 percent to Rs 302.6 crore (34.6 percent margin of the segment’s operating revenue) in the current quarter from Rs 247.4 crore (33.3 percent margin of the segment’s operating revenue).
    Airtel’s DTH segment added 14.82 lakh subscribers between Q3-16 and Q3-17, or a 17.3 percent y-o-y increase. It had 125.88 lakh subscribers as on 31 December 2016. Q-o-q, the segment witnessed a 1.5 percent growth (1.83 lakh adds) in subscribers from 124.05 lakh in Q2-17.
    ARPU in Q3-17 increased to Rs 232 from Rs 229 in the corresponding year ago quarter, but remained flat q-o-q as compared to the immediate trailing quarter.

    Dish TV

    Subscription revenue in the current quarter increased 3.3 percent y-o-y to Rs 692.10 crore from Rs 669.90 crore. TIO declined 3 percent to Rs 747.98 crore from Rs 771.48 crore.

    Profit after tax (PAT) declined to almost a third (declined 61.0 Percent) y-o-y to Rs 26.68 crore (3.6 percent margin – of TIO) in Q3-17 from Rs 68.49 crore (8.9 percent margin) in Q3-16. EBIDTA in the current quarter declined 6 percent y-o-y to Rs 249.51 crore (33.4 percent margin) from Rs 265.45 crore (34.4 percent margin).

    Videocon d2h

    Videocon d2h computed subscription and activation revenue in the current quarter wasRs711.2 crore as compared to Rs 710.7 crore in the immediate trailing quarter.

    Continuing the trend is has set in the previous two quarters, Videocon d2h reported a profit after tax (PAT) for Q3-17. The DTH major reported PAT of Rs 21.77 crore (2.8 percent margin) for the current quarter. It had reported PAT of Rs 6.32 crore (0.8 percent margin) for Q2-17, and Rs 2.66 crore (0.3 percent margin) for Q1-16. For the corresponding year ago quarter (Q3-17), the company had reported a loss of Rs 22.05 crore.Adjusted EBIDTA grew 33.2 percent y-o-y to Rs267 crore (35.4 percent margin) in Q3-17.

    The DTH major also reported 13.3 percent y-o-y growth in net subscriber numbers at 127.7 lakh for Q3-17 as compared to 112.70 lakh and a 2 percent quarter-over-quarter (q-o-q) growth from125.2 lakh. Monthly Average revenue per user (ARPU) in the current quarter came in lower at Rs 205as compared to Rs 209 in the immediate trailing quarter.

    Demonetisation impacts DTH industry

    The Media and Entertainment industry has been hit by the recent demonetisation initiatives, and more so the carriage industry. The largest DTH player in terms on subscribers – Dish TV said in its earnings release Q3-17 that it’s could collect subscription revenue from just 30 percent of its subscribers post the demonetisation date of 8 November 2016. Demonetisation was also mentioned by Videocon d2h in its earnings papers. However, the players stepped forward to do their bit for the government’s demonetisation initiatives.

    Dish TV CMDJawaharGoel said,“Subscribers as well as trade partners were extended temporary credit facilities basis their pasttransactions pattern. Subscriber awareness drives to promote alternate methods of paymentwere run both on the ground and on screen in addition to various other initiatives. Looking at the brighter side of it, demonetisation does promise an eventual less-cash dependentpopulation that should use online payment interfaces over cash for DTH recharges. That’s goingto be a boon for the DTH business.”

    Goel is optimistic about the future. He said, “Though demonetisation has led to an initial distress, it also will result in certain structuralchanges that are going to benefit the economy in the long run. As far as our business isconcerned, the effect has already started coming in. As online payment transactions, creditcards and a less-cash society become buzz words today, we are happy to note an increase in ouronline transacting subscriber base from 30 percent to around 38 percent with around 22 digital wallets and thelike being integrated with the company. Every online recharge transaction vis-à-vis EPRS basedtransaction implies savings on recharge commissions paid by us.”

     

  • AION Capital to acquire majority interest in PlanetCast Media Services

    NEW DELHI: AION Capital Partners Limited (the “AION Fund”) is to acquire a majority interest in PlanetCast Media Services Limited (earlier known as Essel Shyam Communications Limited) from shareholders including affiliates of the Essel Group, the Shyam Group and private equity firm Kubera Partners.

    However, the full terms of the transaction were not disclosed. This represents the second transaction affiliates of Apollo Global Management, LLC have done with the Essel Group, having invested $100 million into DishTV in 2009, having successfully exited that investment in 2015.

    The AION Fund is an India-focused fund established by an affiliate of Apollo together with ICICI Venture Funds Management Company Limited. With approximately US$825 million in committed capital, AION Fund is currently one of the largest private equity funds in India.

    Founded in 1996, PlanetCast is a professionally managed, market-leading provider of technology-led managed services to the broadcasting industry in India and neighbouring countries, with a rapidly growing footprint across Southeast Asia.

    PlanetCast provides comprehensive, customized solutions across content management operations (including storage, enrichment and automated play-out) and distribution (including satellite broadcasting, digital streaming and cloud distribution). Following the acquisition by the AION Fund, PlanetCast will continue to be led by the current management team.

    “We are excited for the AION Fund to acquire PlanetCast” said AION Fund partner Utsav Baijal. “We believe PlanetCast is a market leading franchise that delivers best-in-class digital media solutions to its customers. We look forward to working with PlanetCast’s talented and dedicated team to continue the business’s strong heritage of innovation and customer satisfaction”

    “We are pleased to have sponsored PlanetCast during this period of significant growth and transformation. PlanetCast’s foundation as a leader in the broadcasting services industry, position the company well for its new ownership under the AION Fund,” PlanetCast promoter Jawahar Goel said.

    PlanetCast Executive Director M N Vyas said, “We are grateful to our existing shareholders for all the support and guidance to date and look forward to our relationship with the AION Fund”.

    Executive Director Lalit Jain added that “We believe that under the new leadership, PlanetCast can build on its industry leadership position and invest in emerging technologies to become the leading service provider to both the traditional and digital media economy”.

  • Dish TV Videocon Ltd. may start operations in Sept ’17

    MUMBAI: With no roadblocks apprehended and approvals going ahead, the new merged direct-to-home (DTH) behemoth may start operations in September 2017. As reported by www.indiantelevision.com earlier, the new merged entity Dish TV Videocon Ltd. is set to create the single-largest DTH company in India.

    The proposed transaction remained subject to approvals, including from the Securities and Exchange Board of India, the stock exchanges, shareholders and creditors of both companies, the Competition Commission of India, the High Court of Bombay and the Ministry of Information and Broadcasting. The proposed transaction was expected to close in the second half of 2017.

    Dish TV CMD Jawahar Goel has told Express that September was the tentative date for starting joint operations. Although, he said, August was doable, but they were sure to begin operations around September. Sources in Videocon d2h have also confirmed the launch’s anticipated timeline.

    As reported by www.indiantelevision.com, CCI recently sought TRAI’s views on the proposed merger of Dish TV and Videocon d2h and as to whether or not the deal, leading to formation of Dish TV Videocon Ltd., will violate anti-trust laws.

    Dish TV, owned by Zee Entertainment (ZEEL) and the DTH arm of Videocon Industries had in November last year announced their merger. Dish TV, as per the proposed terms, will own 55 per cent in the new entity, according to Livemint. A TRAI official confirmed that CCI has sought its views on the subject.

    Goel had said that “the arrangement of the scheme is merger and we never envisaged a buyout.” The Board of directors of the two giants had earlier approved a scheme of arrangement for the amalgamation of Vd2h into Dish TV and the execution of definitive agreements in relation to such amalgamation.

    Pursuant to the Scheme, it was earlier reported, Dish TV Videocon shall issue 857.791 million shares as consideration for the scheme and the Vd2h shareholders shall be allotted 2.021 new shares of Dish TV Videocon for every one share held in Vd2h (subject to certain adjustments as set out in the Scheme), which would result in Dish TV shareholders owning 1,066.861 million existing shares or 55.4% of Dish TV Videocon, and Vd2h shareholders owning 857.791 million new shares or 44.6% of Dish TV Videocon.

    The fully diluted share count of Dish TV at 1,066,863,665 shares, which will lead to 857,785,766 shares of Dish TV Videocon being issued to Vd2h shareholders. Exchange ratio rounded off to two decimal places. One Vd2h ADS represents four equity shares of Vd2h.

    The proposed transaction was expected to create a leading cable and satellite distribution platform in India. Dish TV Videocon would serve 27.6 million net subscribers in India, as of September 30, 2016, on a pro-forma basis, out of a total of 175 million TV households in India highlighting significant room for growth. The combined entity would have revenue of Rs. 59,158 million and EBITDA of Rs. 18,262 million on a pro-forma basis for the fiscal year ended 31 March 2016 positioning it as a leading media company in India. The proposed transaction is expected to provide better synergies and growth opportunities and enable Dish TV Videocon to provide differentiated and superior service to all customers through deeper after-sales, distribution and technology capabilities, and also become a more effective partner for TV content providers in India.

  • Dish TV, Videocon d2h merger: CCI seeks TRAI views

    MUMBAI: CCI has sought TRAI’s views on the proposed merger of Dish TV and Videocon d2h and as to whether or not the deal, leading to formation of Dish TV Videocon Ltd., will violate anti-trust laws.

    Dish TV, owned by Zee Entertainment (ZEEL) and the DTH arm of Videocon Industries had in November last year announced their merger. Dish TV, as per the proposed terms, will own 55 per cent in the new entity, according to Livemint.

    A TRAI official confirmed that CCI has sought its views on the subject.

    Dish TV India managing director Jawahar Goel had said that “the arrangement of the scheme is merger and we never envisaged a buyout.” The Board of directors of the two giants had earlier approved a scheme of arrangement for the amalgamation of Vd2h into Dish TV and the execution of definitive agreements in relation to such amalgamation.

    Pursuant to the Scheme, it was earlier reported, Dish TV Videocon shall issue 857.791 million shares as consideration for the scheme and the Vd2h shareholders shall be allotted 2.021 new shares of Dish TV Videocon for every one share held in Vd2h (subject to certain adjustments as set out in the Scheme), which would result in Dish TV shareholders owning 1,066.861 million existing shares or 55.4% of Dish TV Videocon, and Vd2h shareholders owning 857.791 million new shares or 44.6% of Dish TV Videocon.

    The fully diluted share count of Dish TV at 1,066,863,665 shares, which will lead to 857,785,766 shares of Dish TV Videocon being issued to Vd2h shareholders. Exchange ratio rounded off to two decimal places. One Vd2h ADS represents four equity shares of Vd2h.

    The proposed transaction was expected to create a leading cable and satellite distribution platform in India. Dish TV Videocon would serve 27.6 million net subscribers in India, as of September 30, 2016, on a pro-forma basis, out of a total of 175 million TV households in India highlighting significant room for growth. The combined entity would have revenue of Rs. 59,158 million and EBITDA of Rs. 18,262 million on a pro-forma basis for the fiscal year ended 31 March 2016 positioning it as a leading media company in India. The proposed transaction is expected to provide better synergies and growth opportunities and enable Dish TV Videocon to provide differentiated and superior service to all customers through deeper after-sales, distribution and technology capabilities, and also become a more effective partner for TV content providers in India.

    The proposed transaction remained subject to approvals, including from the Securities and Exchange Board of India, the stock exchanges, shareholders and creditors of both companies, the Competition Commission of India, the High Court of Bombay and the Ministry of Information and Broadcasting. The proposed transaction is expected to close in the second half of 2017.

  • What the Netflix, Vodafone, Videocon d2h and Airtel tieups mean

    MUMBAI: It clearly is looking at spreading its net far and wide, at least on the availability front. Global video on demand service Netflix has announced the signing of partnerships with three of India’s leading players in the DTH and mobile telephony space: Airtel, Videocon d2h and Vodafone.  

    CEO Reed Hastings was in Delhi yesterday and is expected to be in Mumbai over the next few days to probably make a few more announcements.  Said Hastings at the conference: “India is one of the top 3 markets for Netflix in terms of mobile usage. We’ve had strong growth here; it’s stronger than all of the other Asian nations. It’s a larger market. In terms of investments, we are investing heavily into content. The watch time of our shows has gone up significantly since the launch of Jio.”

    He added: “India is one of the most important and vibrant countries in the world, and we are delighted to be teaming up with three of its leading companies to make it much easier for consumers to enjoy Netflix. In the months and years to come, we look forward to bringing our Indian members more compelling stories from all over the world, and ever-improving viewing experience, and incredible joy.”

    Details of the Videocon d2h tieup were made available through a press release yesterday. It said that Videocon d2h consumers will be able to enjoy Netflix on a large screen by simply clicking a dedicated Netflix button on the remote control of HD Smart Connect set top box (STB).

     Netflix will be available through a dedicated app available on the connected Set top box, HD SMART STB  which converts any existing TV into a Smart TV besides showing more than 600 channels and services in high definition and standard definition. The HD Smart Connect set top box allows viewing in SD and HD, using the satellite feed like any other Videocon d2h set top box. It can be connected to the Internet through any Wifi or Ethernet connection in the home for accessing a curated set of applications available through the Internet. The minimum Internet speed needed is 2 Mbps. These apps, both free and paid cover a range of content genres and utility apps. By connecting the HD Smart Connect STB to any TV, the TV would become smart.

    The Airtel partnership is expected to be in the same vein. Hastings told journalists that “we are focussed on the set top box with them so that the device attached to the television has Netflix on it, so they can stream directly to the television. In case of Vodafone, it is a mobile partnership wherein payment for Netflix will be integrated via mobile billing or through pre-paid schemes.

    With more than 94 million members (read subscribers) worldwide, the tieups will give Netlflix access to  humungous potential audience numbers.

    Says a media observer: “It’s a master stroke of sorts.  Depending on whether the Airtel DTH partnership extends to the mobile parent;  whether the partnership with Videocon d2h extends to Dish TV when they merge, and to Idea when it partners with Vodafone, the potential member base could extend the Netflix service to around 500-600 million potential viewers. And around 300 million smart phone and DTH viewers. Clearly Netflix means business in India.”

    The media observer who was unwilling to be quoted stated that what Netflix will have to look at pricing in India if it wants to become a mass brand.

    “We will get to know over time whether it is playing the volume game or the premium niche game. Currently it is the latter. Rs 550 to Rs 700 per month is limiting its subscriber base. But the advantage of Netflix’s higher pricing is that it can share more with its partners on the other hand, apart from the data consumption revenue that will accrue to the telco,” she said. “Our estimates are that its paid subscriber base in India is sub-500,000. All the other players are priced much lower and are yet to take off. Even Hotstar is struggling despite having a great content offering. And Amazon is almost giving away its content for free with its 499 per year package. Netflix will  have to decide which route it is taking.”

    Hastings acknowledged this to the media saying that Netflix  could come up with other payment plans – like a weeky one or daily, keeping in mind the purchasing power in India. But the current model is working well with the top 10 per cent, he disclosed. ” Our main focus is on adding more content. What we really want to be is a content solution, where you can get almost all you want to view in one place on Netflix.”

    Media observers expect other announcements soon – possibly a partnership with Jio? An office is likely to be set up in Mumbai by 2018. Hastings is slated to meet some production biggies in Mumbai in the coming days apart from following up on the progress of Sacred Games Phanton Films is producing for it.

    Watch this space!

    (Updated on 7 March at 1:15 pm)

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    Videocon d2h partners Netflix for HD Smart Connect

  • TRAI tariff order’s impact on the industry

    MUMBAI: How will Trai’s Telecommunication (Broadcasting and Cable) Services (Eight) (Addressable systems) Tariff Order, 2017, impact the industry and listed television eco-system companies?

    Leading institutional broker Kotak Institutional Equities (KIE) believes that the implementation of would enhance the bargaining power of distributors versus broadcasters, at the margin. KIE contends that while it is difficult to factor in all permutations and combinations and quantify the impact, Dish TV would most likely benefit. The impact on Zee would be negligible, if any, given the strength of its bouquet. Sun could potentially gain, but its upside is contingent on digitization in TN.

    KIE believes that flexibility to consumers will not reduce industry’s subscription revenue pool because there is a provision of access fee of up to Rs 130/month (excluding taxes). It says that even if a household subscribes for 10 popular pay channels on a-la-carte basis, it may result in subscription fee of more than Rs 100 (excluding taxes). It is unlikely that value subscribers (base pack/ low-ARPU subscribers) would be able to optimize subscription spends. If at all, they may receive less content for the same price going forward. However, there is room for premium subscribers (HD, multiple TVs) paying more than Rs 500/month per STB to optimize its subscription spends especially in case of nuclear families in urban markets..

    “We expect distributors to price and package channels such that consumers continue to find bouquet appealing. We also believe industry will not encourage or promote a-la-carte buying: (1) LCOs would likely discourage a-la-carte buying, (2) difficulty/hassle in opting for a-la-carte (through SMSes or call centres) will act as a deterrent,” says a KIE report.

    The regulation could possibly reduce scale led advantages of distributors. The permissible discounts would likely be on penetration milestones (percentage penetration as against absolute scale). Thus, the scale-led advantage of larger distributors can moderate. However, it will be difficult to track and monitor placement and marketing deals which may be used as an avenue to pass on scale-related benefits.

    KIE believes that it is likely that strong players will become stronger and weak players will become weaker. There is a high possibility that low-ARPU subscribers may get less content for the same price whereas premium subscribers may be able to optimize their subscription spends because of uniform pricing across urban markets and rural markets notwithstanding difference in purchasing power.

    Also, standalone channels and small broadcasters may be forced to pay higher carriage to maintain reach (at present DTH garners negligible carriage; post implementation DTH may demand higher carriage). Some channels may not be able to absorb the increase in costs. Small distributors, who do not have wherewithal for technological changes, may find it difficult.

    On upselling and HD push, the KIE paper says, “Access fee under the new regulation would contribute meaningfully to distributors’ revenue stream. Additionally, DTH should also see a sharp increase in carriage revenues. Given this, it has to be seen if the distributor ecosystem remains as focused on upselling and pushing HD. We believe the incentive for them to upsell is lower under the new regulation.”

    KIE is unsure if the regulations would weigh on long-term ARPU growth. Intuitively, more flexibility to choose content can make optimization of subscription budget easier at household level. It contends that barring top channels, price of most pay channels would be negligible and many channels would convert to FTA. Monetisation of niche channels may be difficult at the margin.

    The broking house feels that implementation of regulation would force cable to push package tiering and raise cable tariffs in line with DTH provided that LCOs align with it and broadcasters do not make any payments to cable other than prescribed by the regulation. The time lag between technical implementation of digitization and monetization is 1-2 years. In fact even after 3-4 years, Cable tariffs and MSOs ARPU in phase I-II markets lag expectations.