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Tag: DTH

  • TV Adex likely to grow by 13% in 2022, says ZEEL ad sales chief Ashish Sehgal

    TV Adex likely to grow by 13% in 2022, says ZEEL ad sales chief Ashish Sehgal

    Mumbai: Despite the threat of inflation, which is already hurting the fast-moving consumer goods (FMCG) category, which accounts for around 40 per cent of the television advertising market, Zee Entertainment Enterprises (ZEEL) chief growth officer – ad sales, Ashish Sehgal expects the TV Adex (TV advertising exchange) to grow by 13 per cent in 2022.

    He said that so far this year, due to the declining impact of Covid-19, the growth stood at 10 per cent. However, this was not the case last year due to the pandemic restrictions. He expects local brands, which were absent from the market for the last couple of years because of Covid-19, to make a strong comeback.

    “In January due to Covid-19 the TV Adex went down a bit, but from February the Adex started to grow. Due to the IPL, things have been good since February. Entertainment, cinema and even news have enjoyed a good run. Elections benefit the news industry in the first quarter,” he added. “The TV Adex should have grown by 10 per cent over the previous year so far. By 2022, it should grow by 13 per cent.”
    He proceeds further by adding that inflation is mainly hurting FMCGs. “Even in auto, the activity is growing now. New launches will happen. Telecom is advertising. BFSI has been quite active over the past six months. BFSI may slow down in July and August but in the upcoming festive season it should pick up. When the LIC IPO came, LIC advertised. I see other companies in insurance and banking following suit in terms of the same activity. The new D2C startups are bringing in a lot of money. E-commerce ad spends from the likes of Flipkart and Amazon will only grow in 2022.”

    When asked about startups experiencing funding slowdown and potential impact on ad spending he said that they will shift money from cricket to less expensive avenues like entertainment. “Companies will pump in money into the entertainment category. Earlier, they were putting money into cricket but now they are diverting money into cheaper genres like entertainment. Of course by the time the funding slowdown hit startups the IPL ad deals had already been done. Also, the IPL ratings were down but the deals are signed now. IPL made more revenue than last year.”

    Speaking about the same, he added, “but cricket might get impacted by startups shifting track going forward. These startups are also advertising in print. You have to remember that D2C startups cannot stop advertising otherwise their customer acquisition strategy will get affected. They are looking at cheaper options and are aiming to rationalise their ad spends better.”

    Sehgal feels that the English genre is likely to benefit from the New Tariff Order (NTO) because the ad pie is small. The subscription revenues now are important for them. “As far as music is concerned the genre is benefiting from free-to-air (FTA) viewership. Infotainment is in the same boat as English but it is slightly better off because there is not much content on OTT. So their ad revenue situation is better.”

    According to ZEEL, from his perspective, entertainment accounts for around 65 per cent of revenue, but cinema is also growing. “We have the largest cinema library as well as the largest number of cinema channels. Tentpole properties are very important for the topline. In cinemas, a lot of movie premieres are lined up, which was not the case last year. This will propel ad revenue.”

    Talking about the importance of regional channels, Sehgal said that the major ad revenue growth for ZEEL is happening here, whether it is in the South, Punjabi, Oriya, Bangla or Marathi. “They all are contributing to the growth. They can tap into the local retail brands. Their contribution was subdued for the last two years due to Covid-19. Now, they are back in business and so they are advertising now.”
    Simultaneously, he mentioned the OTT as an addition to TV not eating the TV’s pie. “Today advertisers use the TV for reach and OTT for re-targeting. The AVOD (advertising-based video on demand) consumers are similar viewers to TV. The kind of content being watched on OTT AVOD is the same that airs on TV first.

    Explaining ZEEL’s strategy for ad solutions, he said that the company’s branded solution team has created an Ad funded program. “In some shows, brands get integrated which allows them to be present within the content. In addition, ZEEL helps brands through influencer marketing where characters from shows become influencers for brands. Commercials are created.”

    Sehgal believes the number of pay television channels consolidation will stay the same, as the number of non-premium channels is not growing. The only new channels are in the FTA space. “Everybody has their space. In an unexplored market, a new pay channel might be launched which we did in Punjab two years back, but not otherwise, channels will sustain. FTA will also sustain as the viewership is different. Advertisers use FTA channels as there is no other medium to reach that consumer.”

    He also noted that news will do well as it has a wide reach from pay to FTA. “In metros, event development led people to switch to news channels even on direct-to-home (DTH). News is a unique genre, from metros to rural the audience is available, for advertisers news has separate FTA space. Also, for the upcoming 2024 general elections, the government (in the next four to six months) will start pumping in money. The news genre will certainly fetch the majority of this fund. The state elections are an addition to this genre.”

    “The four big networks including ZEEL adhere to the ad cap guidelines and they do not violate them. For ZEEL it tends to be 12+2,” he concluded.

  • DTH business continues to see headwinds: Airtel CEO Gopal Vittal

    DTH business continues to see headwinds: Airtel CEO Gopal Vittal

    MUMBAI: At Bharti Airtel’s fourth quarter 2022 results CEO Gopal Vittal noted that the DTH business continues to see headwinds.

    During the company’s Q4 FY22 earnings conference call, Vittal said, “While the category continues to see a significant long-term opportunity for upgradation from cable, it’s also a classic case of an industry that has been brought to its knees due to excessive regulation”.  

    “The new tariff order brought about by TRAI a few years ago mandated every miniscule aspect of pricing in an industry which was managed until then very simply through forbearance. This created an overwhelming amount of complexity for the DTH players and even more importantly for the customer with no benefit to any stakeholder”, he further elaborated.

    Vittal added, “The second aspect of skewed regulation is to do with the very same content being made available for free. This is what happens on free-to-air channels and there is, mind you, very good content in many cases here with just windowing or it is being made available on the same screen through a broadband pipe at unregulated prices. This is what happens on OTT platforms. As a result, the DTH industry has been crippled.”

    “We are glad to see that TRAI has just come out with a new consultation paper on tariffs and we hope that at the end of this consultation, regulations will be lightened so that we can focus on what we do best, keep things simple and serve customers,” he added.

    Further, talking about the results he said, “during the year the company added Rs 13,440 crores to the top line and just under Rs 8,150 crores of earnings before interest, taxes, depreciation, and amortization to our India business alone. Beyond these numbers, what was even more satisfying is that we grew competitively in every part of our business; mobility, broadband, DTH and Airtel business grew market share to reach lifetime highs.”

    Vittal also explained the reason behind increasing tariffs. “We challenged ourselves to find a way to expand the reach of our home broadband presence after Covid and cracked an extremely innovative partnership with thousands of local cable operators using our digital promise. We strengthened our portfolio in airtel business through innovations in cPaaS and Airtel Secure. We continue to invest over Rs 20,400 crores into CapEx across our network, data centers, submarine cable capacities, and digital. Finally, we strengthened our partnerships. Use Airtel JV, the investment into level for SD-WAN, which is a software-defined wide-area network, for blockchain, Oracle for data centers, and Google as a strategic equity partner,” he added.

     

  • Stakeholders can send feedback to TRAI’s recommendations on MSO’s platform services by 23 May

    Stakeholders can send feedback to TRAI’s recommendations on MSO’s platform services by 23 May

    MUMBAI: TRAI has announced on Friday that any stakeholder desirous of sending their views/comments/suggestions on the proposed Regulatory Framework for Platform Services offered by MSOs and TRAI’s recommendations can do so through email by 23 May.

    TRAI has clarified that views/comments/suggestions sought are only with respect to Platform Services offered by MSOs.

    In February last year, TRAI had recommended that MSOs be allowed to carry no more than 15 platform channels. Platform channels are channels or services offered by MSOs, local cable operators (LCOs) and DTH operators exclusively to their subscribers as value-added services.

    TRAI had recommended that programmes transmitted by the DTH operators or MSOs or IPTV operators as a platform service shall be exclusive and the same shall not be permitted to be shared directly or indirectly with any other DPO.

    “In case the same programme is found available on the platform service of any other DPO, MIB/TRAI may issue directions to immediately stop the transmission of such a programme. The Ministry of Information and Broadcasting (MIB) also reserves the right for cancellation of registration of such platform service of the DTH operator/MSOs/IPTV operator,” TRAI had said in its recommendations document on 2 February 2021.

    TRAI had first issued recommendations on Regulatory Framework for Platform Services for DTH and MSOs back in 2014.

  • Trai accommodates Prasar Bharati’s concerns on 5G auctions; overlooks private broadcasters

    Trai accommodates Prasar Bharati’s concerns on 5G auctions; overlooks private broadcasters

    Mumbai: Despite several requests from private broadcasters, the Telecom Regulatory Authority of India (Trai) seems to have overlooked their request in the much-awaited recommendation on the 5G spectrum auction released on Monday. The telecom regulator, however, has accommodated Prasar Bharati’s concerns regarding the auctioning of the 526-582 MHz frequency band being used by Doordarshan for providing terrestrial TV broadcasting.

    The private players had requested for an adequate guard band of 100MHz between the 3300-3670 MHz allocated to 5G and 3700-4200 MHz being used by them in accordance with the international telecommunication union (ITU) norms. 

    Trai has instead recommended the department of telecommunication (DoT) to ask the ministry of information and broadcasting (MIB) to take appropriate action and sensitise the MSOs, DTH operators, and other users to ensure the use of high-quality bandpass filters operating in 3700-4200 MHz range to avoid interference from IMT stations.

    “As the IMT emissions in the 3300-3670 MHz may saturate the low noise block (LNB) of the fixed-satellite service (FSS) earth station which traditionally operates in the 3400-4200 MHz, there is a need to make use of high-quality bandpass filters operating in 3700-4200 MHz range,” a statement issued by Trai said. 

    ALSO READ | Broadcasters huddle up as 5G roll-out plan gathers pace

    Broadcasters claimed to have faced interference on downlink frequencies during the initial 5G trials, following which they raised the issue with the MIB, DoT, and WPC (Wireless Planning and Coordination Wing of DoT), and the Trai. There were apprehensions around potential interference due to the larger C band allocation to 5G and the limited guard band of 30 MHz between the two services.

    “The 526-612 MHz frequency range should not be put in the forthcoming auction,” Trai recommended while stating the following reasons:

    (i)  Band plan(s) for the frequency range 526-612 MHz is yet to be defined by 3GPP/ITU.

    (ii)  Development of ecosystem for IMT in the 526-612 MHz frequency range will take some time.

    (iii)  MIB is using the 526-582 MHz band extensively across the country for TV transmitters.

    The telecom regulator has urged the DoT to come out with a plan for reframing the 526-582 MHz band to be utilised for IMT deployments. “To make 526-582 MHz band available for IMT, DoT should work with MIB to prepare a plan for an early migration from analogue to digital transmission, so that the frequency band from 526-582 MHz can be vacated for IMT services,” it said.

    Prasar Bharati had earlier argued that airwaves in the 526-582 MHz frequency band are required for the expansion and modernisation of its services. The public broadcaster had told Trai that “availability of spectrum is very crucial for planning DD TV Transmitters. Thus, the decision to use frequency band 470-698 for IMT purpose can be taken only after finalisation of terrestrial TV services by Doordarshan or other private broadcasters.”

    “Many analogue, digital-ready and digital terrestrial TV transmitters are operating in the band. Also, digital-ready transmitters are under installation in the union territory of Jammu & Kashmir for which the wireless planning & coordination wing (WPC) has provided for in this band only,” it added.

    The DoT, through its letter dated 13 September 2021, requested Trai to furnish its recommendations on the auction of spectrum in the frequencies identified for international mobile telecommunications (IMT)/5G. The recommendations were sought on the applicable reserve price, band plan, block size, the quantum of spectrum to be auctioned and associated conditions for auction of spectrum in 526-698 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3670 MHz, and 24.25 – 28.5 GHz bands identified for IMT/5G in India.

    Except for 526-698 MHz, Trai has recommended that all available spectrum in the abovementioned bands be put to auction for 5G services.

  • Trai institutes mechanism for speedy implementation of its recommendations by DoT, MIB

    Trai institutes mechanism for speedy implementation of its recommendations by DoT, MIB

    Mumbai: The Telecom Regulatory Authority of India (Trai) has released its annual report for the year 2020-21. The report contains an overview of the broadcasting sector and a summary of the key initiatives of Trai on regulatory matters with specific reference to the functions mandated to it under the Act.

    Over the last few years, Trai has sent a number of recommendations to the department of telecommunications (DoT) and the ministry of information and broadcasting (MIB) on important issues concerning the growth of broadcasting and cable services in the country. A number of these recommendations have been accepted during the period. “However, many of the important recommendations are still pending for decision/implementation by DoT and MIB which if implemented would have a significant positive impact on the sector,” the telecom regulator said.

    Important recommendations that have been accepted by MIB during the year 2020-21 and their likely impact on the sector are detailed below:

    (i) Recommendations on “Issues related to New DTH Licenses” were forwarded to the government on 23 July 2014. The implementation of these recommendations will ensure certainty and continuity of business and orderly growth of the DTH sector and will promote a level playing field. After acceptance of these recommendations by MIB, the amendments to DTH License guidelines were issued on 30 December 2020.

    (ii) Recommendations on “KYC of DTH Set Top Boxes” forwarded to the government on 24 October 2019 addressed the security concerns for use of DTH boxes outside the country as satellites have footprints beyond geographical boundaries. The acceptance and implementation of these Recommendations will result in standardisation of the verification process and will ensure installation of DTH connection at the address mentioned in CAF and will not load the industry/customer with unnecessary additional requirements and costs.

    (iii) Recommendations on “Platform Services offered by DTH Operators” forwarded to the government on 13 November 2019 addressed the issues of bringing platform services under a regulatory framework and providing transparent information to consumers about platform services. Amendments to DTH License guidelines have been issued by MIB on 30 December 2020 whereby DTH operators are permitted to operate platform services channels to a maximum of five per cent of their total channel carrying capacity.

    Recommendations forwarded to MIB that are still pending with the government as of 31 March 2021 are as follows:

    1.      Recommendations on restrictions on certain entities from entering the business of broadcasting and distribution of TV channels.

    2.      Recommendations on Issues related to radio audience measurement and ratings in India.

    3.      Recommendations on issues related to digital terrestrial broadcasting (DTT) in India.

    4.      Recommendations on sharing infrastructure in the TV broadcasting distribution sector.

    5.      Recommendations on issues related to digital radio broadcasting in India.

    6.      Recommendations on issues relating to uplinking and downlinking of television channels in India.

    7.      Recommendations on reserve price for auction of FM radio channels in new cities.

    8.      Recommendations on interoperability of set-top box.

    9.      Recommendations on review of television audience measurement and rating system in India.

    10.    Recommendations on a regulatory framework for platform services (PS) for MSO.

    The Trai felt that a periodic review of the implementation status of all recommendations of the authority should be done at the highest level. With an objective to put in place a mechanism whereby there is a periodic review of the implementation of pending recommendations of Trai in DoT/MIB and to create a central repository for real-time tracking of the status of all recommendations, the regulator has developed a recommendation status portal which can be accessed jointly by Trai, DoT, and MIB.

  • Broadcasters to withdraw petitions challenging Trai on NTO 2.0 in SC

    Broadcasters to withdraw petitions challenging Trai on NTO 2.0 in SC

    Mumbai: The Indian Broadcasting and Digital Foundation (IBDF) and its members are likely to withdraw their petitions challenging the New Tariff Order (NTO) 2.0 in the Supreme Court, sources told indiantelevision.com. The apex court took up broadcasters’ applications for withdrawal of the petition while hearing the matter on Tuesday.

    Earlier this month, The Telecom Regulatory Authority of India (Trai) had extended the deadline for implementation of the new tariff order (NTO) 2.0 to 1 June. The previous deadline was 1 April.

    Trai had then also allowed broadcasters to revise their reference interconnect offers (RIO) by 28 February and publish the same on their websites. Distribution platform operators (DPOs) were directed to report the distributor retail price and composition of the bouquet of pay channels in compliance with the new regulatory framework by 31 March. Those who have already submitted can revise their RIOs by 31 March.

    In response to the earlier deadlines, broadcasters had come out with their new RIOs in October-November last year, preferring to pull their popular channels out of the bouquets instead of reducing the price to or below Rs 12. Though still above the cap, many of these prices were revised down later.

    Pertinent in this regard is Trai’s intention to form a committee with representation from leading pay-TV industry associations to ensure smooth implementation of the New Regulatory Framework 2020. In a letter dated 22 December 2021, the regulator has asked the IBDF, All India Digital Cable Federation (AIDCF), and the DTH association to nominate a maximum of two representatives to be part of the implementation committee.

    Prior to this, Trai had in November 2021, notified stakeholders that NTO 2.0 implementation would be delayed until 1 April. Speculations regarding backroom parleys between the telecom regulator and broadcasters to end the impasse have also been in the news lately. 

    This copy will be updated.

  • Prasar Bharati invites applications for vacant MPEG-2 DD Free Dish slots

    Prasar Bharati invites applications for vacant MPEG-2 DD Free Dish slots

    Mumbai: Prasar Bharati has invited applications for vacant MPEG-2 slots on free DTH platform DD Free Dish in the 58th e-auction process. The slots will be allowed for the period between 1 April and 31 March 2023, and the e-auction will be tentatively held from 7 March. 

    The public broadcaster has categorised different language/genre channels into six buckets and published their starting reserve price for the bidding process.

    Starting reserve price/annum for Hindi GECs (bucket A+) is Rs 15 crore, while Hindi movie channels (bucket A) will have to start the bid at Rs 12 crore. Hindi, English, and Punjabi news and current affairs channels (bucket C) will have to bid starting at Rs seven crore.

    For bucket B comprising all Hindi music and sports channels, Bhojpuri GECs and movies and Hindi teleshopping channels, the starting reserve price is Rs 10 crore. For all other remaining genre (language) channels in bucket D and devotional (spiritual/AAYUSH channels) in bucket R1 the starting reserve price is Rs six crore and three crore, respectively.

    Only satellite channels licensed by the MIB can take part in the e-auction. Only companies holding valid permission from the ministry or their authorised distributor partners can apply for participation.

    In case the applicant company is other than the licensee, the document/agreement signed between the license-holder company and the applicant company authorising the applicant/bidder for distribution of the channel and bidding on behalf of the licensee must be submitted.

    International public broadcasters licensed by the MIB can also participate in the e-auction.

  • I&B ministry forms Joint Working Group for audience measurement sampling

    I&B ministry forms Joint Working Group for audience measurement sampling

    Mumbai: The ministry of information and broadcasting (MIB) has formed a Joint Working Group to formulate a mandate for exploring data capturing capabilities in Set Top Boxes (STBs) for audience measurement sampling.

    With Prasar Bharti CEO Shashi Shekhar Vempati as the chairman and DTH association president Harit Nagpal as a member, the joint working group will have one representative each from MeitY, BIS, Barc India, and AIDCF. It will submit its report to the I&B ministry within the next four months.

    The current guidelines for the TV Rating Agencies prescribe the use of panel homes, drawn by establishment survey and representative of the TV viewing population, for carrying out the Audience measurement. However, the latest recommendations from the Telecom Regulatory Authority of India (Trai) and TRP committee headed by Prasar Bharati CEO suggested combining traditional sample-based statistical approaches with big data approaches like Return Path Data in STBS.

    The new working group has been entrusted to study different aspects of the data capturing including Return Path Data (RPD) in the context of the audience measurement, international practices, and security of the viewership data. “It will also study successful global best practices in RPD, like that of Canada, the models undertaken by Barc India and other independent experiments by DTH operators and other relevant stakeholders,” said the ministry on Wednesday.

    The Group will specify minimum standards for RPD capable STBS, SOPs for certification and audit of the same, and specify common protocols, data standards, and modifications to current rating methodology so that data from RpD capable STBS could be integrated into the current TV ratings system.

    Additionally, it will specify minimum standards for any smartphone-based Apps to augment the above proposed RPD system for integration into the current TV ratings.

    -Specify SOPs for certification and audit of the same.

    -Evolve a consensus for how such different data sets including RpD/ smartphone-based data collection will be priced/ costs shared within the framework of the TV ratings system.

    -Specify consent-based privacy framework to govern all such data collection and use within TV ratings.

    -Establish timelines for rollout of above with a clear roadmap to guide all stakeholders while laying out points of responsibility for the same. 

  • There needs to be a level playing field: Tata Sky CEO Harit Nagpal on Free Dish issue

    There needs to be a level playing field: Tata Sky CEO Harit Nagpal on Free Dish issue

    Mumbai: Harit Nagpal, the MD and CEO of India’s largest Pay TV distributor – Tata Sky is known to be a vocal man. Time and again, he has used several platforms and occasions to bring the industry’s concerns to the notice of the government and regulators. Outlining these issues once again at the APOS India Summit – the two day virtual-event that concluded recently, Nagpal stressed upon the need to iron out disparities in regulation that exist in the current ecosystem.

    With the rapid emergence of multiple distribution formats and technologies in the past few years, he strongly believes that the “time has come for everyone to step back and take a look at the regulatory inconsistencies and biases prevailing across platforms.”

    Between the three main distribution technologies of DTH, Cable and OTT, “while both DTH and cable are licensed, regulated and censored (self), DTH pays a license fee while Cable doesn’t. OTTs, on the other hand, are neither licensed, nor regulated or censored, and they don’t even pay a license fee. Just because they came in at different points in time, different rules are applied to each one of them,” said Nagpal.

    In September, Tata Sky and Airtel Digital TV had written to the Telecom Regulatory Authority of India (Trai) asking the telecom regulator to address the issue of broadcasters making their pay channels available for free on DD Free Dish.

    Also Read: https://www.indiantelevision.com/dth/dth-operator/dth-operators-write-to-trai-over-broadcasters-offering-pay-channels-on-dd-free-dish-210909

    At the summit, Nagpal reiterated that while he appreciates Free Dish as a great channel of customer acquisition, there has to be a level playing field.  “There are roughly 100 million homes in India that don’t have a TV. They will not invest in a TV set and subscription simultaneously. Hence, at any given point in time there is a large pool that owns a TV but is not paying for subscription services. A subset of this population moves into the Pay TV universe every year, opening up a huge customer acquisition opportunity for us,” he explained, adding that “the problem begins when Free Dish starts serving them at no cost, the same content that we offer for a price.”

    According to Nagpal, this is an unfair practice on the part of certain broadcasters. It goes against the current tariff regime which mandates designating of channels as either pay or FTA. “This designation should be consistent across platforms,” he insisted. “A customer in rural areas does not understand regulations, and he starts distrusting us.”

    Commenting on the overall growth this year, Nagpal said, “We are north of 17 million homes; much in the same range as what we lost to FTA and economic losses faced by rural India. We have managed to keep our heads above water.”

    Despite the many challenges, he believes that pay TV delivered via cable or satellite cannot be written off in India so quickly. “OTT requires high quality broadband getting into homes, in which case the customer has to pay for both content as well as the pipe. In the case of cable and satellite they pay for the content only. So, when we talk of the masses, Pay TV is here to stay. Out of the 100 million homes without a TV some will keep getting them every year, and those numbers are far larger than the growth of paid OTT. Pay TV and FTA will also coexist and grow.”

    Even though DTH may not be facing an existential threat from either Free Dish/FTA or OTTs, its content that has historically been ‘mass’, will have to evolve, asserted Nagpal. “The masses also want innovation which is why there are nine million HD homes today, and many with HD are now looking for something new. Innovation has, therefore, constantly been on our radar. With regard to content as well, there is a very large number of discerning viewers among those who do not have access to the pipe. They are not happy with the ‘saas-bahu’ or the content of the past. There is a niche which is likely to grow, for which content needs to be invested in by broadcasters.”

    In fact, trends show that customers are not going off Pay TV even when they can afford or avail streaming services. Sharing his observations, the Tata Sky Nagpal stated, “The premium end of our user base did not switch off their Pay TV regardless of having access to VOD services. Binge Plus was an attempt to cater to this set of audiences. Whether a consumer wants to watch OTT or Linear on phone, tablet or the TV set, my job is simply to make it convenient for them.”

    In this space again, he welcomes the advent of aggregators like Prime Channels and Google TV to grow the market and industry together.

    Concluding the discussion with his thoughts on Tata Sky and the overall broadband market, Nagpal shared, “Broadband was never intended for the mass market because we didn’t have a network of fibre in the ground across the country. Our intention is only to reach our premium customers, and hence, it will remain a niche, very high-quality broadband play for us.”

    As for satellite, he averred, “In my understanding broadband is not reaching rural areas not because it is difficult to lay a wire to that place, but the fact that it will be difficult to find enough people in a village who can pay Rs 800 per month, month-on-month. Unless it can be delivered at the rate of Rs 200-300 per month, the economics of which is unviable, it looks unlikely. But we may be surprised in the future.”

  • HITS combines flexibility of DTH and reliability of cable: NXT Digital CEO Vynsley Fernandes

    HITS combines flexibility of DTH and reliability of cable: NXT Digital CEO Vynsley Fernandes

    Mumbai: Headend-in-the-sky (HITS) combined the flexibility and quality of direct-to-home (DTH) services and the reliability and pricing of cable television, said NXT Digital managing director and chief executive officer Vynsley Fernandes on Wednesday. NXT Digital is the only HITS operator in India and Fernandes is bullish on the prospects of video and broadband aggregation using HITS technology.

    In a conversation with Media Partners Asia co-founder and senior partner Vivek Couto at the Apos India summit on Wednesday, Fernandes spoke about structural developments in the TV distribution ecosystem, pricing parity for consumers, satellite broadband policy and more.

    Cable TV has been around since 1995 and the Hinduja Group introduced HITS to India in 2015. The way HITS technology works is that channels are aggregated at an Earth Station, uplinked to a satellite and instead of being downlinked directly to the customers, like DTH, they are received by cable operators via a refrigerator-sized unit and redistributed to customers, explained Fernandes. HITS allows local cable operators to digitise overnight in remote markets such as Lakshadweep, Andaman and Kargil.

    HITS is a capex light model. Post pandemic, there were last mile owners who wanted to be relevant and grow. The challenge was investing in the back-end and connecting to consumers. Fernandes said, “We already have access to 4400 pin codes and we’ve launched 40 NXT Hubs across the country. These NXT Hubs are owned and operated by us and are future-ready. Any last mile owner within 150 square feet can approach a NXT Hub and offer 650 TV channels and broadband speeds of 100 mbps overnight. It empowers the last mile owner to become a digital services provider. By the end of this financial year (March 2022) we will have 100 such NXT Hubs across the country.”

    “Last year, cyclones hit India and MSO fibre got damaged. They had the option to lay fibre but that would take a couple of months or move to another platform. We thought, what if they used our infrastructure to go digital? So, we approached the ministry and shared this idea. Credit to the ministry of information and broadcasting, literally in a few months by November 2020 it was promulgating infrastructure sharing for HITS with MSOs,” he added.

    Speaking about structural developments in the content distribution ecosystem, Fernandes said, “There are two things happening that are changing the structural makeup of distribution in terms of consumption – NTO 1.0 which is bringing parity and transparency and the pandemic.”

    “Post-pandemic, OTT platforms have realised that they can be more relevant to customers as part of an aggregated offering rather than as a standalone service,” observed Fernandes. “In metros where broadband speeds are 100 mbps and above, in towns and smaller markets, people want the same product but in smaller bundles or what we call ‘skinny bundles’. These customers have broadband speeds of 10mbps and their main consumption is not entertainment but access to e-medicine or e-education.”

    In terms of how much a consumer is willing to pay for content, Vynsley noted, “The actual prices differ widely across the country. There are markets where consumers average revenue per user (ARPU) is under $3, content cost is $2-3. In these markets, there’s not much offtake in terms of paid OTT services, instead consumers access YouTube and other freemium platforms. If you move to cities, the pricing is $300 (Rs 28,000-30,000) for an annual subscription. This is a significant opportunity for multi-system operators for flexi-play.”

    Fernandes is of the view that HITS will increase revenues for the entire ecosystem. “Today, a lot of MSOs look at certain markets as not viable because the cost of connectivity is still significant,” he said. “That’s why infrastructure sharing will benefit MSOs and broadcasters. MSO will share capacity and be able to deliver value to customers and better quality of service, while broadcasters will improve their bottom lines.”

    In Q1, NXT Digital reported five million video subscribers and one million broadband users growing at 7-10 per cent year-on-year. “There is a 30 per cent overlap between our video and broadband user base,” said Fernandes. “That means a quarter of a million customers are consuming both linear/digital products. There is a runway to grow that base to a healthy 50-60 per cent and that’s our target vision for the business. We’ve just launched our OTT product and are looking at bundled ARPUs. Linear TV ARPUs are currently at Rs 300 and OTT delivers higher ARPUs for us. It doesn’t concern me too much which part of revenue delivers but our offering should reach every demographic in the country.”

    During the pandemic, the government couldn’t reach out of several million people who resided in areas where connectivity was patchy. It was prompted to launch e-agriculture and e-medicine services and Telecom Regulatory Authority of India (Trai) has released recommendations on satellite-based connectivity for low bit rate applications. “The government is working on a clear plan and sees the tremendous need for broadband over satellite,” noted Fernandes.

    “Satellite broadband is a clear parallel to HITS which was needed to deliver video in markets that could not be serviced by terrestrial networks,” said Fernandes. “Broadband serves the same void by catering to markets that cannot be serviced by terrestrial fibre. Today, a broadband over satellite provider needs four things – reach and footprint, a company with experience working with satellite, regulatory knowledge and ability to work with industry stakeholders.”