Tag: ESPN

What is your overview of the present scenario of the broadcast industry?
If you really see the broadcast industry in the last 10 years, then it has evolved a lot from being totally fragmented to a situation where big corporate bodies have come in and are trying to evolve a corporate structure. The distribution segment too has seen this happening with big MSOs coming in and trying to bring a semblance of order in the business.

At one point when big corporate entities started coming into the industry’s various segments it was felt that the industry as a whole would shape up faster having well defined corporate identities and professionally managed businesses as in other sectors. Unfortunately, that did not happen.

From a broadcaster’s point of view under-declaration of the subscriber base had always been an issue, which slowly became an accepted norm. The whole flip-flop on CAS since 2003 has added to the confusion in the market. However, CAS in its second inning now seems to be more of a reality than just talking about bringing in new technologies.

With the arrival of DTH and CAS, the choice of a consumer gets widened. It gives broadcasters a competitive edge as good content and a strong channel would be a winner. From cable operators’ point of view, new technologies not only bring in transparency in the whole system, but also some orderliness.

Don’t you think that intra-industry differences and constant appealing to the umpire (the government or the regulator) has impeded industry’s growth?
Fundamentally, everybody had their own agenda. There has always this issue of declaration or under-declaration between the cable fraternity and broadcasters. Most industry disputes emerged from this basic issue of want of more declaration of the subscriber base or a resistance to it.

Now this basic issue gave rise to subsidiary areas of dispute. I’d say that want of more subscriber base, price hike and introduction of new channels on limited bandwidth are at the core of ills afflicting the industry. These always created an environment that was not very conducive for business on either side.

The regulator’s efforts to address industry issues cannot be negated. At the end of the day, any industry difference would affect the subscriber. It’s always beneficial to have a neutral agency to oversee an industry as it helps the industry too to go to such a body and bounce off ideas.
Over the last 18 months or so every issue, major or otherwise, seems to be going to disputes tribunal, which results in loss of time and inconvenience to subscribers. What do you have to say about this trend?
This was bound to happen. When (industry) grievances are kept captive for long one glimmer of hope in a tribunal makes stakeholders run to it. Had there been a regulator or a disputes tribunal from the start or even earlier, the rush of cases in TDSAT would not have been there. It’s like giving vent to accumulated fury.

As part of the broadcast industry, are you, unlike some others, in favour of a regulator?
I am definitely in favour of a regulatory body.

Even if the regulatory body may end up over-regulating the industry?
A regulation is a regulation. At least in India you have the freedom to stand up and ask the reasons for a particular regulation and what led to its formulation. Ideally, a regulatory body should take care of the interest of all stakeholders, including consumers. It’s foolish to think that broadcasters should grow and the MSOs shouldn’t. If a particular segment is not growing, then the whole industry suffers.

It’s easy to put the blame for all industry ills on one particular segment, but that’s not the case and a regulator should see it turns out to be a win-win situation for all.

What do you think of the revenue share formula that the Telecom Regulatory Authority of India (Trai) has mandated?
At this point of time, I feel there is scope to better it (from a broadcaster’s point of view). Also, at this juncture we could put across our views to the regulatory body, which would be done in all probability.

If you ask me, what should have been the broadcasters’ share of revenue accruing from pay channels, I’d say 50 per cent, instead of 45 per cent. The remaining could have been divided in the ratio of 20:30 between the MSOs and local cable operators.

I am giving the LCOs more share as they are the retailers, while MSOs are whole sellers. In marketing practices, retailers always have the bigger margin.

Why do you think broadcasters’ share of the revenue gravy should be more?
Simply because broadcasters are making investments in programming. If cable TV subscribers and viewers in general want high quality programming, then broadcasters need to invest in such shows. Quality production can only come through higher investments and costs cannot be limited or capped.

How would broadcasters bring quality stuff if their margins are clipped? Every business runs on the formula that the return on investment is balanced. Low investments could also mean low quality production values. Would Indian viewers settle for shoddy programmes and production values?

What’s your opinion on Trai’s move to legitimize carriage fee charged by MSOs, a reality that was never discussed openly or accepted?
I don’t think carriage or a fee paid for carriage on cable networks’ prime band would be an issue in a digital era towards which everybody is working. A digital system will take care of not only quality of broadcasting, but also the shortage of space that’s plaguing cable networks.

Do you feel that ratings of various TV channels will get affected during initial phase of CAS, scheduled to be rolled out from 1 January 2007?
Any change will have its rub-off effect on all stakeholders, including customers. A transition phase always throws up some doubts, which would get ironed out over a period of time.

Is there a chance of some pay TV channels going free in CAS areas to safeguard their reach, which is important vis-?-vis advertising revenue?
I really don’t think so. If the content is powerful, consumers will pay for a channel. It can happen that broadcasters introduce new free to air channels. I don’t foresee a scenario where existing pay channels turn free to air.

Do you foresee a scenario where a consumer picks and chooses channels in a CAS regime depending on events for a short period of time?
It is a possibility and will revolve around marketing initiatives. For example, a pay channel can be made available to a consumer for a year at X price. Now if that consumer wants the channel for just six months, then the cost would X plus a certain percentage. Shorter the period, higher would be the premium.

This trend could be a big concern for sports broadcasters as actual pay-per-view comes into vogue. These are advanced technologies, which will follow when digitalization, DTH and CAS set in properly.

Will CAS turn out to be beneficial from a distribution point of view?
Certainly. Apart from bringing about some transparency in the whole system, CAS would make the environment competitive, while giving more choice to a consumer. Distribution will have a bigger role to play in such a scenario.

With the introduction of CAS and expansion of DTH services, the focus of distribution will be more on consumer rather than just a broadcaster’s client, which is the MSO. As a distribution person, I’ll also have to keep in mind the interest of my client’s clients (consumers). Therefore, there would be a lot of play while servicing clients.

To facilitate a loyal customer base for a cable operator, it will be very important for me to also go and directly talk to the consumer about a broadcasting product.

What will Zee Turner do to dial the customer directly?
The primary objective should be the content and then creating awareness about it. As a company we would try to create a communication channel with the consumer/viewer to keep him in the loop about my product in its entirety.

The approach would have to be 360 degree in the sense that we get feedback from consumers, hitherto not permitted by cable operators to approach directly, and then create products or upgrade existing channels depending on the feedback.

In a small way, Zee Turner has started hooking up with the consumer. But it’ll take more time for this exercise to bloom fully as some doubts still persist. Those uncertainties have to be removed before a full-fledged consumer relationship exercise can be rolled out.

What are the future plans for Zee Turner?
With consumer becoming the king as options for him open up, thanks to new technologies, I need to be more close to him. Most company activities will be revolving around this theme of getting up close to the consumer, apart from satisfying my direct customers, the MSOs.

For this to happen, activities like events have to be organized either via TV channels or on the ground. As a bouquet, Zee Turner has the largest number of channels (32) across most possible genres of programming. The task before us is to pick up our positives and pass it on to the consumer in a way that is understood by him.

Has a deal with Tata Sky been concluded?
We are talking to each other. We had suggested a price for Zee Turner bouquet of channels based on the formula mandated by a disputes tribunal in case of Dish TV and Star India. Tata Sky is not comfortable with the suggested price.

What are the issues bogging down an agreement to be concluded?
Tata Sky wants to be selective in terms of channels (from the Zee Turner bouquet), which we are not agreeable to; especially when such a criteria has not been adopted for other bouquets.

What are the revenue targets for Zee Turner this financial year?
Zee Turner with a subscriber base of 4 million for bouquet 1 and 3.7 million for bouquet 2 is targeting a turnover of Rs 4000 million by the end of this financial year in March 2007. This should translate into 30-35 per cent growth in revenue compared to last year. I am not taking into account bouquet 3 as the subscriber base and revenue is negligible at this point of time.

I can say with pride that we have been improving our performance. In some areas, we have done better than One Alliance (Discovery-Sony distribution joint venture), while in some areas we have done as well as Star. But there is no denying that at a national level, the Star bouquet is way ahead of others.