ITV

Tag: HITS

  • JainHITS signs Ingram Micro as logistics partner

    JainHITS signs Ingram Micro as logistics partner

    BENGALURU: Headend in the sky (HITS) service provider JainHITS has got another aspect of its business piece in place. It has forged a strategic alliance with marketing and logistics company Ingram Micro which has come on board as its logistics partner.

    “Our goal is to reach and partner 60,000 cable operators and help them not only survive but also maintain their entrepreneurial business and grow further. In the first year, JainHITS will do transactions across India with 2000 local cable operators. JainHITS believes that 20 per cent of this would turn to be the market for broadband and 10 per cent for Cloud Broadband, Gaming etc,” says JainHITS managing director Ankur Jain. “Ingram Micro is one of the leaders in providing Logistics Solutions on pan India basis. Through this partnership, Ingram Micro will provide an effective and efficient solution to JainHITS to reach a large number of cable operators across India.”

    “We are proud to be chosen by JainHITS as logistics partner. The partnership will enable JainHITS to leverage our pan India network” says Ingram Micro senior director – mobility business Atul Gaur.” We provide a very strong value bridge between customers and vendors, bringing the latest products and services to market in least possible time. For JainHITS, we will ensure quick delivery of products to the customers.”

    JainHITS has promised to offer broadband, connected homes, multi-screen, and other value added services along with some innovative consumer products such as cloud broadband, hybrid broadband TV (HBB TV) etc, besides offering digital Cable TV which can carry up to 1000 TV channels.

  • Times Group channels hop on to OneAlliance bouquet

    Times Group channels hop on to OneAlliance bouquet

    MUMBAI: MSM Discovery (MSMD), the distribution joint venture between Sony‘s Multi Screen Media (MSM) and Discovery Communications, has entered into a multi-year distribution deal with Times Television Network (TTN) to strengthen its TheOneAlliance bouquet.

    The move comes close on the heels of IndiaCast-DisneyUTV JV that further consolidated the Indian television distribution space. The consolidation will help broadcasters to grow their pay-TV business as India moves towards digitisation of cable TV networks.

    The news and entertainment channels of TTN – Times Now, Movies Now, ET Now and zoOm – will now be exclusively distributed in India for collection of subscription revenue over the cable (analogue and digital), DTH, IPTV and HITS platforms as a part of TheOneAlliance bouquet. The deal between TTN and MSMD comes into effect from 6 February.

    The channels were earlier distributed by Prime Connect, the distribution joint venture between Times Group and media entrepreneur Yogesh Radhakrishnan.

    In a related development, Radhakrishnan has moved the Delhi High Court. The matter came up for hearing even today and will now resume on Monday.

    “The channels have terminated their distribution contract with Prime Connect and moved on to TheOneAlliance bouquet. This has weakened the JV and even made it redundant in that sense as it has no Times Group channels,” an industry source said on condition of anonymity.

    TTN will, however, undertake the marketing and channel penetration plans independently.

    Strengthening the OneAlliance bouquet

    The addition of TTN channels will strengthen TheOneAlliance’s English news offering which will include Times Now and TV Today Network’s Headlines Today. The bouquet will also have a business news channel in ET Now.

    The English movie channel offering will also get a boost with the addition of Movies Now as the bouquet already has Sony Pix. Further, zoOm will combine well with Hindi movie channel Max.

    MSMD President Rajesh Kaul says that the addition TTN channels will take the bouquet strength to 28 from 24 and more importantly will maintain the quality of the bouquet.

    “These are top channels in their respective categories and adding them will certainly strengthen the bouquet,” avers Kaul.
    Kaul said the immediate priority is to increase the penetration of TTN channels and monetise it in metro markets where these channels are well distributed.

    TTN MD and CEO Sunil Lulla said, “The Times Group and Multi Screen Media share a similar perspective on the broadcast industry and together we are poised to help grow the industry by ushering in transparency, value creation across the chain and by building strong brands.”

    TTN said its channels reach over 100 million viewers in 30 million urban Indian households.

    “As part of TheOneAlliance bouquet our channels will benefit from penetration in more homes and availability on a wider choice of packages. TTN and MSMD will together be able to effect realisation of a fair share of subscription revenue as well as grow ARPUs (Average Revenue per User) of our premium content offerings,” added Lulla.

    MSM CEO Man Jit Singh said, “TheOneAlliance is a robust distribution force and offers the best of entertainment to viewers. Addition of the TTN channels will further strengthen the bouquet and together we can ride the digitisation wave to maximize the true potential of the business.”

    MSMD already distributes 24 channels across genres including Hindi General Entertainment, Sports, Movies, Factual Entertainment, News, Bollywood, Reality, Action, Animation, Adventure and Lifestyle. Apart from MSM and Discovery channels, TheOneAlliance also distributes TV Today Network and Neo Sports broadcast network channels.

  • HITS can get active in 2nd phase of digitisation

    HITS can get active in 2nd phase of digitisation

    MUMBAI: The second phase of digitisation across 38 cities will offer an opportunity for Headend-In-The-Sky (HITS) operators as the presence of national multi-system operators (MSOs) is not adequate enough to cater to this entire television viewing population, said Digicable Network chief strategy officer Sisir Pillai.

    Tapping into this market will be a few HITS operators. "We will see a couple of big players launching HITS service," said Pillai.

    Hinduja Group, which has interests in cable TV distribution business through IndusInd Media and Communications Ltd, is planning to launch HITS platform for smaller cable TV operators to offer digital service. It has already applied to the Information and Broadcasting ministry for a licence.

    The HITS business will be under Grant Investrade, an investment arm of the Hindujas. Grant Investrade holds 6 per cent stake in IMCL.

    Jain TV Group-owned NSTPL (Noida Software Technology Park Limited) has also got plans to get aggressively active in HITS. It has christened its HITS platform as Jain HITS.

    Earlier, Siticable had started HITS service before the government had mandated digitisation of cable TV networks also the country but the project failed to make much ground and was finally shelved off.

    "HITS can be a cheaper and faster option to grab the market in the second phase. MSOs will need to invest Rs 160-200 million on a digital head-end in each city they want to reach out to as there is a requirement to build a capacity for carrying 500 channels," said Pillai.

    Since in the first phase the national MSOs were having a strong base, there was no need gap for a HITS service, Pillai added.

    Even in the third phase, Pillai expects HITS to have a strong potential to grow.

    Cable operators will be able to also offer broadband services through their fibre optic co-axial cable, despite receiving video signals from the HITS provider via satellite. "The bundling of broadband with video services will also be possible even if cable operators take to HITS for offering digital service. So the advantage over DTH will continue to prevail. Direct-to-home service providers can‘t offer broadband and satellite bandwidth is very costly," said Asianet Satellite Communications Ltd president and COO G Sankaranarayana.

    Building a HITS platform will, however, involve huge investments as it requires transponder space on satellite, encryption systems and digital set-top boxes. NSTPL is planning to invest Rs 15 billion over five years in its HITS project.

  • HITS a gain but government mum on FDI hike in 2009

    HITS a gain but government mum on FDI hike in 2009

    With India having touched the monumental figure of 512 in terms of television channels including 249 news channels, the Information and Broadcasting Ministry pushed the panic button towards the end of 2009, asking the Telecom Regulatory Authority of India (Trai) to study how many channels can be permitted in the country.

    As a follow-up, the Government has with immediate effect suspended receipt of new applications for permission to uplink television channels from India and downlink channels to India until the regulator submits its report on spectrum availability.

    In an order of 18 January, the Ministry said “it has been observed that although improved technologies have resulted in better utilization of the available spectrum and transponder capacities, the spectrum and transponder capacities for satellite TV channels are not unlimited. A need is felt to revisit the present policy for uplinking and downlinking with respect to the approach towards grant of permission including the eligibility criteria and the terms and conditions of the permission.”

    Early in October 2009, I&B Minister Ambika Soni had written to Trai Chairman J S Sarma to examine issues relating to expansion of private television channels in the country. The Minister asked the Authority to examine ways of checking the financial viability of parties that apply for setting up news channels in the country.

    However, Soni on 7 December denied in Parliament that the directive to Trai to examine the status of television channels in the country implied any plans to curb the growth of the sector. She said the study to examine the maximum number of channels that could be telecast was being carried out in view of spectrum constraints.

    “The government is surely not going to shut the door on the growth of TV channels in India. But there is a logistic problem and the government has to sort it out. Some of our growth plans may be temporarily upset,” says the head of a broadcasting company on request of anonymity.

    Meanwhile, the I&B Ministry is also keen that the Broadcast Services Regulation Bill that is pending finalization for about three years should sail through and provide for an independent regulator and a Content Code.

    A senior Ministry official told indiantelevision.com that a task force had been set up under the chairmanship of the Secretary in the Ministry, Mr Raghu Menon, and had already held a few internal meetings, The task force – which comprises representatives from the Indian Broadcasting Foundation, the Broadcast Editors Association, and the News Broadcasters Association among others – would now meet stakeholders including consumers, representatives of the print media, civil societies, and editors “to understand their concerns.”

    “Self-regulation has some limitations,” the official added without elaborating, while referring to the Content Code and the Regulatory Body formed by the News Broadcasters Association.

    It was expected that this task force would complete its work by March this year. The official said the issues under discussion were not merely content, but also quality of service, carriage fee, service charges and so on. Thus, the entire responsibilities that the independent regulator would have to bear would be finalised.

    However, the Cable Operators Federation of India has challenged the constitution of the Task Force on the ground that those sought to be regulated cannot adjudicate on the kind of regulation the government can impose.

    Meanwhile, six State Monitoring Committees and 67 District level Committees have been constituted to review and deliberate on the litany of complaints received by authorized officer or take suo motu cognizance of violations transmitted and re-transmitted in the local channels.

    Over 130 Advisories/Warnings/Orders were issued to various TV channels for violation of the Programme and Advertising Codes prescribed under the Cable Television Networks (Regulation) Act, 1995 and rules framed thereunder.

    Interestingly, many of the notices issued during 2009 related to reality shows like Big Boss on Colors, Pati Patni aur woh on NDTV Imagine, and Sach ka Saamna on Star Plus, apart from some for popular series like Bandini on NDTV Imagine and Balika Vadhu and Na aana is des Laado on Colors, and most of the others for the content of commercial advertisements.

    A total of 77 private satellite TV channels were permitted to uplink/downlink under the uplinking and downlinking guidelines, taking the number of general entertainment channels to 263. Permission has been given to set up nearly 75 teleports.

    In comparison, there were 417 private channels (357 uplinked from India including 197 news channels) and 33 Doordarshan and Parliamentary channels in 2008.

    Trai had earlier issued a consultation paper on restructuring of the cable sector, and is understood to be working on a deadline since cable operators have not been responding to the questionnaire placed by it on its website.

    After obtaining the Union Cabinet‘s approval to issue policy guidelines for Headend-In-The-Sky (HITS) operators, the guidelines were announced on 26 November 2009. Being a digital delivery mode of distribution, HITS would speed up the process of digitalization of cable services located in non-Cas (conditional access system) areas of the country.

    Though the country failed to make much headway in the area of IPTV despite the Ministry having rushed through amendments in the downlinking guidelines for this segment in September 2008, this was attributed to the slow pace of broadband growth and to the strong penetration of cable TV and growth of DTH. IPTV operators also complained that there was very little clarity provided by the government on content issues.

    Media companies are hoping that the government will hike FDI (foreign direct investment) limit and come out with more liberal policies in 2010 to fuel the sector‘s growth.

  • ‘We are open to a foreign equity partner for the English channels’ : Laxmi Narain Goel – Zee News Ltd MD

    ‘We are open to a foreign equity partner for the English channels’ : Laxmi Narain Goel – Zee News Ltd MD

     Zee News Ltd (ZNL) plans to invest Rs 5 billion in a slew of channels over two years, expanding its presence in regional markets and new segments.

    Immediately on the agenda is the launch of a Tamil general entertainment and a Telugu news channel. Plans are also afoot to launch an English business and a global news channel.

    The company is also bringing to its bouquet mix a clutch of regional movie channels. It will soon apply for a Bengali movie channel while Zee Talkies is being transferred from sister company Zee Entertainment Enterprises Ltd.

    In an interview with Sibabrata Das, Zee News Ltd managing director Laxmi Narain Goel chalks out the company’s growth roadmap.

    Excerpts:

    When Zee News Ltd was spun into a separate entity a few years back, it was making a loss due to the Telugu channel. How did things turn around?
    The losses from the new businesses have substantially reduced. Zee Telugu, in fact, should break even in the third quarter of this fiscal and Zee Kannada in the subsequent quarter. Our turnover has also gone up from Rs 2 billion to Rs 3.58 billion (standalone) for the fiscal ended 31 March 2008, with Zee Marathi and Zee Bangla seeing exponential growth in the last one year.

    Is the company still taking a cautious approach and waiting for some recent channels to break even before launching new ones?
    We are launching a Tamil general entertainment channel (GEC) with an investment plan of Rs 900 million in September as the Telugu and Kannada channels are close to earning profits. The Telugu news channel will launch in October while the Malayalam GEC should make its appearance in the next fiscal.

    ZNL is also planning to launch an English business and a global news channel. Do you see this the right stage for the company to leap into such high-cost investments?
    We plan to invest Rs 5 billion by FY’10 which will include the launch of several channels. Our intention is to have a complete presence in all the segments.

    The company is on a high growth curve and expects to clock Rs 3.55 billion in advertising revenues for FY’09, a 25 per cent jump over the prior year. Subscription revenues are expected to grow even faster, soaring to Rs 1.19 billion (from Rs 667.5 million in FY’08). The Telugu and Kannada channels have started generating pay revenues from the last quarter of FY’08 and would only add to this growth.

    Will you be inducting a foreign equity partner for the English channels?
    We are open to bringing in an equity partner. But all will depend on what proposals we receive from whom and what model is on offer.

    ZNL so far has been a mix of news channels and regional language GECs. Will we also see regional movie channels forming the bouquet?
    We will soon be applying to the information and broadcasting ministry for clearance to operate a Bengali movie channel. We are also transferring Marathi movie channel Zee Talkies from Zee Entertainment Enterprises Ltd (Zeel) to Zee News Ltd. The broad plan is to bring regional movie channels under the company. This will give us a unique mix and add to the growth of the company.
    ‘We plan to invest Rs 5 billion. Our intention is to have a complete presence in all the segments‘

    Zee News has also started a franchising model to enter into new markets. Will you restrict this to smaller markets where it doesn’t make commercial sense for you to enter directly?
    The first such channel will roll out in Chattisgarh with SB Multimedia as our local partner. We will be leveraging our brand while the local partner will make the investments. We hope to strike such deals with other players in these smaller markets. Once we have a cluster of such channels, we can sell as a package to advertisers and command better rates. Significant revenues can then flow in from the franchising model. It can turn out to be a successful business model.

    What made Zee change the positioning of its flagship Hindi news channel?
    We have relaunched as a serious news channel and see it as a differentiator in a segment that is witnessing lots of competition. We have decided not to go the tabloid or sensationalism way. This is not the first time that we are changing our positioning. But our motto continues to be the same: We will show what interests the masses and is in the interests of the nation.

    When you dramatised the ‘Gudiya’ story, was this to do more with ratings than anything else?
    We saw the story as having a genuine mass interest among our audiences. It was a national interest story.

    Isn’t it time for the Hindi business news channel to get a makeover?
    We will be relaunching Zee Business and making it more market-oriented. But we will not just be a stock market channel; we will address all kinds of markets and segments.

    Do you see the surge in personnel and distribution costs upsetting the profitability of the TV news business?
    There is a lot of new manpower and talent available in the market today. The supply can only increase. I believe that manpower costs as a share to revenues will not go up, but indeed fall.

    As far as distribution expense is concerned, the industry will take 3-4 years to settle down. But with DTH (direct-to-home), HITS (Headend-In-The-Sky) and new platforms emerging, we could see carriage costs peaking once the digital systems take off in a big way.

    Zee is continuing to bleed in the Gujarat market. Are there plans to address this by launching a Gujarati news channel to support the GEC?
    Zee Gujarati is making a small loss. The local viewers watch a lot of Hindi entertainment content. But we have no plans to launch a Gujarati news channel.

    Why is the ZNL scrip lowly priced in the market?
    Zee News Ltd is a terribly undervalued stock. It is a profitable company in the news business, has leading regional GECs, and will continue to post strong subscription growth. The market should adequately react to this.
  • ‘Cable companies should start thinking like DTH operators’ : EVS Chakravarthy – You Telecom CEO

    ‘Cable companies should start thinking like DTH operators’ : EVS Chakravarthy – You Telecom CEO

    Having acquired a broadband company in 2006, Citigroup Venture Capital International has set its eyes on the cable TV business. You Telecom has floated a subsidiary to meet the FDI (foreign direct investment) guidelines for cable and acquired Bangalore-based Digital Infotainment, a small-sized cable network.

     

    You Telecom intends to invest Rs 7 billion over four years as it takes steps to enter the digital convergence space. Banking on building a Headend-In-The-Sky (HITS) platform, the company plans to invest Rs 1.2 billion in the first phase of infrastructure.

     

    In an interview with Indiantelevision.com’s Sibabrata Das, You Telecom CEO EVS Chakravarthy talks about the onslaught from direct-to-home (DTH) players to grab the digital space and the need for cable TV operators to up their services and invest in brand building.

     

    Excerpts:

    Since Citigroup Venture International holds 85 per cent in You Telecom India, how are you restructuring the foreign holding to stay within the regulatory cap of 49 per cent so as to kick start cable TV operations in India?
    We have set up a company called Digital Outsourcing where Citigroup holds 49 per cent. The balance 51 per cent is being held by high net worth individuals. We have done the capital restructuring in the cable TV company to meet the FDI guidelines.

    Did Citigroup buy out the Mumbai-based broadband company from British Gas in 2006 because it saw opportunity in expanding the footprint to cable TV?
    We will probably be the only pure broadband player to get into cable TV. Unlike Sify and the other ISP operators, we have built a cable-based infrastructure. So it is a logical extension for us.

    Are you looking at acquisition of cable networks as the entry route in different markets?
    Digital Outsourcing has bought 50 per cent stake in Bangalore-based Digital Infotainment. This is our entry into cable TV operations. We will be rolling out digital services in the next couple of weeks. In other markets, we are also looking at people who could partner with us through joint ventures where we will be offering multiple services.

    Why have you set up a headend in Delhi but not yet rolled out services? Is it that you don’t have a content tie-up with broadcasters?
    Though we have set up a headend in Delhi, we haven’t started operations. We are looking at opportunities like a JV or a 100 per cent buy out. We are also looking at an outsourced service model for digital solutions to cable operators as one option.

    You are banking heavily on the HITS model. How much are you going to invest in the venture?
    We will be investing Rs 1.2 billion in the first phase for setting up the HITS infrastructure. We are waiting for the government to come out with the regulations before we go ahead. We expect the Telecom Regulatory Authority of India (Trai) to come out with its recommendations on HITS in the next 2-3 weeks. For the digital solutions including set-top boxes, we will be using Scientific Atlanta. And for HITS, we will also be looking at Motorola.

    How much are you going to invest in the overall business?
    We plan to invest Rs 7 billion over four years. This will be in addition to Rs 4 billion that we have already put in for laying out the infrastructure for broadband. We will be doubling our footprint to 24 cities.

    Why are you so bullish on digital cable when there is a very low STB penetration in the Cas (conditional access system) belt?
    2008 will be the defining year for digital. After Reliance launches its DTH service, expect fireworks on the ground to start. The cable industry is not fully prepared to combat the DTH onslaught. Cable operators will have to figure out who is going to provide them with the right ammunition to fight DTH tomorrow.
    ‘MSOs should have a one-million digital box seeding plan. Then everything will fall in place’

    What will you offer that will make cable operators come to you?
    It’s high time cable companies started thinking like DTH operators. Cable TV has to match DTH service standards – be it brand building, billing, marketing and services. Multi-system operators (MSOs) today are not concentrating on that. They will have to support the last mile operators with all these things. Otherwise, how are the operators going to fight DTH on behalf of the MSOs. The old mindset has to change. There has to be a complete revolution in digital cable and related services like broadband. If the old MSOs don’t do it, new players like us will show the way.

    Cable operators are willing to part with equity to those MSOs who are offering them more. Isn’t that the deciding factor?
    In the initial land grab situation, it is capital. But in the medium term, it will be quality of management and the systems and processes they work with. The valuations operators are asking for has gone up dramatically with new MSOs entering the field. But it is like the sensex; it will not last forever. We are not willing to pay exorbitantly just because we want to expand our size. In cable, it is important to remember that there is no case of first mover in the consumer’s mind. The future battle in cable will be for grabbing attention in the consumer space through brand building and quality of service. The MSOs have never thought of this as a strategy. And don’t forget that HITS will open up the smaller towns and networks. So the opportunities down close down for any new entrant.

    What brand building exercise you have put in place?
    We have an equity capital reserved for brand building. Bennett & Coleman Company Ltd (BCCL), the holding company of the Times of India, has a five per cent stake in You Telecom. We are looking at doing more such media deals. We are setting in a discipline by allocating equity for brand building.

     

    We have also invested in technology. We have introduced the Oracle-based billing system which we are willing to outsource to others. We have 170,000 broadband subscribers, spread across 12 cities including Mumbai, Bangalore, Chennai, Hyderabad, Gurgaon, Surat, Baroda, Ahmedabad, Rajkot and Pune. Our broadband ARPU (average revenue per user) is Rs 460. Our revenues will be Rs 1.10 billion this fiscal with just broadband in our business mix at this stage.

    Won’t the cable business require huge doses of capital?
    We realise that growth needs capital. Citigroup is committed to infusing capital to grow the business. We have a plan in place.

    But for a venture capital fund, isn’t analogue cable a matter of concern for its revenue leakages across the last mile?
    When Citigroup bought out the company from British Gas, they looked at the convergence space. We are uniquely positioned in that we already have a good broadband play. When we are in cable, we are only extending our laid out infrastructure to a new area of business. It is important to remember that a single service play is like an analogue video play. We see alliances emerging with broadcasters and cable networks across the value chain.
    What is the challenge for MSOs in digital cable?
    MSOs should have a one-million digital box seeding plan. It is possible with a well-evolved cable eco system. Once an MSO has such a deployment, then everything will fall in place. It will be like building a long lasting real estate value – with multiple services including broadband, cable TV, gaming and VoIP. Later we will see bigger cable companies converting carriage fee into equity in broadcasting networks.

     

    What are your views on Trai’s regulation for non-Cas areas?
    The regulator has given it some shape. If the MSOs had implemented Cas more successfully and effectively, then Trai perhaps would have been confident of extending it to other areas.

  • ‘An outlook towards the future of Television’

    In this article, penned for Indiantelevision.com, Media e2e chief evangelist Atul Phadnis is of the view that the media landscape is changing rapidly and new distribution technologies would alter business models.

    As 2006 comes to an end, some of us, who had embarked on a new journey of creating a new thought within our industry, feel vindicated. The key changes that we had envisaged, envisioned and expected are taking place rapidly within our media & entertainment (M&E) environment. These changes are in terms of distribution platforms, newer business models, interactivity, new content formats and experimentation. This piece looks at the change catalysts and an outlook on how things would continue to develop within our space.

    End of distribution platform insulation

    Before we look at the current and future, a quick glance at the past. The history of TVs popularity among consumers can be gauged from the amount of advertising on satellite TV chasing consumers. As veteran industry folk would recall, the early 90s was all about DD when only experimental advertising monies would come onto satellite channels. In the mid-90s substantial chunks of budgets were diverted into satellite channels. By the late 90s and early 2000s, the satellite TV environment had reached a level of stability and maturity. Here’s where the story takes an interesting u-turn. The legislation changed and allowed newer distribution technologies on the scene. These new technologies ended the technology insulation that persisted in India vis-?-vis other Asian markets like Hong Kong, Korea and Japan.

    Distribution: set to change the ground rules

    Globally, whenever distribution channels explode, it sets off a chain reaction in terms of market segmentation, newer revenue opportunities, newer pricing models. The hectic activities since early 2000 to present day on laying cables, dishes, optical fibre, upgrading cable facilities, are today creating competition among satellite TV platforms such as DTH, HITS, IPTV, CAS, and even traditional cable.

     

    Creating the ‘Long Tail’

    For those who have read Chris Anderson’s book The Long Tail: Why the Future of Business is Selling Less of More (2006) would immediately associate that phenomenon with what’s happening with our television today. The Long Tail phenomenon occurs when distribution platforms become very large helping the smaller products collectively gain market share rivaling that of market leaders!

    The TV business has been growing a long tail as niche content offerings are getting acceptance in small pockets. Take the example of television news. Already, the kids channels are going the same way as the news channels. Animated, non-animated, teens, tweens, pre-teens! The good news – each of the niche segments that have been launched has shown Viewership.

    If the current trend continues and if distribution platforms get more and more addressable, one can imagine channels aimed at extremely niche communities. Surgeon’s channel, lawyers channel, chartered accountants channel to weather news channel, celeb news channel to even a Mumbai traffic channel! Considering that some of these formats exist in other economies expecting that in our environment seems fairly reasonable.

    Specialization to Segmentation

    The specialization in this industry is already segmenting the market. Groups of consumers who are watching specialist programming are extending the long tail of content. The specialist content has an impact on TV programmers and the TV production houses as resistance to experimentation could lead to certain death or marginalization. This impact should mostly be felt immediately post the universe adjustments of the TV ratings panels to latest estimates.

    Applications, on-demand

    Our environment is also critically poised to propel demand for applications that satiate this new consumer thirst for content which is typically instant and on-demand. Considering that for a bulk of Indian consumers, TV-watching emerges in the Top-5 daily activities, it’s not impossible to imagine the lengths to which consumers could go to better that experience. Gadgets like Digital Video Recorders (DVRs), Video on Demand (VoD), Personal Video Recorders (PVRs) can do exactly this if the pricing gets it right.

    Content mobility, malleability

    The consumer need for on-demand content in other Asian markets has made content both mobile and malleable. Content mobility is to do with being able to record and transfer content off television onto your phone, laptop or desktop. The last few months I have been an amazed, animated user of Bluetooth and the possibilities that emerge from being able to transfer data, music, and video from one device to another. Content malleability is something that TV, music and film companies would have to learn else the consumer is going to teach them a thing or two!

    Newer contact points via localization

    The newspaper business in the last 3 years has been growing faster on ad revenues than television. It’s done so on the back of distribution changes and reform that has resulted into micro editions. That has in turn propelled localized advertising through a slew of first time advertisers on print. The same is bound to happen to television. The only question is the timeframe. Local pizza stores, restaurants, banks, grocery and electronic retail, multiplexes would all jump in if micro-reach was possible via TV. It’s not as if all that is not possible today via local cable and regional stations. It’s possible and it’s happening. But while regional channels still score, there are questions on quality and popularity of local cable advertising.

    Branded Entertainment : winds blow stronger

    The Branded Entertainment Awards 2006 held in Mumbai have demonstrated a new industry-wide vision in this space. The promise that this specialist stream holds is that in a perpetually fragmenting media scene, TV could be used via innovation, integration and multimedia support. Activation is the powerful new word in this area and it’s expected to be initiated by regional channels. Activation would derive tremendous strength either from channels promising micro-reach or distribution platforms undertaking sampling/ contact programs. One of my recent favorites is a DTH company distributing sample set-top boxes to school children preloaded with education channels!

    Distant possibilities

    What seems to be now distant in our market but is very prevalent in the West and some parts of Asia is CGM or Consumer Generated Media (such as Blogs, and home or personal videos). This is a current rage even in the US if one is to see the popularity of sites such as YouTube. Low penetration of capture devices in India would typically see this as fairly futuristic. Having said that we are seeing news channels in India currently test this through Viewer reported stories.

    Finally in conclusion – expect key changes in television that’s bound to affect all stakeholders. These changes are expected to alter business models, revenue models as well as content formats.

    And the creatures aren’t too far away from us now. Stop! I hear the door creaking open. Wait! I can hear them growl…

  • ‘Cable ARPUs in Cas areas to touch Rs 400 in five years’ : Jagjit Singh Kohli

    ‘Cable ARPUs in Cas areas to touch Rs 400 in five years’ : Jagjit Singh Kohli

    Subhash Chandra is betting big on his cable TV business. Wire & Wireless Ltd (WWIL), the demerged entity of Zee Group, plans to invest Rs 7.14 billion over two years. A major chunk of this will be consumed by set-top boxes (Rs 3.28 billion) and customer acquisition (Rs 1.14 billion) as he attempts to hold grip in the distribution business.

     

    When WWIL gets listed sometime in January-February, investors will have a touch and feel of the valuation that cable business will enjoy in the digital era.

     

    Launching the aggressive drive, WWIL CEO Jagjit Singh Kohli says he has ramped up 250,000 customers at an average valuation pegged at Rs 2000 per subscriber. The ambitious target in year five: 9.6 million.

     

    In an interview with Indiantelevision.com’s Sibabrata Das, Kohli elaborates on the steps WWIL is taking to emerge as a leading multi-system operator (MSO) with plans to launch Headend-In-The-Sky (HITS) and STBs that have internet and VoIP (Voice over Internet Protocol) capabilities.

     

    Excerpts:

    Is WWIL close to roping in a strategic investor?

    We are in talks with both strategic as well as financial investors. They have shown interest in our business. We would go with anybody who gives us the maximum valuation.

    What is the valuation WWIL is now getting?

    The investors are discussing of valuations in the range beyond $600 million. Our expectations are higher. We are likely to get listed by mid-January or early February. The true valuations will come out then.

    Are investors valuing the cable TV business based on the number of subscribers or future revenues?

    In India, it is too early for a subscriber-based valuation. Investors are using the discounted cash flow method. The valuations are obviously based on our future target of touching 9.6 million subscribers. There are two reasons why we will get valued more: we are doing Headend-In-The-Sky (HITS) and we are using set-top boxes (STBs) designed by Pacenet which will offer multiple usages like internet and VoIP (Voice over Internet Protocol).

    MSOs will have to make major investments on STBs. Is it going to comprise as high as 46 per cent of your overall investments?

    We are planning to invest Rs 7.14 billion in the business over two years. For STBs, our fund requirement could be Rs 3.28 billion. We are planning to pump in Rs 2.21 billion towards hardware. Another area where we will be aggressive is customer acquisition. We plan to put in Rs 1.14 billion for this.

    What is the debt to equity ratio and how are you meeting the initial fund requirement?

    The ratio will be firmed up once we know the price WWIL quotes after getting listed in the exchange. That in a way will determine how much debt component we would require to raise. Our initial fund requirement is Rs 5 billion. We have lined up a debt of Rs 2.15 billion. We have already got Rs 500 million from Infrastructure Development Finance Corporation (IDFC).

    WWIL is on a drive to acquire customers. What is the price of acquisition?

    We are offering to cable operators a valuation of Rs 2000-3000 per subscriber. While WWIL will be a 51 per cent partner, the balance 49 per cent will be with the operators. We have already ramped up 250,000 subscribers in recent months through aggressive acquisitions.

    What is the average valuation for acquiring 250,000 subscribers?

    The average valuation works out to Rs 2000 per subscriber.

    Won’t you have to handle too many operators by doing JVs with them?

    We are making proposals to networks with decent size. In Mumbai, for instance, 12 local operators are creating a company and entering into a JV with us. We want to reduce the number of JVs. Otherwise, it will be impossible to manage.

     

    In some of our acquisition models, we make MSOs buy out the local cable operators.

     

    We have set a target of ramping up our direct subsciber base to 9.6 million within five years. We expect 7.6 million to receive digital cable. Our aim is to have 4.4 million through our own digital cable service and an additional 3.2 million through our HITS platform. We will have two million through analogue acquisitions. We have expanded operations from 35 to 43 cities. We plan to be in 66 cities in three years.

    WWIL has a thin presence in Mumbai. Even in the lucrative market of South Mumbai, which is a Cas notified area, you have a negligible presence. What are you doing to correct this?

    We have linked up optic fibre and have commissioned a digital headend a few days back at Worli. We will be in the Cas notified area of south Mumbai and several operators from rival MSOs are joining us. We have acquired control over 5 Star which operates in Andheri, a western suburb of Mumbai. We have also poached a few operators from Incablenet in Andheri East and others from rival MSOs are joining us.
    ‘The average valuation of acquiring 250,000 customers works out to Rs 2000 per subscriber.‘

    How are you expanding your footprint in Delhi?

    In Delhi, we have acquired a 51 per cent stake in Satellite Channels. We have also signed up with Spectranet and Sanjay Cable Network. All these MSOs were disqualified for Cas as they were found not ready by the Telecom Regulatory Authority of India (Trai) for making the switchover to addressable system by 31 December. As for Kolkata, we are very much a dominant player after buying out Indian Cable Net (formerly RPG Netcom), a leading MSO, in May 2005.

    What is the price of the STBs?

    While the cost of the basic box is Rs 2000, the one with internet is Rs 2500 and internet plus VoIP Rs 3000. Customers can enjoy interactive games and online share trading through this. We are looking at a monthly fee of Rs 70 for internet and Rs 75-100 for movie-on-demand. Subscribers will have to pay Rs 1499 as deposit and Rs 45 as monthly rent. We haven’t, though, arrived at the final pricing. We plan to introduce the internet-enabled boxes after two months and those with VoIP sometime in April.

    Who are your STB vendors?

    We have Korean and Chinese vendors who will be supplying us the boxes. We have also ordered 200000 STBs from Bharat Electronics Limited (BEL).

    Earlier, in 2003 when Cas was to be introduced, Pacenet had ordered STBs from TVS Electronics. Why haven’t you included them in the list?

    We are also considering them. But at this stage it makes more business sense to import the boxes.

    Were you doing some tests with BSNL for VoIP?

    We were testing out whether our technology would work on BSNL’s network. The tests were successful.

    Is WWIL serious on launching a HITS platform or is it a mere hype?

    We are going to do HITS and have expressed our intent to broadcasters. This will provide us a national footprint and hasten the pace for digitisation in the country. We can tap cable operators even in places where WWIL has no presence. We have booked four transponders on Thaicom satellite with effect from 1 January, with the option of taking three more. We plan to launch HITS before the end of February.

    Do you see ARPUs (average revenue per user) falling in a Cas regime?

    For one year, it may come down. Let us not forget that cable TV rates have been suppressed for artificial reasons for too long. But by deploying STBs, this scenario is going to change. We may start off with an ARPU of Rs 250 per month, but like in case of cinema theatres with the launch of multiplexes, this will go up. By year five, we may be looking at ARPUs in the region of Rs 400.

    Hathway Cable & Datacom has come out with bouquet packages along with the a la carte choices. Will you offer something similar?

    We will be introducing a combo package where consumers who buy STBs on outright purchase and take annual subscription will be offered an attractive subsidy. This scheme will make available 100 TV channels. We will be offering under this at least 20 pay channels. We will be subsiding the boxes.

    Unlike DTH, broadcasters will have to make their pay channels available on an a la carte basis at a maximum rate of Rs 5 on cable networks in Cas areas. Will this mean that they will do content deals where they give their bouquets to MSOs at lower cost than to DTH service providers? Otherwise, MSOs can create bouquets picking and choosing the best channels and dumping the weaker ones in the bouquet.

    Yes. If broadcasters don’t do that, they will always be faced with the dilemma that the MSOs can pick and choose the stronger channels in their bouquet while ignoring the rest. The other reason why we should get better costs than DTH is because we have to share the revenue with the distributors and local cable operators across the value chain.

    How does cable compare with telecom operators in triple play service?

    Indian cable systems are ready to do telephony. They have pipes already laid including ethernet. The cable architecture throughout the country is in a position to provide triple play. All that is required is the box and IP can provide the return path for voice, data and interactive services.

     

    The public sector telcos, on the other hand, require strong compression technologies and ADSL2+ signals are good only for distances up to 1.5 km. The private sector telcos do not have a system suitable for large scale deployment and will require a high capital cost of $300 per line, even if we take the fact that their network is ready for IPTV (which is not the case). IPTV could have happened in markets where ARPUs are high. But India is not a high ARPU market.
  • WWIL lines up Rs 2 billion debt, rebrands digital cable as Galaxzee

    WWIL lines up Rs 2 billion debt, rebrands digital cable as Galaxzee

    MUMBAI: Zee Network’s Wire & Wireless India Ltd. (WWIL) is in the process of lining up a debt of Rs 2 billion for funding its digital initiatives and acquisition of cable operators.

    “We have already got Rs 500 million from Infrastructure Development Finance Corporation (IDFC). We are already in the process of tieing up a debt of Rs 2 billion,” WWIL CEO Jagjit Singh Kohli tells Indiantelevision.com.

    The company plans to invest Rs 7.40 billion over two years and Rs 8.50 billion within five years. “The debt to equity ratio will be firmed up once we know the price it quotes after getting listed in the exchange by February-March 2007. That in a way will determine how much debt component we will require to raise,” Kohli says.

    The company is in talks with strategic and financial investors but conclusive agreement will take place only after the listing. “We are not necessarily looking at a strategic investor. We want somebody who will give us the maximum valuation,” Kohli says.

    WWIL, the de-merged entity of Zee Telefilms’ cable TV business, has set an ambitious target of ramping up its direct subsciber base to 9.6 million within five years. “We expect 7.6 million to receive digital cable. Our aim is to have 4.4 million through our own digital cable service and an additional 3.2 million through our Headend-In-The-Sky (HITS) platform. We will have two million through analogue acquisitions,” says Kohli.

    WWIL claims to have added 250,000 subscribers in recent months through aggressive acquisitions. The multi-system operator (MSO) has also expanded operations from 35 to 43 cities. “We plan to be in 66 cities in three years,” Kohli says.

    WWIL will deploy several models of set-top boxes (STBs) aimed at various subscribers. Apart from the basic box, it plans to introduce a STB which will enable internet facilities on TV. “Customers can enjoy interactive games and online share trading through this. We are looking at a monthly fee of Rs 70 for internet and Rs 75-100 for movie-on-demand. Subscribers will have to pay Rs 1499 as deposit and Rs 45 as monthly rent. We haven’t, though, arrived at the final pricing. We plan to introduce these boxes after two months,” says Kohli.

    The basic STB is available on a refundable deposit of Rs 250 and rent of Rs 45 per month or a refundable deposit of Rs 999 with a monthly rent of Rs 30.

    WWIL will also deploy a STB through which it can offer VoIP (Voice over Internet Protocol) sometime in April, according to Kohli. The MSO is also poised to offer HITS which will enable it to tap cable operators at a national level even in places where WWIL has no presence, he adds.

    GalaxZee will be the brand under which WWIL will offer its digital cable service. “We have commissioned a digital headend two days back at Worli. We will be in the Cas (conditional access system) notified area of south Mumbai and several operators from rival MSOs are joining us,” Kohli says.