ITV

Tag: HITS

  • Neo Sports’ Mautik Tolia opens up on the Impact of DAS

    Neo Sports’ Mautik Tolia opens up on the Impact of DAS

    DAS (digital addressable system) is here to stay. Despite the shortcomings, the hiccups in the implementation of the first two phases, the government has announced that it will not extend the deadlines of December 31, 2015 for phase III areas and December 31, 2016 for phase IV, when the entire country is expected to be digitised. After complete switchover, cable TV services will be available only through set top boxes in India.

     
    We, at the Indiantelevision.com are starting a new section – ‘The Impact of DAS’ through which thought leaders, experts from the television ecosystem will share their thoughts, ideas, and say their piece on the subject. We are beginning with the impact of DAS on the sports broadcasting ecosystem. 

     
    Our expert for the section is Neo Sports EVP programming Mautik Tolia.

     

    Excerpts:

     

    How big an impact has phase I and II digitization made when it comes to subscription revenue?

     

    Digitization has been a big step forward not just in terms of revenue but in providing secular access to viewers to more sports events, apart from just cricket. As India moves more and more to a multi-sport fan universe, digitization will continue to play in important role in increasing the popularity of all sports. Combined with the increasing market share of DTH platforms, which in turn enhances the reach of sports networks without whimsical interruptions (which were a constant feature in the analog domain) we at neo sports see other sports climbing to a 40 per cent share of revenue universe in 3 years time.

     

    From sports broadcaster’s point of view are you happy with the two phases of digitization?

     

    Doubtless there have been roll out issues and delays in implementation but on balance digitization has been a positive. It will be some time before more sophistication is achieved in packages and tiers, which will steadily take us to a CPS billing norm. Transparency in billing remains a challenge but we believe that too will be resolved in the next 2-3 years.

     

    Is the sports broadcasting industry in a subscription positive scenario? Or we are still ad dependent?

     

    From a 90:10 ad: subscription ratio 10 years back, the sports broadcast industry has probably moved to a 70:30 maybe even 65:35 ratio. This may even be 60:40 or 55:45 in the case of some networks. Due to significant ad spend on cricket, especially IPL this ratio will inch its way to maybe 50:50 in 3 years for the industry as a whole.

     

    Are sports like Football, Badminton which are hugely popular but have very little room for advertisement profitable assets for broadcasters?

     

    Aside of Cricket, the dominant sports are football, tennis, golf, hockey, badminton and motor sport. Except for Football and Badmnton, others have adequate ad break potential. At Neo Sports we believe that it is more a question of focus, ability and experience when it comes to monetizing sports other than cricket.

     

    With phase III and IV scheduled do you see a substantial inclination in subscription revenue?

     

    We see further momentum in subscription revenues, reach and secular access for all sports in phase 3 and 4.

     

    How can a non cricket sport or a sport with least ad room turn profitable for broadcasters in India?

     

    The profitability conundrum is more a function of irrational acquisition prices and lack of focus on monetizing all sports. We have seen at least one sports broadcaster recently pay over the top for rights that were being jettisoned by another and for which there may well have been no other takers. Ill informed and panic buying has resulted in lack of profitability for some. At Neo Sports we believe that intense discipline is required both with acquisitions as well as in monetizing assets. Wise spending may not make a sports broadcaster no 1 but there are plenty of sports rights constantly available, the universe of sports fans is rapidly expanding, advertisers are increasingly willing to spend on sports other than cricket and affiliate platforms understand that tens of millions of viewers are tuning into other sports – hence there is room for multiple sports networks and increasing opportunity for revenue and viewership expansion.

  • Hinduja Group’s HITS to be available on Thaicom 7

    Hinduja Group’s HITS to be available on Thaicom 7

    MUMBAI: Thaicom, one of Asia’s leading satellite operators, announced that its Thaicom 7 satellite is fully booked following an order from Grant Investrade Ltd (GIL).
     

    GIL. a subsidiary of Hinduja Ventures Ltd, confirmed the order for the C-band transponders on the satellite, which it will use to provide digital cable TV services through its Headend-In-The-Sky (HITS) system.
     

    The HITS service, branded Nxt Digital, will help the distribution fraternity smoothly transition to digital and allow customers to choose channels through a satellite multiplex across India.
     

    “It is one of India’s national missions to roll out Digital Addressable Systems (DAS) of broadcasting all over the country and we believe ‘Nxt Digital’ is a significant step towards this goal,” said GIL, MD Tony D’Silva. “Thaicom is a trusted and experienced satellite provider which has played a vital role in this initiative and the substantial number of satellite transponders we have at the time of launch will continue to grow as we expand our portfolio.”

     

    “We are proud to be able to contribute to India’s broadcast and media development and thank our Indian partners for their trust in us. This latest deal is particularly exciting for Thaicom as it marks an important milestone for us, not only in regards to Thaicom 7 now being 100 percent booked, but also in bringing our platform for content distribution to India which sets us in good stead for the launch of Thaicom 8,” said Thaicom CEO Paiboon Panuwattanawong.

     

    Castle Media has been appointed as the technology program manager for Nxt Digital. It has been tasked with the design-to-delivery of the HITS service including setting up a state-of-the-art next generation broadcast facility and a robust back-end facility for SMS, CRM, Billing, CAS and other mission critical components and services.
     

    “Thaicom 7 being a recently launched satellite exhibits strong parameters to facilitate a high-quality digital HITS service in India. We’ll continue to work closely with Thaicom to upscale our transponder requirements as our business grows over the next few years, on the back of a strong push by the government to make India a digital nation,” Castle Media ED Vynsley Fernandes added in parting.

     

     

     

  • Will foreigners buy into easing of FDI in cable TV, DTH?

    Will foreigners buy into easing of FDI in cable TV, DTH?

    MUMBAI: The government has earlier this week announced the lifting of Foreign Direct Investment (FDI) barriers for 15 sectors as a Diwali bonus to industry.

     

    Hereon, the limit for uplinking of news and current affairs for television channels has been increased from 26 per cent to 49 per cent. Foreign majors wanting to look at a long term play in the broadcast distribution space can now pump in 100 per cent in cable TV networks (multi-system operators and local cable operators), DTH, teleport, headend-in-the-sky (HITS) and mobile TV ventures as against the 74 per cent earlier Distribution platforms can raise as much as 49 per cent FDI through the automatic route. If companies want to go beyond that, they will need government approval. The radio sector has got some welcome breathing space in that investment limits have been hoicked to 49 per cent from 26 per cent earlier.

     

    What does this all mean for the television ecosystem? Will there be a flood of money flowing into cable TV, DTH, teleport, HITS and mobile TV ventures from overseas? Will news channels attract foreign investment by the sackful?

     

    We, at indiantelevision.com, believe that none of this likely to happen in a hurry in all the segments that have been prised open.

     

    Distribution is a tough play in India as history has shown. It is relatively unorganized, with low ARPUs, it lacks transparency, is small in scale, and is short on capital, which makes it an unappealing asset to invest in. Digitisation of cable TV has led to some improvement, but it is still a halfway house. The lack of last mile customer ownership, paucity of subscriber information, lack of two way addressability, and business norms and ethics make it a relatively high risk investment.

     

    Things may change if Reliance Jio makes inroads into cable TV and brings some order into it. However, its management may well discover that distribution is like a slippery soap in a shower, that  it is more complicated than distributing electricity or exploring and drilling for oil.
     

     

    It is the MSOs’ broadband businesses that are a lot more transparent,  that have in any case been spun off into separate companies keeping in mind government regulations and restrictions.  And this is what may catch the interest of investors.

     
    In the nineties, Rupert Murdoch partnered with Subhash Chandra in Siticable – only to exit a little later with his knuckles bruised. A few years later he once again took a shot at it when Star India invested in the Rajan Raheja promoted Hathway Cable & Datacom. Once again, he had to exit yelping in pain. Since then, Star has been extremely averse to investing in cable TV.

     Most of the major distribution ventures are listed: Siticable, Hathway Cable & Datacom, Ortel, Hinduja, Den Cable, SunTV, DishTV, Airtel, Reliance Big (the management is currently getting it delisted),  and some even have attracted private equity investments. But the stock market has not really bought into pure play distribution initiatives and the shares have been depressed as compared to the prices they could command. The PEs which have parked funds in them are still waiting for a nice fat return on their investments.

     Where FDI has worked is in the DTH space and the sole exception is DTH operator Tata Sky in which Twenty First Century Corp holds a 30 per cent stake.  Then there is Videocon d2h, which is listed on Nasdaq, following to the support of its lead investment partner Harry Sloan of Silver Eagle. The Essel group owned Dish TV has got the thumbs up from the market and has got a buy recommendation from many research firms.

     
     
    DTH operators, unlike their cousins on the ground, are more organized, professional, have transparency of operations and have recently started getting some payback from their upfront and cumulative investments over the past decade or so building scale in their customer base.

     
    Hence, it is quite possible that Dish TV, Airtel, Videocon, and Tata Sky might see some activity following the loosening of FDI.  But even prior to the announcement, not many investor suitors had lined up looking to partner with them.

    At the time of writing this report, the stock markets had reacted positively to the news about the easing of FDI in media, and had pushed up the share prices of Dish, Siticable, DEN Networks by 10 per cent plus before Diwali.

     Sun TV, has so far been happy being a lone player with a stranglehold on its markets, and has desisted from partnerships with local players. One does not know if promoters Kalanithi and Kaveri Maran will change their thinking now.

     As far as news is concerned, major news organisations worldwide have enough on their hands. They are grappling with the changing paradigm of news gathering and dissemination, courtesy the explosion in social media and their live streaming apps which threaten to make individuals  – whether journalists or online stars – with huge followings, a rival to large news networks. For the new millennials, online is the preferred source of news, which they consume on their twitter or facebook timelines.

     India has a surfeit of news channels or ‘views channels’; many of them are run for purposes of influence, and not as commercial initiatives. For the relatively more professional ones, the key question is whether foreign investors – especially those in the news business would be happy with a less- than majority equity position in a news television channel. For that to appear attractive they will look for dividends or a northward movement in the stock price.
     

     
    News organizations normally are obsessive about keeping control over the content on a news channel. But you there have had been licensing deals – like in the case of CNN-IBN.  Others have come in on their own, after getting downlinking and uplinking clearances.

     

    It’s not as if news television in India is a very scalable business opportunity.  At least, so far. The largest news network does revenues of around Rs 500 crore.  This could go up to Rs 1000 crore with the expansion in regional news and distribution internationally. The limited scalability despite, amongst the news players some of whom look alluring figure: NDTV, Times Now, Zee Media, TV9, TV Today, ITV group, and  India TV. Of course some smaller players like BAG Films E24 group might attract FDI.

     

     What should come as a relief is the allowing of 100 per cent FDI through the automatic route in non-news and current affairs channels. Many new channels and broadcast networks which are looking  to expand their global footprint to include the Indian audience may now do so, either through mass and/or niche channels. Full ownership means they can control their destinies in India.
     
    Now that the government has opened its house on FDI in media, it would do well by making the procedures simpler and faster. TV broadcast players managements have to perforce get ministry of home affairs, ministry of information and broadcasting’s  and RBI’s clearances. The  bureaucrats,  directors and officers in these bodies need to be trained to reflect the Modi government’s approach in being industry enabling, rather than being obstructionist. Maybe a single window clearance approach could help. Otherwise, even this FDI liberalization may end up being another well-intended-but-misplaced initiative.

     

  • NAGRA powers Hinduja’s NXT Digital HITS platform in India

    NAGRA powers Hinduja’s NXT Digital HITS platform in India

    MUMBAI: Switzerland based Kudelski Group’s digital TV division NAGRA has powered the Hinduja Group’s new headend-in-the-sky (HITS) platform – NXT Digital in India.

     

    NAGRA’s anyCAST, OpenTV solutions and user interface are enabling NXT Digital. This makes it NAGRA’s first HITS platform in India, which is one of the fastest growing markets in pay-TV today, as the country continues the government-mandated digitisation process. According to a recent report by Media Partners Asia, the Indian pay-TV market is expected to grow by 11 per cent annually on average by 2018, with total pay-TV subscribers expected to grow from 65 million in 2013 to 165 million by 2018 and 180 million by 2023.

     

    NAGRA’s anyCAST content protection and OpenTV middleware solutions are enabling the HITS platform, which will provide backend operations to local and multi-system cable operators in India. NXT Digital offers a variety of packages and services including 500-plus MPEG 4-encrypted services featuring SD and HD channels along with value-added services like PVR and educational content.

     

    “Our new HITS platform gives regional cable operators access to an infrastructure that helps them deliver high-quality video services to a new generation of viewers. NAGRA has been a key partner in the process, providing the expertise and support expected of a pay-TV leader, as well as solutions that provide the right level of content protection, scale seamlessly and allow for flexible business models that are critical to our operators’ success as they kick off their new services,” said Hinduja Group subsidiary Grant Investrade managing director Tony D’Silva.

     

    “It is an honor to work with Grant Investrade and be a part of the digital TV transformation in India that is making access to digital TV services a reality for millions of people. This new platform makes it easy for local and regional cable operators to deploy new services without having to worry about the operational complexities that can come with installing their own system. And by leveraging NAGRA’s deployed, market-leading solutions, they are ensuring a high quality user experience that is not only highly secure but offers pay-as-you-grow models adapted to their strategy,” said NAGRA sales SVP Asia-Pacific Jean-Luc Jezouin.

     

    NAGRA’s anyCAST Security Services Platform, OpenTV middleware and user interface are ready-to-deploy solutions that enable of range of entry-level and advanced DTV services. They allow operators to leverage scalable, pay-as-you-grow business models with multiple set-top boxes and chipsets, and include an intuitive user interface adapted to India’s diverse population and languages.

  • Pay channel’s a la carte rate to not exceed two times its RIO rate: TRAI

    Pay channel’s a la carte rate to not exceed two times its RIO rate: TRAI

    NEW DELHI: The Telecom Regulatory Authority of India (TRAI) today said that the a la carte rate of a pay channel forming part of a bouquet offered by any digital platform should not exceed two times its RIO order rate offered by the broadcaster for addressable systems.

     

    TRAI also said that the sum of a la carte rates of all channels in the bouquet should not exceed three times the bouquet rate. 

     

    This applies to all multi-system operators (MSOs), direct to home (DTH) operators, internet protocol service (ISP) providers and Headend in the Sky (HITS) operators providing broadcasting services or cable service to its subscribers using a digital addressable system (DAS) and offers pay channels or pay and free-to-air (FTA) channels as part of a bouquet.

     

    These provisions are contained in the draft Telecommunication (Broadcasting and Cable) Services (fourth) (Addressable Systems) Tariff (Amendment order), 2015 that TRAI has prepared consequent to an order of the Telecom Disputes Settlement and Arbitration Tribunal (TDSAT) of 13 July.

     

    TRAI has also given the definitions of RIO and RIO rates in the draft, to which comments can be filed by 14 October with counter-comments if any, by 21 October.

     

    TRAI defines “RIO” as Reference Interconnect Offer published by a service provider specifying terms and conditions on which other service providers may seek interconnection from the service provider making the offer. On the other hand, “RIO rate” is the rate specified by the service provider in its Reference Interconnect Offer.

     

    The a-la-carte rates of all the channels offered by the service provider should be same for all the bouquet of channels formed by the service provider.

     

    The matter had gone to TDSAT as some platforms had objected to the “twin conditions” that were prescribed at retail level pricing of TV broadcasting services in order to link the a-la carte rates of channels to the bouquet rates in the Tariff order of 20 September, 2013.

     

    TDSAT, while disposing off the appeal vide its order of 13 July, stated that the Authority will consider the concerns of the appellants and take a final decision on the matter within four months from the date of the order.

  • NXT Digital ‘hits’ Indian market with total outlay of Rs 5000 crore

    NXT Digital ‘hits’ Indian market with total outlay of Rs 5000 crore

    NEW DELHI : After three and half years of struggle, Hinduja’s Headend In The Sky (HITS) platform NXT Digital finally got rolling with a total project outlay of approximately Rs 5000 crore. The mammoth investment will be utilised as the business continues to design and develop new products and services for a growing customer base as well as strive to enhance its own standards.

     

    Information and Broadcasting Minister Arun Jaitley officially launched the venture in the presence of Hinduja Group chairmanAshok Hinduja and Grant Investrade MD Tony D’Silva.

     

    Launching the platform, Jaitley said, “Multiple carriage technologies will provide customers more choice as to which technology platform to choose.”

     

    While Hinduja Ventures has set an initial budget of Rs 5000 crore for the project, the chairman is open to investing more if necessary. “We are here to aggressively back this initiative and if necessary we will invest double or triple the allocated budget. Last mile operators (LMOs) are the one who started the business by laying the first cable and this venture is for them,” Hinduja said.

     

    The HITS project will not only facilitate over 100 million homes go digital in Phase III & IV digitisation markets but will also raise the standards of quality of service. 

     

    To acquire the base model of a Cable Operators Premises Equipment (COPE), one has to pay Rs 10.60 lakh while the premium one can be acquired after a payment of Rs 14 lakh. The amount appears high for the LMOs but Hinduja said that the Group also has a finance group, which would help the LMOs. “The project has a lot of securities and the investment is certain to provide returns so it is a safe investment. We have insurance schemes for the operators so their investment is safe,” he added.

     

    According to D’Silva, the consumer will have to pay a maximum of Rs 50 per month. NXT Digital is presently equipped to beam up to 500 channels and this capacity can be raised to 1000. The earth station is in Sector 62 in Noida in the National Capital Region (NCR) of Delhi. NXT Digital has six transponders at present.

     

    D’Silva also noted that it was interesting that the last two phases of Digital Addressable Cable TV System (DAS) provided for only 32 per cent of the revenue though they would cover a much larger area.

     

    The DAS Phase III and IV areas, which are estimated to have more than 120 million home, are the prime focus of NXT Digital. To succeed in occupying 15 per cent of the market, the company will have to provide set top boxes (STBs) to 20 million home, which is a huge demand to supply. However, Hinduja is bullish about meeting the demand on time and optimistic that the platform will not face a situation where there will be shortage of boxes.

     

    NXT Digital is also positioning itself as a adopter of the government’s Make in India, Digital India and Skill India initiatives, which according to Hinduja was the byword for the Group. The LMOs in the DAS III and IV areas have to be skilfully equipped with modern technologies that NXT Digital will be bringing in.

     

    Asked about how his system was different from the already existing – NSTPL’s JainHits – Hinduja said that the aim of the Hinduja Group was to protect the LCOs because it was they who had built this industry in the late eighties. “Therefore, the LMO will not lose out in any way, will be fully in charge of his own company, and will have full freedom to operate in his own way,” he said.

     

    When queried as to why it had taken the Group three years to get a licence when there was no cap on HITS, Hinduja said, “Formalities take time.”

     

    He also said that wherever someone tries to bring in transparency in any system, there are objections. He was also conscious that there was competition in the field and this may even lead to some legal hassles, but his Group was prepared for everything.

     

    Hinduja said that he was conscious of the matter relating to NSTPL pending in TDSAT, which sought that broadcasters treat HITS players at par with multi system operators (MSOs). He said the NXT Digital viewpoint had been presented at the hearings.

     

    Senior Hinduja executive Aubin Das said that the NXT Digital platform also took efforts to curb the issue of piracy and if LMOs attempt to put on the channel of a broadcaster in the slots meant for local channels, it could be immediately traced and stopped.

     

    Commenting on the training and development initiatives Castlemedia director Vynsley Fernandes said, “We are travelling to every nook and corner of the country to skilfully equip and train people about our technological upliftment and it is a chain system. Around 200 people have been trained under a ‘Train the Trainer’ programme and they will train others. And we are not equipping them only about NXT Digital we are introducing them to the next generation.”

     

    D’Silva said that under NXT Digital, the LMO gets to continue their ownership, enter into broadcasting deals, do packaging and pricing according to market demands, acquire STBs at cheaper rates, run up to 16 local channels, and compete with direct-to-home (DTH) operators.

     

    He added that DTH was on Ku-Band, which got disturbed in rainy or inclement weather, but HITS being on C-Band will not be disturbed. Furthermore, the HITS headend was on ground while DTH had to depend on satellites. Furthermore, NXT Digital will be able to service both DAS and non-DAS areas.

     

    NXT Digital focused marketing and subscription drive in the Phase III & IV markets. The company has so far travelled across 400 districts in 20 states to contact and inform the cable fraternity there about its offerings. As of now it has 14 vans touring various parts of the country to give live demonstrations to LMOs and LCOs. 

      

    Welcoming the move, Maharashtra Cable Operators Federation president and task force member Arvind Prabhu said, “I would like to congratulate AP Hinduja, with this initiative he actually kickstarts the process of digitisation. Mr Hinduja thought about the last mile operators and came up with NXT Digital, which will help LCOs getting their due. The other HITS platform is providing the COPE at a cheaper price and that will be a challenge. The pricing that we got from them are really good but considering the fact that DAS III and DAS IV areas do not come under ratings I believe there can be further negotiation with the broadcaster. Overall I believe it’s a move for the LCOs.”

     

    LCO from Assam and Task Force member Md Iquebal Ahmed also welcomed the HITS venture. “Operators cannot afford headends and MSOs take total advantage of it and in that context, it’s a great initiative. But the content pricing needs to come out transparently. Affordable pricing is what we are looking forward to.”

     

  • Hinduja Ventures’ NXT Digital receives operating licence for HITS

    Hinduja Ventures’ NXT Digital receives operating licence for HITS

    MUMBAI: Grant Investrade Limited (GIL), a subsidiary of Hinduja Ventures, has crossed the final hurdle to start operations of NXT Digital – its headend in the sky (HITS) service. The company has received Wireless Operating License (WOL) from the Wireless Planning & Coordination Wing of the Ministry of Information & Communications Technology.

     

    The WOL is the final regulatory step before making HITS operational, in accordance with the terms and conditions stipulated in the Letter of Intent (LOI) issued by the Ministry of Information & Broadcasting to GIL last year.

     

    “We are delighted to confirm receipt of the WOL for us to commence operationalisation of the HITS service in India. The launch of NXT Digital is in line with the Government’s objective of making India ‘digital’ and we’re proud to be a part of this national initiative,” said GIL chairman AK Das.

     

    “NXT Digital has received an overwhelming response from the distribution fraternity in Phase III & IV markets in India. Our broadcast centre and our backend systems are fully operational; our broadcaster relationships have been formalised, we’ve already rolled out our COPE mini-headend systems and STBs and we’re ready to go ‘live’ shortly,” added GIL managing director Tony D’Silva.

     

    It may be recalled that the government recently ruled out the extension of the DAS phase III deadline of 31 December, 2015. In view of this, NXT Digital is being viewed as the enabler for the cable fraternity go digital as per government mandated standards and within the deadline.

     

     

  • Q1-2016: Cable TV in India – Sequential quarter revenues down, broadband shines

    Q1-2016: Cable TV in India – Sequential quarter revenues down, broadband shines

    Indian Cable TV is a long haul work-in-progress is what we had said last quarter. The results of the four sample companies in the quarter ended 30 June, 2015 (Q1-2016) in that report seem to endorse this fact. All four companies comprising the big three – Hathway Cable and Datacom Limited, Den Networks Ltd, Siti Cable Network Limited and the minnow – Ortel Communication Limited reported a quarter on quarter (QoQ) drop in total income from operations (TIO or revenue) in the current quarter. As expected, broadband subscribers and revenue continues to grow.

    Note: (1) 100,00,000 = 100 lakh = 10 million = 1 crore.

    (2) Some figures are approximate.

    (3) Generally other income has not been factored in for EBIDTA figures in the report.

    Performance

    Though Den Networks’ and Hathway’s YoY results in the current quarter deteriorated, QoQ, both performed better, albeit both the cable companies reported losses. Siti Cable’s loss in Q1-2016 increased YoY and QoQ, and though regional player Ortel returned a profit in the current quarter as compared to a loss in Q1-2015, its Q1-2016 profit was less than half the profit reported in the immediate trailing quarter.

    Over the last few quarters, Den Networks’ financial performance has shown a marked decline. From a company that reported profit after taxes, it has started reporting a loss. Without considering other income, the company reported a negative EBIDTA of Rs 4.67 crore as compared to the operating profit of Rs 57.16 crore in Q1-2015 and a higher operating loss of Rs 5.97 crore in the immediate trailing quarter. However, the company’s Cable TV segment reported a higher QoQ EBIDTA in Q1-2016 of Rs 18 crore (6.9 per cent margin) as compared to the Rs 14 crore (5.3 per cent margin) in Q4-2015, but a lot lower than the EBIDTA of Rs 69 crore (27 per cent margin) in Q1-2015.

    Hathway’s EBIDTA in the current quarter declined 25.4 per cent to Rs 32.73 crore (12.8 per cent margin) as compared to the Rs 43.87 crore (17.5 per cent margin) in the corresponding year ago quarter but was 5.7 per cent more than the Rs 30.98 crore (11.5 per cent margin) in the immediate trailing quarter.

    Siti Cable’s EBIDTA including other income for Q1-2016 increased 5.1 per cent to Rs 38.1 crore as compared to the Rs 36.26 crore in Q1-2015 and was 18.7 per cent more than the Rs 32.11 crore in Q4-2015.

    “Our commitment to improving operational efficiency and streamlining operations continues, leading to EBITDA growth of 18.7 per cent and margin expansion by 501 bps QoQ,” explains Siti Cable executive director and CEO VD Wadhwa.

    Ortel’s EBIDTA in the current quarter improved by 24.1 per cent to Rs 10.84 crore (26.7 per cent margin) as compared to the Rs 8.73 crore (22.1 per cent margin) in Q1-2015, but declined 34.5 per cent as compared to the Rs 16.55 crore (36.9 per cent margin) in the immediate trailing quarter.

    Ortel president and CEO Bibhu Prasad Rath said, “Overall growth was delivered on the back of steady contribution from Cable TV and Broadband segments supported by continued momentum in the Infrastructure Leasing segment. Significant growth in subscriber base, deeper penetration, enhanced product offerings and a strong team, should enable us to notably improve our performance going forward.”

    Total Income from Operations

    Please refer to the figure below. Den Networks, the company with the largest TIO among the four, reported TIO at Rs 265.60 crore, 11.1 per cent less than the Rs 298.81 crore in Q1-2015 and 1.7 per cent lower than the Rs 270.30 crore in Q4-2015. The company’s loss in the current quarter at Rs 51.89 crore was lower than the Rs 61.15 crore reported in the immediate trailing quarter Q4-2015. The company had posted a profit of Rs 1.12 crore (0.4 per cent margin) in the corresponding year ago quarter – Q1-2015.

    Though Hathway reported 5.7 per cent growth in standalone TIO in Q1-2016 to Rs 264,41 from Rs 250.11 crore in Q1-2015 QoQ, its TIO was 2.1 per cent lower than the Rs 270.03 crore in Q4-2015. Hathway’s loss in the current quarter widened to Rs 43.91 crore as compared to the Rs 0.93 crore in Q1-2015, but was considerably lower than the Rs 76.99 crore in Q4-2015.

    Siti Cable reported TIO of Rs 228.09 crore in Q1-2016, which was 9.1 per cent higher than the Rs 209.02 crore in Q1-2015, but was 10.9 per cent lower QoQ than the Rs 256.01 crore in Q4-2015. The company reported a higher loss of Rs 37.11 crore in Q1-2016 as compared to the loss of Rs 31.67 crore and a loss of Rs 34.13 crore in Q4-2015.

    Ortel reported 20.5 per cent growth in TIO at Rs 40.60 crore in Q1-2016 as compared to the Rs 33.69 crore in Q1-2015, but 9.6 per cent lower than the Rs 44.91 crore in Q4-2015. Ortel reported profit after tax (PAT) of Rs 2.44 crore (six per cent margin) as compared to a loss of Rs 1.16 crore in the corresponding year ago quarter, but Q1-2016 PAT was less than half (lower by 56.8 per cent) the PAT of Rs 5.65 crore (12.6 per cent margin) in the immediate trailing quarter.

    Cable TV (Video) Subscription Revenue

    Subscription revenue in the current quarter dropped QoQ in the case of Siti Cable and Hathway, while both Den Network and Ortel saw an increase in YoY and QoQ subscription revenue. At the same time, all the companies have reported higher digitisation numbers in DAS and non-DAS areas. Siti Cable and Ortel have reported a gain in subscription numbers as well. While Den Networks and Hathway have reported flat or slightly higher digital as well as analogue average revenue per user (ARPU), Ortel has reported a slight drop in both ARPUs. 

    According to company sources, Siti Cable, which is the biggest player among the four sample companies in terms of cable TV subscription revenue, had flat QoQ ARPUs in Q1-2016, while YoY ARPUs showed double digit growth. The company claims that its subscriber base has increased by two lakh (all digital) to 107 lakh as it expanded its footprint by entering into 12 new towns across India as a part of the ongoing voluntary digitization process in order to be compliant with the DAS phase III digitisation deadline.

    Despite the flat QoQ ARPUs and higher subscription numbers, Siti Cable’s cable TV subscription revenue fell QoQ because the company had initiated strict measures against erring LCOs and had switched off signals to the extent of about four lakh cable TV consumers, as per industry sources.

    “During the quarter, we have further tightened our credit control measures and started taking strict actions against defaulting operators, which shall result into improved credit discipline and saving in operating cost,” revealed Wadhwa. A source told Indiantelevision.com that Siti Cable’s strict measures seem to have worked and signals have been resumed to the subscribers, but that it would take time to reflect the improved numbers in its financials.

    Ortel’s Rath added, “I am also pleased to share that over and above the 542,217 RGUs (revenue generating users) as on 30 June, 2015, we have signed buy out agreements with multiple LCOs with total estimated RGUs of 33,000, which would be integrated into Ortel’s last mile network going forward. So we remain on track and are confident of achieving our target of one million RGUs by March 2017 backed by our LCO buy out strategy and focus on organic growth both in broadband and cable TV.”

    Pay channel Costs

    Please refer to the figure below that represents the Cable TV costs paid by the four sample companies. 

    The big three reported a QoQ fall in pay channel costs, while in the case of Ortel, pay channel costs rose. This does not mean that a la carte has become a reality and the multi-system operators (MSOs) are only paying for what their subscribers are paying. It’s just that this quarter, balancing amounts have been paid to a broadcast aggregator, since excess payments had been made until Q4-2015. 

    Diverting from the performance for a bit, a source from an MSO says, “As a matter of fact, it’s the big broadcasters that are resisting a la carte. A la carte will affect their overall advertisement revenues for packaged deals across the multiple channels within their fold.”

    Internet subscription revenue

    This is one avenue that most cable companies are looking at as their business and revenue growth alternative. Internet ARPUs in India are much higher – to the extent of 3 to10 times the ARPUs from cable television. All the four sample players in this article reported YoY growth. The big three- Hathway, Den and Siti Cable also reported QoQ revenue growth, while Ortel’s internet subscription revenue remained flat. Higher subscription numbers, higher ARPUs brought in the accelerated revenue growth for Hathway, Den and Siti Cable. Typically, broadband ARPUs for the big three were in the range of Rs 750 in Q1-2016 as Rs against 650-700 in Q1-2015 and Rs 720-750 in the previous quarter.

    Among the four, Hathway with an initial higher internet subscriber base in excess of four lakh plus, reported a growth of 50,000 subscribers to bring its total subscriber numbers to 4.6 lakh in Q1-2016. Already its internet revenue subscription has a reasonably big share in its overall revenue pie. Comparatively, the other three have internet subscribers than number in just tens of thousands, though all have reported reasonable YoY and QoQ growth in subscribers.

    Ortel reported a slight depletion in ARPUs and hence the flat internet subscription revenue despite a higher QoQ subscriber base. Ortel’s broadband RGUs in the current quarter grew 4.1 per cent to 60,900 from 58,519 in Q4-2015. Ortel also launched up to 50 Mbps DOCSIS 3.0 Broadband Internet in Odisha. The company’s broadband ARPUs in the current quarter also declined by Re 1 to Rs 393 from Rs 394 in Q4-2015.

    End Points

    At present, most MSOs have two separate arrangements with broadcasters – one for Digital Addressable System (DAS) areas and another for non DAS areas. Recently the Essel Group that operates both carriage platforms – DTH though Dish TV as well cable TV through Siti Cable – formed a common entity called “COMNET” to help synergize strengths of both entities in dealing with broadcasters. Siti Cable says that the primary reason for forming this venture was to ensure that consumers have access to quality content at affordable prices. This move would assist in keeping content cost in consonance with consumer ARPUs and market realities. 

    Players across mature markets such as the US continue to report a fall in video subscribers – to that extent that most companies there have higher broadband subscribers than video subscribers. Such a scenario is not probable in the near future in India, but cable TV players do face competition from wireless internet players and mobile companies as well as from other devices as a mode of entertainment rather than the idiot box. Carriage or placement fees could continue as bargaining currency in the near future.

    Once a la carte becomes a reality, to some extent, one could infer that if the pay channel costs are down, it’s because subscribers have used the option, and not that the player has lost more subscribers than it gained. In theory, DAS has made it possible for carriers to pay broadcasters if and when the subscriber subscribes for pay channels. It now remains to be seen if the players in the industry allow the theory to be put into practice. Cable TV subscription revenues and ARPUs could fall if players don’t play it right.

    The response to the Hinduja’s HITS (headends in the sky) platform from local cable operators (LCOs) has been tremendous, if one were to go by initial reports. The DTH industry has started making inroads into DAS phase III and IV areas and could grab more than the 30 to 40 per cent of the subscribers that it did in phase I and phase II.

    As has been pointed out by industry experts, just the seeding of set top boxes (often non-BIS compliant STBs) does not mean implementation of DAS as it was truly meant to be. It can be safely reiterated that there’s a lot of work to be done by the industry.

  • NXT Digital organises roadshows for LMOs across 19 cities

    NXT Digital organises roadshows for LMOs across 19 cities

    MUMBAI: Hinduja’s headend in the sky (HITS) platform NXT Digital is looking at a smooth rollout when it launches by this month end. In keeping with the launch timeline, the platform is talking to the last mile owners (LMOs) across the country directly to help them understand the functioning of the system as well as the advantages of moving from the current multi system operator (MSO) to the HITS platform.

     

    Over the last 11 days, NXT Digital has covered 19 cities including Delhi, Mumbai, Goa, Bhubaneswar and Kolkata among others through its roadshows. The final destination will be Visakhapatnam, where the HITS player will meet city LMOs on 10 August. 

     

    Through the initiative, NXT Digital has met close to 6000 LMOs so far. Additionally, as part of the training, the HITS player will run a live demo van covering 10 states. 

     

    As reported earlier by Indiantelevision.com, NXT Digital has signed up as many as one million analogue TV households in phase III markets in a span of three weeks.

     

    Grant Investrade Limited managing director Tony D’silva said, “The fraternity is extremely excited about NXT Digital. In just over three weeks since NXT Digital was announced, it has already been signed up to reach one million analogue TV households in phase III markets through LMOs and MSOs who have opted for our services.”

     

    “NXT Digital will empower and enable the distribution fraternity including LMOs and MSOs to offer a world of exciting digital services to their end-subscribers in all the analogue households across markets. Crucially, NXT Digital will not only help the LMOs and MSOs go digital as per government mandated standards and within the set deadlines, but, throughout the process, help them be independent and retain the ownership of their network,” added D’silva.

     

  • Hinduja’s NXT Digital tots 1 million subscribers in 3 weeks

    Hinduja’s NXT Digital tots 1 million subscribers in 3 weeks

    MUMBAI: In a short span of three weeks, Hinduja Group’s headend in the sky (HITS) venture – NXT Digital has signed up as many as one million analogue TV households in phase III markets.

     

    Grant Investrade Limited managing director Tony D’silva said, “In just over three weeks since NXT Digital was announced, it has already been signed up to reach one million analogue TV households in phase III markets through LMOs and MSOs who have opted for our services.”

     

    Over the last 21 days, the HITS player has reached out to the cable fraternity across several cities. “The fraternity is extremely excited about NXT Digital,” he said. 

     

    LMOs and MSOs, according to D’silva,  see NXT Digital as a partner that will not only help them make the mandated transition from analogue to digital, but remain independent and owners of the networks they have built with sheer dint of hard work over the years.

     

    The roll-out of digital addressable systems (DAS) in phase III and IV markets across 110 million TV households is being seen as the biggest and the most significant step for the media and entertainment industry in India.

     

    A state-of-the-art broadcast facility in Noida has been designed and purpose-built to provide top quality service, which will roll out in end-August this year. While the satellite-based service will have a national footprint, in view of the deadline for DAS rollout, Grant Investrade is concentrating on the phase III and IV markets for its marketing and subscription drive to enable the cable fraternity provide digital services there.

     

    D’silva said, “NXT Digital will empower and enable the distribution fraternity including LMOs and MSOs to offer a world of exciting digital services to their end-subscribers in all the analogue households across markets. Crucially, NXT Digital will not only help the LMOs and MSOs go digital as per government mandated standards and within the set deadlines, but, throughout the process, help them be independent and retain the ownership of their network.”