ITV

Tag: LCO

  • GTPL sells dormant associate for Rs 1 Lakh

    GTPL sells dormant associate for Rs 1 Lakh

    MUMBAI: GTPL, the prominent multi-system operator (MSO) and broadband provider led by Anirudhsinh Jadeja, has offloaded its entire stake in a non-operational associate for Rs 1 lakh completing the transaction on 10 March.

    The cable TV and internet services company sold its 50 per cent equity holding in GTPL Jay Mataji Network Pvt Ltd to Deepak Kumar Yadav at approximately 11:00 a.m. IST, according to a regulatory filing.

    The transfer of 10,000 equity shares was finalised immediately after receipt of payment, effectively ending the associate relationship between the two entities.

    GTPL confirmed that  Yadav has no connection to its promoter or promoter group, and the transaction does not constitute a related party deal under regulatory provisions.

    Industry analysts note this move aligns with GTPL’s recent strategy of consolidating its position in core cable and broadband markets while divesting non-performing assets.

  • FY 2022-23 will be a transformational year for the company: Hathway Cable & Datacom MD Rajan Gupta

    FY 2022-23 will be a transformational year for the company: Hathway Cable & Datacom MD Rajan Gupta

    Mumbai: On building a profitable business, Hathway Cable and Datacom managing director Rajan Gupta stated that he believes FY 2022–23 will be a transformational year for the company.

    The provider of Cable and Internet services in its annual report mentioned the annual gross revenue up by 4 per cent to Rs 1,793 crore in FY 2022 as compared to FY 2021. After this, Gupta seems confident in increasing the company’s market share.

    Gupta said that with the worst of the pandemic effect seemingly behind us, and sports & other live entertainment events fully back in action, the environment looks favourable for the revival of the cable TV business currently.

    The company is confident that the efforts being made to prepare the platform for making deeper inroads into the market will significantly yield benefits in the increasing market share in the cable TV segment, going forward. It is focussed, committed and motivated to play a pivotal role in helping India’s media and entertainment industry bounce back, stronger than ever.

    Simultaneously, he also mentioned that the company acknowledged the current business environment has changed dramatically in the post-Covid world. In this difficult year, the company invested in building organisational competencies to align them with the evolving market and consumer demands & aspirations. “We have focussed on developing our capabilities in crisis management, enterprise agility, cost management, workforce resilience and innovation, which we believe to be the pillars of our growth-centric business model. Initiatives are also underway to leverage digital platforms to enhance the competencies of our partners in the cable TV business, as more than 90 per cent of our consumers in this segment are being serviced through our local cable operators,” Gupta added.

    He further noted that with the pandemic catalysing a new surge in demand, the FTTH (fiber to the home) segment of the business saw a healthy 20 per cent growth in revenue earning customers in these challenging times. “However, our cable TV business health was challenged due to a multitude of extraneous consumer and environmental factors. Limited original content, financial stress experienced by consumers in the Covid world, and multiple lockdowns led to many of them moving from metros to their home towns in this period. This, in turn, caused the bottom of the pyramid consumers to shift to value offerings, thereby limiting our ability to monetise this business,” Gupta said.

    Armed with in-depth industry knowledge and consumer understanding, Hathway responded to the situations with a powerful thrust on cable TV network expansion and transformation. Coupled with digital innovation, customer delight and workforce agility, the company is able to navigate successfully these unprecedented times.

    In line with this strategy, the company rolled out more than 140 new towns and added more than 3,000 kms of fibre network during the year under the community antenna television (CATV) business. With innovative next-generation high-definition (HD), high-efficiency video coding (HEVC) and over the top media service (OTT) set-top boxes delighting customers, Hathway scaled its consumer proposition for millions of new TV consumers. “These boxes host many new exciting industry-first features, such as time-shift – enabling users to watch a programme on one channel while recording a programme on another, radio channels, among others. We have also initiated a cable TV network transformation project, aimed at ensuring that our network is benchmarked to telco standards in terms of uptime, redundancies, resiliency and proactive monitoring,” he said.

    In the annual report, the company said that at the heart of its strategic thrust on continuous innovation lies a strong ambition to empower customers. “We invest in modern technologies, including artificial intelligence (AI) and machine learning (ML) applications and tools, to stay connected with our customers at all times. This helps us foster meaningful interactions with our customers,” he quoted.

    Taking its local cable operators (LCO) partnerships to the next level, the company also noted that amid the challenges of the year, Hathway’s marketing team pushed its efforts to improve communication with its LCO partners and assist them in growing the business. As part of these efforts, it identified the pain points of its LCOs, devised exciting ideas to pique their interest, and launched initiatives to raise awareness of its products and services.

    As part of these efforts, it identified the pain points of its LCOs, innovated exciting ideas to grab their attention, and took initiatives that helped create awareness about its products and services. According to the report, this triggered a new level of LCO activation and re-energisation of the stalled engagement.

    On the content front, the company plans to launch Kflicks, a dedicated channel for Korean content with dubbing in Kannada and Telugu languages for Karnataka, Andhra Pradesh, and Telangana markets. There will be English subtitles for the rest of the markets.

    The move is aimed at catering to the high demand from the new generation and the millennials. It also plans to launch an app, LCO LightHouse, to raise awareness about the LCO portal’s underutilised features, provide the necessary information, promote new or existing schemes & increase engagement.

  • Broadcasters promoting pay-TV on Free Dish are shooting themselves in the foot – Saurabh Sancheti

    Broadcasters promoting pay-TV on Free Dish are shooting themselves in the foot – Saurabh Sancheti

    Mumbai: With a 40 million base, which is constantly growing at the cost of Pay-TV, Prasar Bharati’s DD Free Dish is not just another competing platform, but considered by many as a precursor to the success of Free Ad-Supported Television (FAST) model in India. The implementation of NTO 2.0 is going to further intensify this cannibalisation. While broadcasters are riding the FTA wave, some fairly and some in an unfair manner, distribution platform owners are pushing for regulatory intervention and new ways to tackle the challenge.

    Saurabh Sancheti – Business Head | Hathway GTPL,   has long been advocating and working towards building a ‘rupee-a-day’ product that can take on Free Dish. At the Video & Broadband Summit organised by Indiantelevision.com on 19 January, he outlined the approach that is needed to arrive at this solution.

    “Out of the country’s 280-300 million households, nearly 200 million own a television set, and of this, only about 120 million have Pay TV. MSOs and broadcasters have to work together on wooing the remaining 80 mn base with a customised product. LCOs too need to reinvent themselves by adopting digital technology that serves their customers better,” he said. Sancheti is confident that if all players can collaborate on it, not only can the economics be worked out, but the pay-TV basket can be grown by at least 30-40 million in the next couple of years.

    Cog in the wheel

    In the current scenario, (short-term) gains and survival concerns are driving the top and bottom of the pyramid. Elaborating on what he terms as “death by annual plan”, Sancheti remarked, “Broadcasters promoting Pay-TV on Free Dish are shooting themselves in the foot. No matter how big you become on Free Dish, the platform cannot be monetised.”

    “They need to understand the possibilities of working with the DPOs. As people’s income levels increase, they will spend more on subscriptions. Those who join at a Free Dish equivalent pricing today, can become our regular and even premium customers tomorrow. But instead of thinking about taking customers up the funnel, and about the long-term growth of pay-TV, they are worried about their annual and quarterly targets,” he rued.

    Further, he noted that with infrastructure sharing and cheaper bandwidths making it possible to achieve last-mile delivery to the level of a gram panchayat at very low costs, distribution networks will also have to re-engineer themselves to align with the broadband revolution that’s underway.

    It’s obvious that the postulated rupee-a-day product cannot run in the same high-touch manner as the current base is running and hence the requirement of “lot more digital, lot more long-term packs and lot more of DIY”.

    Would that mean LCOs losing control of the last mile and eventually dropping out of the value chain? Commenting on the long-standing issue, Sancehti stated, “The primary models have failed, and MSOs realise that they cannot reach out to consumers directly, but only through the LCOs. That being said, today, consumers want more control. This is the reason why DTH, which has declined globally, is still surviving in India. It is the only medium that allows you to do everything yourself; from channel selection to bill payments. So, the risk of being eliminated is clearly there, however, it’s not because of the large players but the LCOs’ unwillingness to reinvent.”

     The next big opportunity

    Sancheti believes that the linear TV model still has a lot of scope left. Out of the 200 million TV-owning households in India, the top tier of 20-25 mn has both pay-TV and fixed-line connectivity. Their number is growing, and so is their OTT consumption.

    The second set of 100 mn households, which is 70 per cent urban, consumes linear TV on the large screen and OTT on private/mobile screen. It will gradually go the 25 mn way.

    The remaining 80 million (TG for the rupee-a-day product) are the ‘cord nevers’ who are subscribed to either analogue or Free Dish today. As their income levels increase and more content and services suitable for them are made available, they will move up the ladder into the pay-TV base.

    Sancheti, however, finds the 100 million ‘TV nevers’ equally if not more promising than the 80 mn cord nevers. “At Den, Hathway, and GTPL, we believe this is where the opportunity lies to as much as double our base. As the economy progresses, spends on services will increase exponentially, and we are reinventing ourselves for the change; whether it is by way of working on connectivity/network or by value engineering the set-top boxes that begin at an 800 Rupees price point today.”

    Pinpointing the 100 mn challenge and opportunity, he added, “It’s not like the cable hasn’t reached the ‘villages’. The problem is that it has found only 500-odd homes/subscribers there. The art is in doubling this number by offering the right product and pricing.”

    Impact of NTO 2.0

    Winding up the discussion with a word on the present state of regulation and the impact of NTO 2.0, Sancheti observed that “whatever rationalisation had to happen in terms of channel selection at the customer end has already happened with NTO (2019). Beyond a point, more à la carte will only do more harm. With NTO 2.0 we are looking at a 25-30 per cent increase in prices as per published broadcaster RIOs. India being a price-sensitive and value-seeking market, this will further pressurise the PayTV base, leading to more people opting out of it.”

     

    Please Note : “The views expressed are personal and do not represent the views of Reliance Industries Limited or any of group companies”

  • #Retrace2021: The year of regulatory challenges and no TRPs for news channels

    #Retrace2021: The year of regulatory challenges and no TRPs for news channels

    Mumbai: The year 2021 began with a rather chaotic legacy handed over by 2020. In the aftermath of the TRP Scam, TV ratings for the news genre remained suspended throughout the year. The legal tussle between Telecom Regulatory Authority of India (Trai) and broadcasters over the rollout of the New Tariff Order (NTO) 2.0 continued to dominate the headlines.

    Adding to this, was the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (IT Rules, 2021), announced in February which set the ball rolling for regulation of digital and social media. This was followed by the Cable Television Networks (Amendment) Rules, 2021 (CTNA 2021) and the proposed amendments to the Cinematograph Act, 1952, all of which sought to regulate content across media including digital, and align it with ‘public interest’.

    Also Read: SC refuses to grant interim protection to Tandav makers

    The year began with the controversy over the Amazon Prime web series ‘Tandav’ which became the tipping point for the government which was already deliberating the regulation of digital media including social. The show and its star cast was accused of hurting the religious sentiments of a particular community prompting the show’s director Ali Abbas Zafar to issue an unconditional apology on social media. The spate of FIRs and threats continued unabated despite the omission of two ‘objectionable’ sequences, and apologies from the platform and its then country head Aparna Purohit.

    Also Read: Tandav : And the future of storytelling

    While the hitherto pampered OTT-verse was bracing itself for government oversight, the pay-TV universe continued to be cannibalised by it and DD Free Dish at the top and bottom tiers. Even as distribution players worked on diversifying their offerings to embrace the imminent digital takeover and on building new ones to challenge Free Dish, they kept pushing for regulatory interventions to tackle the issue at its core. Though well within its rights to strive for survival, in the process of manoeuvring these challenges, the industry ended up creating another flashpoint between the regulators/government and itself.

    2021 closed with a trailer to the next big fight with Trai questioning the availability of linear channels on OTT and telco apps which, it said, is in violation of Clause 5.6 of Policy Guidelines for Downlinking of Television Channels dated 5 December 2011. Broadcasters, on the other hand, invoked section 37 of the Copyright Act 1957 known as Broadcast Reproduction Right (BRR) to justify their channels’ presence on their own OTT platforms and third-party aggregator apps. Also because they are not licensees under Trai Act, they do not fall under the scope of Trai Act or Interconnection Regulations or Clause 5.6 of Downlinking guidelines.

    Here, we take a look back at the regulatory events and challenges that re-defined the Indian TV industry in 2021.

    Legal tussle over NTO 2.0

    One of the biggest developments of the year was the pronouncement of the Bombay High Court order on the NTO 2.0 case on 30 June. After a legal tussle that lasted over a year, Trai had managed to get a green signal from the court on the implementation of the amended rules. While the HC upheld the constitutional validity of NTO 2.0, it termed one of the twin conditions “arbitrary”, according to which the maximum retail price of an a-la-carte channel could not be more than one-third the maximum rate of a channel in the bouquet.

    Also Read: NTO 2.0 Verdict : Who Wins What?

    Following the notification of NTO 2.0 in January 2020, several broadcasters under the umbrella of the Indian Broadcasting and Digital Foundation (IBDF) and a couple of other private channels challenged the amendment terming it “arbitrary and in violation of their fundamental right”. The NTO 2.0 prescribed linkage between a-la-carte price and bouquet via the imposition of twin conditions on bouquet pricing, and reduction in price cap from Rs 19 to Rs 12 for pay channels, thereby incentivising a-la-carte alone.

    Having recognised the adverse impact of NTO (2019) on all stakeholders including consumers, broadcasters and distributors refused to accept the judgement and challenged it further in the Supreme Court in July. After a series of adjournments, the apex court, on 30 November, posted the matter for hearing on 15 February 2022.

    Meanwhile, in November, Trai moved the deadline for implementation of NTO 2.0 from 1 December 2021 to 1 April 2022. Distribution platforms like DTH and cable will now have to seek subscriber choice till 31 March 2022, it said. The deadline for broadcasters to come up with their new reference interconnection offers (RIOs) and simultaneously publish the required information about channel and bouquet offerings, as well as their MRPs on their websites was also extended to 31 December.

    Also Read: Trai extends NTO 2.0 implementation to 1 April 2022

    Several large networks including ETV, Discovery Communications, Sun TV, Times Networks, ZeelL, SPNI, and others had come out with their new RIOs in October-November. In what looked like a refusal to back down, the broadcasters preferred to pull their popular channels out of the bouquets instead of reducing the price to Rs 12. Their move flies in the face of the regulators’ assertion and intention of preserving the interest of customers.

    Despite the short-lived benefits of incentivising à la carte and changes in NCF for broadcasters and distributors, the attempt to regulate channel pricing was soon recognised by all stakeholders as being counterproductive. Aside from having an overall negative effect on reach and viewership for broadcasters, it led to the shutting down of many niche channels which became inviable as a result of NTO implementation. The impact for distributors was felt when customers gravitated towards either OTTs or Free Dish to counter the increase in their monthly subscription bills.

    Also Read: DTH operators write to Trai over broadcasters offering pay channels on DD Free Dish

    The implementation of NTO 2.0 will further hasten this migration. Foreseeing the detrimental scenario, Direct-to-home (DTH) service providers including Tata Sky and Airtel Digital TV wrote to Trai in September asking the regulator to address the issue of broadcasters making their pay channels available on DD Free Dish. Alleging that this goes against the current tariff regime which mandates the designation of channels as either pay or FTA and prohibits their bundling together, they once again raised the demand for such designation to remain constant across distribution platforms.

    Also Read : There needs to be a level-playing field : Tata Sky CEO Harit Nagpal

    Further, in a letter dated 28 December written to Prime Minister Narendra Modi, the Delhi-based All Local Cable Operators Association alleged that the Trai and broadcasters are “forcibly pressurising” MSOs to implement the new tariff order, which will lead to cable TV operators, national MSOs and independent MSOs incurring huge losses. The NTO 2.0, if implemented, will lead to the unemployment of lakhs of families connected with the cable TV industry, it said. Several other representative organisations have also raised the issue with the government and regulators frequently.

    Also Read : Trai vs Broadcasters : Impact could be larger than expected

    IT Rules, 2021 & Cable Television Networks (Amendment) Rules, 2021:

    The introduction of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 by the ministry of electronics and information technology (MeitY) in February sought to regulate social media, digital platforms, and streaming services in the country through a three-level grievance redressal mechanism.

    The “soft-touch regulatory architecture” comprised Level I – self-regulation by broadcasters, Level II – Self-regulation by registered self-regulating bodies of the broadcasters, and Level III – oversight mechanism by the central government. Later in June, the government extended this framework to Cable TV with the Cable Television Networks (Amendment) Rules, 2021.

    Also Read: MIB amends Cable TV rules for redressal of broadcast related complaints

    Also Read: Trai issues new consultation paper to regulate monopoly in Cable TV services

    The new regulations, along with proposed amendments to the Cinematograph Act, 1952, brought together all forms of media in the country barring newspapers under the three-layer regulatory mechanism. Consequently, they also ran into troubled waters with broadcasting associations like NBA and IBDF and some independent players filing several petitions in various high courts.

    News Broadcasters Association (NBA) president Rajat Sharma wrote to the then I&B minister Prakash Javadekar requesting the exclusion of digital news platforms owned and run by traditional news media from the purview of the provisions of the new IT Rules, 2021. In July the organisation approached the Kerala HC with a writ petition contending that the oversight mechanism gives the executive “unfettered, unbridled and excessive powers to regulate the content of TV channels of news broadcasters.”

    Also Read : No exemption for mainstream media from IT rules

    The IBDF, Sun TV Network, and SJ Clement filed separate petitions challenging the constitutional validity of Part III of IT Rules 2021 and CTN Amendment Rules 2021 in the Madras high court.

    In May, IBF had renamed itself as IBDF bringing all digital/OTT platforms under its purview. It also announced plans to form a new subsidiary – an industry-led Self-Regulatory Body (SRB) called Digital Media Content Regulatory Council (DMCRC) to serve as a second-tier mechanism at the appellate level specifically for digital. The DMCRC is similar to Broadcast Content Complaint Council (BCCC) which IBF had successfully implemented for the linear broadcasting sector in 2011. 

    Also Read: Former SC judge Justice Vikranjit Singh Sen appointed chairman of IBF’s new self-regulatory body

    Overhaul of TRP ratings

    The committee on TRP ratings formed by the government in the aftermath of the 2020 TRP Scam came up with its recommendations pushing for the formation of multiple rating agencies in competition to Barc India and creating a specialised regulator to oversee all of them. The 39-page report submitted by the committee early this year was shared with Broadcast Audience Research Council (Barc) India and other broadcasters in November to take the discussions forward.

    Led by Prasar Bharati CEO Shashi Shekhar Vempati, the four-member team also included – IIT Kanpur, professor of statistics, department of mathematics and statistics, Dr Shalabh; C-DOT executive director Dr Rajkumar Upadhyay; Decision Sciences Centre for Public Policy professor Pulak Ghosh.  After consultation with stakeholders such as Barc India, MDPL, Zappr Media, Nielsen India, and Tata Sky AMS, the committee had issued several specific and sweeping recommendations on the technical aspects of TV rating measurement in India.

    Observing a broad consensus among industry stakeholders in favour of leveraging return data capabilities, it recommended that RPD should be made mandatory for set-top-boxes (STBs) deployed by distributed platform operators (DPOs). The collection of viewership data by DPOs is to be governed by privacy norms prescribed by the government/regulator. 

    Also Read : Govt committee seeks to set up specialised regulator for media ratings

    The report noted that crowdsourcing approaches could be economical alternatives to RPD and should be open to rating agencies to enrich panel-based measurement. The committee also batted for an open data ecosystem allowing academics and independent researchers access to algorithms and raw datasets to analyse, validate and enrich them.

    The television rating system in India had come under scanner in October 2020 when Mumbai Police claimed in a press briefing that they have probed a case of manipulation of TRPs and found some incriminating evidence. The police said the accused were allegedly bribing the households to keep a particular channel running, leading to several arrests. Three news channels, Republic TV, Fakt Marathi, and Box Cinema were named in an alleged TRP tampering scam. BARC had also temporarily suspended the publishing of weekly data for news channels, which remains in limbo to date.

    Also Read: MIB to implement TRP ratings recommendations soon: Anurag Thakur

    Making satellite-broadband services cheaper

    The cost of satellite-broadband services continues to remain on the higher side in the country, posing a major challenge to its wide adoption by the end-users. The issue was also taken by India’s telecom regulator which is looking for ways to drive down the rates of satellite broadband. Early this year, Trai also floated a discussion paper and sought views to make satellite communications more affordable in the country. 

    Among other issues, Trai also sought views on whether satellite service licensees should be allowed to obtain bandwidth from foreign satellites for providing IoT connectivity. Also, whether any specific or all bands should be permitted for provisioning satellite-based IoT connectivity. It also invited suggestions on whether a new licensing framework should be proposed for the provision of satellite-based connectivity for low-bit-rate applications or the existing licensing framework may be suitably amended to include the provisioning of such connectivity.

    Also Read: Trai seeks suggestions to make satellite broadband services affordable

    5G roll-out and spectrum clash:

    Earlier in the year broadcasters expressed concern over the rollout of 5G at a near-clashing frequency. Their apprehension was that the spectrum range of 3.0-3.6GHz identified for 5G does not allow for a buffer or ‘guard band’ before satellite television operates at 3.7 to 4.2 GHz. This could lead to disruption in television and radio services in the country. Even though welcoming of 5G has held great opportunity for the M&E industry in the era of convergence, broadcasters said that in the event they had to move to a higher frequency, the government should intervene with subsidies to offset the cost incurred.

  • Right time for the LCO ecosystem to reinvent itself: Jio Platforms’ Saurabh Sancheti

    Right time for the LCO ecosystem to reinvent itself: Jio Platforms’ Saurabh Sancheti

    Mumbai: Saurabh Sancheti, the young and dynamic CFO of Jio Platfroms, and one of Fortune India’s 40 under 40 has been instrumental in scripting the success story of Reliance’s Cable business post its acquisition of two largest cable TV and broadband companies in the country – Hathway Cable & Datacom and DEN Networks for a sum of Rs 5,230 crore in October of 2018.

    At the recently concluded Apos India Summit, Sancheti discussed the transformative journey of the two acquired assets, and the challenges and opportunities for Pay TV distribution industry in the light of regulatory and technological changes.

    At the time of acquisition, and much after that as well, Reliance’s Cable business was running at an operating loss. Tasked with bringing about a disruption, Sancheti went on a brainstorming spree to figure out its strengths and problems areas. After several talks with top executives, Local Cable Operators (LCOs) as well as customers, he concluded that the one thing Cable needed was operating cash flows to be positive.

    “That is fundamental, because if you scale up a business which is losing on a unit basis, then you are only scaling up the losses,” he said. “The singular problem that I could pinpoint here was that we were not collecting whatever we billed. And if we could do that, we were home. No one disputes the bill per se; it was all about collection. That’s where I suggested moving Cable to prepaid – a rather ‘blasphemous’ idea for that time.”

    The impact was such that operating cash flows swung from a negative territory to a positive Rs 800 crore per year. Within six months most of the competition also turned to the prepaid model, bringing about a systemic change in the ecosystem.

    Since then industry players have collaborated on various initiatives and models. “The sector which was plagued with a lot of trust issues and fights has, today, come together under the umbrella of the All India Digital Cable Federation (AIDCF) which has become a de-facto platform for constructive discussions.  The AIDCF is also playing a proactive role in conveying our concerns to the government and regulatory bodies,” shared Sancheti.

    Elaborating on the regulatory challenges and their impact on the business currently as well as in the coming years, he remarked, “While a lot of changes in regulations have taken place in the past few years, the crux of it all is that the Trai is advancing in a direction which is more pro-consumer; whether it’s more consumer choice, more a-la-carte, or lesser bundling, the underlying intent is the same. This brings a lot of complexity for the business.”

    Giving a perspective in numbers, he added, “Any large e-commerce company which is handling Stock keeping units (SKUs) from multiple businesses and industries tops out a 100-150,000 SKUs. Today we are serving more than one million unique combination or SKUs to our customers at Den, Hathway, and GTPL. This is coming from an industry which until two years back (before the acquisition) was serving less than 100 SKUs. So, there has been a sea change in offerings as well as technology.”

    But even as the regulator works towards bringing the customer back in focus, there are apprehensions about the mindset and workings of the industry leadership which doesn’t seem to have been very customer-centric historically. Sancheti contended that the situation is changing, and today, not just the top leadership and MSOs, but many LCOs too have a customer friendly and progressive outlook.

    The advent of OTT and the allegedly predatory expansion of DD Free dish universe have posed major challenges to Pay TV distribution in the past couple of years. Current realities notwithstanding, Sancheti believes that there exists a huge opportunity.

    “Out of the country’s 280 million households, nearly 200 million own TV.  Of the 200 million, only about 120 million have Pay TV. So, clearly no other market has such potential as India. The problem is that this base has largely remained stagnant over the years primarily because of two factors. At the higher tier it is the advent of OTT, and at the lower, it’s DD Free Dish which has grown rapidly in last four-five years,” he added.

    There’s also a third challenge that he recognises as needing quick intervention – the dismally low earnings of Cable operators. “In the prevailing circumstances where not just competition from new technology, but even regulatory hurdles like NCF cap are working against them, an LCO takes home on an average Rs. 15000, which is just slightly above the minimum wages. Again, this is just a fraction of what they used to earn previously.”

    The good thing is that all players in the industry are now aware of these challenges, and what needs to be done. The question is ‘how’.

    Sharing his approach and vision for tackling these issues, Sancheti stated, “As an MSO we are trying to work on a low-cost rural market product and the idea is that ‘can we have a price point which can truly challenge Free Dish’. The North Star here is ‘rupee-a-day’ product. If we can have it, we can get at least 40-50 million homes into the Pay TV base.”

    One of the ways of getting to it is reinventing the entire LCO ecosystem as a ‘reseller of services’, he observed. “Our biggest strength as MSOs and LCOs is the ‘last-mile access’. As distributors we ‘own that home’ and the trust and relationship shared with it, has in many cases, been built over decades. If we can leverage it to become resellers of services like OTT and broadband, the market potential of 40-50 million can be unlocked.”

    In addition to solving the problem of LCO incomes, this ‘integrated platform play’ will help the industry to achieve the bigger objective of collectively arriving at the hypothesised challenger product to take on Free Dish.

    “Live TV on a standalone basis is not practicable anymore. So, we clearly need to act as distributors of more services. This will divide costs between businesses, thus making a lot of under-connected and unconnected homes more viable. Ultimately, all of this will tie back to our ‘rupee-a-day’ product,” elaborated Sancheti.

    Signing off on a very positive note he said, “We are standing at an inflection point where the entire LCO model is at the right stage to be reinvented. There’s no market more attractive than India. I strongly believe that it has a long-term potential of at least 170-180 million Pay TV base; it’s doable. An 80 million broadband base is also doable, all within three years.”

  • #Throwback2020: Cable operators start adapting to stay relevant

    #Throwback2020: Cable operators start adapting to stay relevant

    KOLKATA: Charles Darwin coined the phrase ‘survival of the fittest’ while studying the phenomenon of natural selection in the evolution of life. This concept applies to the inanimate world, too – as exhibited by the Indian cable industry. With changing consumption patterns, advancements in technologies, there are few consistently profit-making cable TV service providers left in the market.

    Then came Covid2019, affecting the supply chain and normal operations. More people turned to online platforms for entertainment, further imperiling the industry. In order to survive, it became vital to adapt – and many large and mid-level cable operators did just that, by innovating business models for sustainability.

    As the countrywide lockdown was implemented, cable TV operators encountered multiple roadblocks. For instance, a part of the workforce in big cities, and students who went back to their hometowns or native villages did not renew their subscriptions. The closure of commercial establishments like hotels and offices also impacted the subscriber base along with financial stress among lower income groups. Due to lack of fresh content on major entertainment channels, live sports content, a number of subscribers downgraded their subscription packs. All of these factors caused a difficult first half of FY21 for consumers.

    The sales of new set top boxes dropped for 75 per cent of cable TV operators during Covid2019, while nearly 84 per cent operators reported a drop in collection, a survey study by INTIN said. And it’s not just for a brief period – 77 per cent multiple system operators (MSOs) expected a decline in revenue in FY21 and some of them even estimated the drop to be greater than 25 per cent.

    Along with subscriber loss, local cable operators faced the issue of payment collection due to restrictions during the stringent lockdown. While it initially led to a drop in revenue, it compelled most MSOs as well as LCOs to adopt digital payment practices. Major MSOs like GTPL Hathway, Siti Networks, IMCL acknowledged that more consumers and local cable operators embraced digital payment options post-Covid2019. However, some of the LCOs who are working on ground also cautioned that the number of consumers paying digitally is still not substantial, albeit the noticeable improvement during lockdown.

    The pandemic has further solidified the need to adopt hybrid boxes among MSOs. Hathway Digital, Den Networks, Siti Networks, IMCL, GTPL Hathway have already launched or are working on rolling out hybrid boxes. Although the roll out has been delayed due to the Covid crisis for some companies, they have set the target of finishing the task within this fiscal itself.

    In addition to providing OTT platforms like Netflix, Amazon, Hotstar on their boxes, foraying into the OTT space could be a big gamechanger for the industry, Intin recommended. Large MSOs often have upwards of 80 local cable channels, which can be readily primed to their own OTT platforms. Currently, only 24 per cent of cable TV players have their own OTT platforms offering pure-play cable content.

    Moreover, the operators who will be able to skinny bundles with an internet connection will thrive in this changing ecosystem. As more people worked from home, attended e-classes, consumed more online content, the demand for high-speed wired broadband has gone up rapidly. The wired broadband sector has continued to grow throughout the year, standing at 21.51 million subscribers as of October. The cable operators have gained from this growth substantially, as all listed MSOs have reported an increase in broadband subscribers.

    But while it is easier for larger players to invest in new technologies, it could be a challenge for the minnows to survive. According to a report from Omid, the number of local cable operators has gone down by 30 per cent between 2015 and 2020. Number of local cable operators is predicted to fall to around 20,000 by 2025, down from about 40,000 in 2019. It also mentioned that consolidation between larger pay TV players like Airtel TV, Dish and TataSky is also possible following the merger of Dish TV with D2H and the acquisition of cable operators Hathway and DEN by Reliance Jio.

    Like other sectors in the media and entertainment industry, cable operators also witnessed some significant changes in regulations. As part of the government’s move to decriminalise smaller offences, the ministry of information and broadcasting (MIB) proposed to remove jail terms for violating Cable TV Networks Regulation Act. Punishments for offences committed under the act would be limited to seizing the equipment of the operator, cancellation of the license, a ban of up to 30 days on the broadcasting of the channel, forcible running of apology scrolls and so on.

    The operators started off 2020 with the amended new tariff order (NTO 2.0) wherein they had to adjust network capacity fee and multi-TV connection charge. In the middle of the Covid crisis, TRAI recommended that all STBs provided to customers must support interoperability and urged the MIB to make it mandatory by introducing the requisite provisions. The viability of the move was questioned and stakeholders warned that it would be a very high-cost operation.

    On the bright side, MIB permitted infrastructure sharing between HITS operators and MSOs, meeting the long-pending demand of the TV distribution sector. The amended guidelines also allow sharing of transport stream transmitted by HITS platforms, between HITS operators and MSOs. As many MSOs across the country are facing a cash crunch, the infrastructure sharing could help them reduce operating expenses.

  • Why last mile monopoly is a roadblock in broadband growth

    Why last mile monopoly is a roadblock in broadband growth

    KOLKATA: Demand for broadband connectivity has existed in India for a while, but recently, calls for better quality of service are growing increasingly strident. While the existing cable TV infrastructure could play a potential role in delivering broadband, last mile monopoly is one of the major factors that prevent the growth of the sector through infrastructure sharing.

    In response to the Telecom Regulatory Authority of India’s consultation paper, one of the largest broadcasters – Star India stated that there is still a problem of last mile monopoly in the cable TV industry arising from exclusive deals between cable TV operators and Resident Welfare Associations (RWA).

    “Following TRAI recommendation on ‘In-Building Access by Telecom Service Providers’ in January, the DoT in November 2019 issued an advisory to all telecom service licensees to share in-building infrastructure to share infrastructure in airports, railway stations, bus terminals, metro lines and hospitals etc. The MIB, as the licensor of all MSOs, must issue a similar advisory for sharing of cable TV operators’ in-building infrastructure and infrastructures within a particular RWA,” Star India said.

    The broadcaster mentioned that 1,600 MSOs and 60,000 LCOs have laid a vast network of copper coaxial and fibre network connecting 8.3 crore households. It suggested that since these are private networks and do not utilise scarce spectrum, the government should exempt cable operators with Internet Service Provider (ISP) license from paying AGR for a minimum period of five years, provided that they operationalise them within six months of obtaining ISP license. According to the broadcaster, this will incentivise cable TV operators to provide broadband services and instantaneously increase wired broadband connectivity from 1.9 crores to around 10 crores.

    Leading ISP Atria Convergence Technologies Ltd also pointed out that there is a huge monopoly in providing cable TV services as the dominant LCO takes over a particular area by tying up with a single MSO and completely stifles the competition by preventing entry of other LCOs and MSOs in the given area.

    “Wired ISPs are seen as a threat by the LCOs and the same usually results in sabotage of network assets of the wired ISPs. If wired ISPs need to actively collaborate with LCOs, then these prevalent practices in cable TV industry should be curtailed and arrangements between ISPs and LCO should be left to market forces,” it added.

  • TRAI’s Arvind Kumar prescribes broadband medicine for MSOs & LCOs

    TRAI’s Arvind Kumar prescribes broadband medicine for MSOs & LCOs

    KOLKATA: Digital is it. Across the country, and age groups, Indians are getting online, and consuming more high speed broadband data than ever before, whether it is for entertainment, education, commerce or banking. While the telcos have been serving their needs for a large part, the increasing maw for data and speeds has thrown up increasing opportunities for multi-system operators (MSOs) and local cable operators (LCOs)  even as their video distribution operations are seeing churn.

    The Telecom Regulatory Authority of India (TRAI) advisor Arvind Kumar spoke about this potential future of MSOs in a virtual fireside chat hosted by Elara Capital. Kumar said that a number of people want broadband services currently and they are looking at fibre-to-home services. According to him, it is not possible for a telecom service provider to satiate the demand of 300 million households even in the next ten years. 

    Read our coverage on TRAI 

    “Therefore MSOs must focus on providing a broadband connection with cable TV services. This is right for them. This makes a very good business case for the MSOs. Neither any TSP will be able to fight with them, nor DTH operators will be able to do so. The MSOs should focus on how to give broadband service at the same time along with cable services to retain subscribers,” Kumar added. He also mentioned that the Covid2019 crisis has proved the demand for broadband connectivity. 

    He is optimistic about the ability of MSOs to stave off the competition from DTH operators despite the latter having a technological edge. Kumar opined that MSOs can compete with DTH operators in terms of the quality of service, cost-effectiveness and broadband services. Considerably, reports came out after the implementation of the new tariff order indicate that MSOs are losing a large number of subscribers to DTH players.

    Read our coverage on MSOs 

    Along with other economic issues, MSOs face the issue of conflict with local cable operators (LCOs) quite often. According to Kumar, the two parties will keep getting at loggerheads with each other until they understand the whole game. He explained the need for LCOs to upgrade their thought process as well as technology. “The LCOs have to support MSOs to stay relevant in the game. Otherwise, both parties will lose their market share to other contenders,” he pointed out.

    Kumar emphasised that LCOs must concentrate on broadband plans and discuss with MSOs. They need to express the longing of coming into the overall picture. He also mentioned that Jio will get support from MSOs if they don’t receive it from the last mile operators. However, he added that LCOs have expertise in dealing with consumers, local authorities which is important to help any broadband operator.

    As per TRAI data, there were 19.38 million wired broadband subscribers in India as of 31 May 2020. The top service providers were BSNL (7.93 million), Bharti Airtel (2.41 million), Atria Convergence Technologies (1.64 million), Hathway Cable & Datacom (0.97 million) and Reliance Jio Infocomm Ltd (0.97 million). 

  • SPN’s distribution team brings cheer to Maharashtra LCOs through ‘Nukkad LIVE’

    SPN’s distribution team brings cheer to Maharashtra LCOs through ‘Nukkad LIVE’

    KOLKATA: The Covid2019 pandemic has had a seismic effect not only on the way businesses run but also on several other aspects of people's lives. The cable industry, the unsaid essential service, has played a major role in the current environment keeping people entertained and informed. While a majority of the population was under a shelter-at-home directive, last mile operators kept working on-ground risking their lives to provide seamless services to their subscribers. SPN was the first network to salute these unsung heroes through its ‘Happy Hero’ campaign. Taking the relationship with the operators forward and to bring some cheer , excitement to the last mile operators, Sony Pictures Networks India (SPN) undertook a novel initiative of virtual event, ‘Nukkad LIVE.’ 

    Through ‘Nukkad LIVE’ last mile operators, more commonly known as LCOs, get to enjoy specially curated acts as well as interact with the artists & key protagonists of various SPN channel shows. 

    "The new normal in our day to day to work life has shifted to the digital interface. We have always believed in staying connected with our trade partners & we enjoy excellent partnerships with MSOs across the country. The ‘Nukkad LIVE’ initiative is really about going a step further & creating opportunities for interaction for SPN’s well known show artists with the last mile, namely the LCOs. They are really the unsung heroes who are risking their lives every day to keep the pipeline of entertainment flowing and alive. After seeing the huge success of ‘Nukkad LIVE’ in Maharashtra with the likes of DEN and GTPL, we will soon be extending this format to the Hindi GEC & sports genres,” said Sony Pictures Networks (distribution business) EVP Sales and Marketing, Makarand Palekar. 

    SPN has initiated the first leg of this digital collaboration in the Maharashtra market bringing actors from Sony Marathi and leading operators from the state together. Samir Choughale, Vishakha Subhedar and Vanita Kharat, all well-known names from the Marathi entertainment industry, are part of this campaign to meet operators on the ‘Nukkad LIVE’ platform. 

    While Kharat holds the meet-up together by anchoring it, Choughale is interviewing Subhedar and the latter gets humorously offended. The fun banter ends with the stars thanking the operators for their relentless support and service to keep the show on during the lockdown period as operators made sure all the viewers got uninterrupted signals for their daily dose of entertainment. The 40-minute meet ended with both the actors interacting with the trade fraternity by answering their questions.

    Although both broadcasters and distributors are dependent on each other to run their businesses, during this crisis period, such collaborations can help to keep the touch points on both sides alive and lighten the burden of social distancing, on everyone. 

    What do the partners think?

    “Good initiative by the Sony Marathi & distribution team to connect & engage our business partners using the virtual platform. Spreading a smile is very important in the present situation where people are facing a lot of hardship. All the best to the Sony team,”  GTPL Hathway Ltd promoter and managing director Aniruddhsinh Jadeja said. 

    “This unique initiative by Sony team to bring the last mile operators together, added a new dimension to strengthen relationship between broadcaster, MSO & LCO. It helps the industry to work towards a common goal of inclusiveness by involving the last mile which further encourages them to provide better services,”  DEN Satellite director Rajeev Gavi shared. 

    “Brilliant programme! The execution of the event was seamless despite the dependency on technology. Inviting the LCOs to this event and mentioning the special relationship that Den Satellite and Sony shares further strengthens the bond between stakeholders. Artists were really entertaining and it was thoroughly enjoyed by our partners,”  DEN Satellite director Ravishankar Singh said. 

  • Cable subscription collection sees 80% drop due to COVID-19

    Cable subscription collection sees 80% drop due to COVID-19

    MUMBAI: Cable operators have been facing problems in the collection of subscription fees since the third week of March as restrictions on social distancing started. Moreover, the countrywide lockdown has caused them more distress. Subscription collection of the operators from customers has fallen down, as Maharashtra Cable Operators’ Foundation (MCOF) stated. 

    “After the ministry of information and broadcasting permitted cable TV as an essential service, cable operators have been able to get their limited staff to attend to network-related issues. With no public transport, workers staying at faraway locations have not been able to attend,” it stated.

    “Subscription collection from customers has come down drastically as many societies and colonies have imposed restrictions on any entry into their complexes,” it added.

    MCOF mentioned that cable operators have to make payments to their respective MSOs upfront if they wish to activate any channel/package. But all MSOs get almost 30 to 60 days’ credit before they make any payment to the broadcasters. This is mainly due to the fact that MSOs have to generate monthly usage reports for the month, based on which the broadcasters will raise their invoices. These broadcaster invoices will then be processed by respective MSO accounts teams and payments made. 

    Against this backdrop, various cable associations have appealed to TRAI, MIB, and respective MSOs to either adopt post-paid services for April or to issue credit facilities to cable operators who are unable to collect.

    The AIDCF (All India Digital Cable Federation), the body of MSOs, has decided to keep only the mandatory channels of Doordarshan active for any STB which is not renewed in April. 

    It stated that cable operators are not financially strong to fund the MSOs and activate channels, especially when collections have dropped by 80 per cent or more. 

    Cable associations have advised cable operators the following: 

    ·   Cable operators should push customers to pay online using NEFT/UPI/wallets/credit or debit cards and activate services for those who have paid.

    ·    For those customers who do not pay online, cable operators can downgrade them to Free To Air Channel (FTA) Packs, since most viewing is happening on news channels (most of which are FTA channels) and DD providing re-runs of its popular serials at nil cost. Pay broadcasters have run out of fresh programming and all sporting activities having come to a halt, these can be activated for customers who make payments to cable operators. 

    ·   Cable operators are free to levy a convenience fee of up to Rs 30/- per month from a customer to renew the services without any upfront payment. Customers can opt for this by calling/messaging their respective cable networks and confirming their willingness to pay the same.

    “In over 25 to 30 years of this business, cable networks have gone through various natural calamities but we have always ensured that the subscribers get near-uninterrupted services. We request customers to stand by their respective cable operators as a mark of solidarity by using any online method of convenience to pay their cable operators or speak to their cable operator and exercise their best option,” the federation urged.