Tag: MPA

  • DTH could push HD penetration in next one year: MPA

    DTH could push HD penetration in next one year: MPA

    MUMBAI: As the year comes to an end, the multi system operators (MSOs) have finally come out with their packages and the pricing module for the Star India channels, after the broadcaster decided to give its channels only on Reference Interconnect Offer (RIO) basis.

     

    But according to Media Partners Asia (MPA) while Star has the right intent, it has to remain flexible on the incentives offered for better ground adoption. From the operator’s viewpoint, the Star scheme needs to address the following issues:

     

    1. Despite availing of the maximum discount on the scheme, the content cost for operators remains higher than previous CPS deals, exacerbated as operators are not receiving any carriage fees.

     

    2. The scheme does not factor in volume discounts on the basis of an absolute number of subscribers offered through a given operator network.

     

    3. Channel pricing is based on filed RIO rates. These are not reflective of consumer preferences. For instance, Star Plus which enjoys 2x the viewership of Life OK, has a lower price than Life OK.

     

    4. To generate higher discounts, the scheme demands carrying maximum channels with 90 per cent penetration. This will result in a rich basic pack offering which will disincentivise future upselling to an operator’s high value packages.

     

    5. Even if operators are able to pass through content costs to subscribers, MSOs face the risk of paying more and collecting less as the current backend systems for operators are not robust and transparent enough to collect and pass on revenues for channels on an a-la carte basis.

     

    6. The scheme does not factor in HD channels. MSO action plan and execution risk Star has been transparent on rates and discounts for its channels. Some national MSOs have accordingly started to work on their blueprint of tiering channels through a broad revenue share arrangement with local cable operators (LCOs). On the backend, according to MPA, the operators now critically need to have their technology systems in sync with consumer preferences, collected through KYC (Know Your Customer) forms. They will also need to decentralise control by extending their consumer databases to respective LCOs to enable the upgrading and downgrading of packages as per consumer choice. As backend systems get re-engineered, MSOs will need to concurrently conduct roadshows and training programmes for LCOs. MSOs will also need to undertake marketing campaigns to create awareness on a consumer’s need to make choices on revised cable packages.

     

    MPA also feels that MSOs intend to pass their increase in net content cost to consumers by undertaking an average price hike of Rs 40-60 ($0.7-1) per month. Even if consumers accept the price increase, the risk to MSOs lies in collecting their legitimate share of incremental revenues from LCOs. In order to offset this, MSOs plan to shift to trade prepaid services, which should have positive consequences.

     

    Long term implications for the Pay TV industry

     

    Broadcasters: Currently, all broadcasters are looking to reduce carriage fees and bring it to parity with DTH in terms of total payout. A number of broadcast networks are taking a wait-and-see approach. Having already eliminated carriage in DAS markets, if Star manages to obtain reasonable viewership for its driver channels with a nominal growth in subscription revenues, MPA believes that others too will broadly follow Star’s approach.

     

    According to MPA, non-carriage discounted rate schemes could become the template for future content deals. This will have direct implications on several advertisement-skewed and reach-dependent genres, such as news and music. Channels in such genres might then remain feasible by converting to free-to-air. Launching new channels will become difficult and as a result, the industry could see rebranding and a frequent change in the programming mix of existing channels.

     

    MSOs: As carriage and placement revenues start to dry up, the priority for MSOs for the next 12 months will be to shift to establishing robust back-end systems for better subscription monetisation in phases I and II. Consequently, voluntary digitisation and reach expansion in phases III and IV could take a back seat. MPA in its report also points out that national MSOs have already invested and outsourced backend systems to renowned IT vendors, which need to now streamline the secondary point network in order to attain authenticated customer information and deliver strong customer support services.

     

    “Critical is the increasingly important need to successfully rollout trade prepaid services and rationalising content cost by identifying active paying subscribers which will address the current cash flow crisis and determine the future feasibility of an MSOs business model.

     

    As the industry shifts gears, we may see more consolidation of cable players which fail to invest and execute on establishing B2C processes,” says MPA.

     

    DTH: Over the last 30 months, the DTH industry had implemented a 53 per cent increase in its base pack pricing. Just when it seemed that rate hikes on base packs had hit a ceiling, the price hikes implemented by MSOs provided the DTH industry with additional headroom to undertake further price increases. In addition, with tiering of channels on cable, the value gap in the form of realisation per channel between cable and DTH operators will narrow, feels MPA.

     

    As per MPA, a lighter base pack for both cable and DTH will gradually result in the upselling of subscribers to high value packs, thereby boosting ARPU growth.

     

    Moreover, Star’s entertainment and sports channels have been key drivers for HD in India.

     

    MPA in its concluding remarks points out that acquiring Star’s HD channels on RIO makes it unfeasible for cable and thus enables DTH operators to push HD penetration aggressively for the next one year. Through attractive pricing and marketing, DTH operators could leverage HD to win some subscribers from cable.

  • RIO to affect Star’s sports and niche channel distribution: MPA

    RIO to affect Star’s sports and niche channel distribution: MPA

    MUMBAI: Star India’s new distribution approach has been the talking point for the industry. And now highlighting the same is Media Partners Asia (MPA) in its new report.

    Post the announcement of Reference Interconnect Offer (RIO) deals by Star, most multi system operators (MSOs)in order to keep both content cost and churn under check, opted to carry Star’s key Hindi channels on the base pack, along with free-to-air channels and lower RIO rate channels such as Nat Geo. In certain markets, 1-2 relevant regional channels have been bundled in the base pack.

    Not only this, many of the niche channels (English cluster) have been moved to higher or expanded basic tiers or available on a-la-carte basis.

    “This will adversely impact channel reach and viewership. However, the revenue losses on these channels will be partially compensated by reduction in carriage fee costs,” says MPA in its report.

    MPA, however sees a bigger risk, potentially to Star’s sports channels, as sizeable investments have already been made to creating non-cricket sports leagues leveraging Indian soccer and badminton.

    “These leagues are still in their infancy and require maximum distribution reach,” points out MPA.

    It further goes on to say that in cricket too, Star will broadcast the ICC World Cup in February 2015. However, according to MPA, with all India matches, semis and finals also available to viewers on public broadcaster Doordarshan, Star may have to rethink its incentive schemes in order to maximise its distribution of sports channels.  

    MPA estimates that the commercial rollout of package could take at least two to three months (completing in the early half of Q1 2015) and in the meantime, the delay will put pressure on the distribution of Star’s niche channels.

    “New channel launches for Star could also become equally challenging as it loses the luxury of having 100 per cent sampling on the cable platform,” it reports.

    In conclusion, Star’s new distribution strategy, will be a true acid test of consumer demand for its portfolio of channels. Viewership trends over the coming weeks will reflect such demand.

    “On a positive note, the outcome will help Star to prioritise and rationalise its content budgets, which have swelled across multiple genres, in recent years,” opines MPA.

  • Carriage fee on a rise again?

    Carriage fee on a rise again?

    MUMBAI: Delayed digitisation of phase III and phase IV areas have marred the hopes of broadcasters, multi-system operators (MSOs) and the local cable operators (LCOs) alike. With implementation of digitisation in phase I and II, while broadcasters were enjoying the reduced carriage fees, MSOs were hoping for better on-ground collections with increasing transparency. But all this has taken a U-turn with the Ministry of Information and Broadcasting announcing 2016 as the year when India will be fully digitised.

    The MSOs who have invested heavily for digitising phase I and II markets are still waiting for reaping the benefits of it. And now even the broadcasters who saw some reduction in carriage fees (industry sources peg it between 10 per cent to 30 per cent) during the first two phases have gone back to basics.

    If one has to go by the Media Partners Asia (MPA) report, the cable TV industry has seen a 14 per cent jump in carriage fees. The reason for the jump in carriage fee could be many. Here are a few reasons which we understand could be playing a role in the changed carriage fee pattern:

    1)    Delayed digitisation: The MSOs have already invested heavily in phase I and II and have also borrowed money for phase III and IV markets. Now with the government announcing the final dates for digitisation as 2015 for phase III and 2016 for phase IV, MSOs fear that the LCOs will not increase their collections from the ground.

    2)    Low ARPUs: Even in phase I and II areas, the ARPU hasn’t gone up as expected by the MSOs. And so they haven’t been able to recover the money they had invested.

    3)     New channel launches: Broadcasters launching new channels need greater reach and visibility and so pay more in order to get carried by the platform and also to ensure that it is available to all the subscribers of the platform. This in turn sets a benchmark for the other players also.

    4)    Lack of transparency: Even though one of the aims of digitisation was bringing in transparency and addressability, both haven’t happened as yet. The cable operators have not been able to get the consumer application forms filled and thus, are still unaware of the choice of consumer. Also, there is still under declaration of consumers. 

    “This is true especially for news channels, niche channels and the new channels that have been recently launched. While the existing channels have not seen any hike in carriage fees, broadcasters that launched new channels in the different genres, right from GECs to regional to music and movies have seen a jump in carriage fees, which ranges from 15-25 per cent,” says a distribution head on condition of anonymity.

    Another source close to the development agrees and says, “Yes! The carriage fee for broadcasters launching new channels have gone up. This can be anywhere between 20-25 per cent, depending on the distribution strategy of the broadcaster and the visibility it is looking for.”

    Many in the industry blame the new channel launches for the increase in the carriage fee. “While for the news channels the carriage fee had seen a drop by 10-15 per cent, the new channels that are being launched every now and then, sets a different benchmark. Since broadcasters want better reach for their new channels, they pay huge sums as carriage fee to MSOs and this affects the news channels as well,” says a news broadcaster.

    Even at the recently concluded MIPCOM 2014, Colors CEO Raj Nayak during a panel discussion had stressed that there needs to be complete implementation of digitisation. “While in the phase I of digitisation, the carriage fees had come down by 20 per cent, it has now gone back to square one and this is a dangerous trend,” he had then said.

    Viacom18 group CEO Sudhanshu Vats feels no different. In his recent interaction with Indiantelevision.com he had said, “Carriage, rather than continually coming down, has begun to rise again in recent months.”

    According to India TV chairman and editor-in-chief Rajat Sharma, when digitisation kickstarted, news broadcasters expected consumers to get better quality channels and carriage fees to disappear. “For the MSOs, it is the carriage fee from the news channels that helps them sustain, since they pay the GECs huge sums for getting their programming on their platform,” opines Sharma.

    Unlike the expectations by many, carriage fees haven’t yet been abolished.  “When phase I of digitisation was implemented, carriage fees did come down in terms of what was being paid in the four metros. The national level MSOs saw the benefits of digitisation and passed on some of that benefit to broadcasters. However, with phase II, it hasn’t happened. On the contrary they are going up and extortionist demands are being made again. Perhaps because in other parts of the country the MSOs are in partnership with local or regional players who do not want to let go of carriage fees even though that was meant to be a natural outcome of digitisation,” informs NDTV executive vice chairperson KVL Narayan Rao.

    Rao further adds, “It is impossible for news broadcasters to withstand payment of high carriage fees. Other components of digitisation like buoyant and fair subscription revenues, have not kicked in either. Something needs to be done about these aspects immediately. Carriage fees in particular have to be rationalised.” Rao also pegs the carriage fee increase between 10-30 per cent.

    As for Focus Network group CEO Neeraj Sanan, carriage fee revenues for MSOs are likely to reduce. “However the carriage paid by a broadcaster to an MSO, will increase post first year of DAS due to aggregation at MSO level and the ever increasing number of channels,” he adds.

    Even the MSOs agree that the carriage fee has seen an upward trend. “This is true mostly for the new channel launches. Broadcasters want better reach for their new channels and are ready to pay more carriage fee for those channels. The new channels are seeing a hike in carriage fee by about 20-25 per cent,” concludes the MSO.

  • IDOS 2014: How can the pay TV industry be made better?

    IDOS 2014: How can the pay TV industry be made better?

    GOA: India Digital Operators’ Summit 2014 kicked off at The Leela in Goa on 25 September. Opening the conference, Indiantelevision.com CEO and editor in chief Anil Wanvari and Media Partners Asia (MPA) executive director Vivek Couto gave a brief on the state of the TV nation and transition to the broadband digital economy.

     

    Wanvari highlights how the state of the industry was a few years ago and what it has become now after the advent of conditional access system (CAS) and digital addressable system (DAS). Content makers aka broadcasters have been demanding more revenue from the pay TV industry. While the capex and opex for them has been high, the return continues to be low. The MSOs and DTH operators have been investing to expand their headends and build subscriber base respectively. “While it is a good business now, the real question is if each one of us is willing to make it a great business?” he asks.

     

    In order to strengthen the business, Wanvari recommends a few suggestions that could help grow the industry. The first thing is to look at digitisation and pay TV with a changed mindset that it will be beneficial to all. The government could look at setting up a digitisation transition fund that will help educate, train, seed capital and reward people who follow the rules and ensure strict penalties for those who don’t.

     

    Subscriber management system (SMS) should be set up with correct details and billing of the services provided to customers. The government could also look at laying down minimum standard rules for set top boxes (STBs) to ensure quality control. His final suggestion is to leave pricing to the market rather than initiate 10 to 15 per cent price rise every now and then.

     

    Providing a glimpse into MPA’s study on the pay TV industry in India, Couto says that out of the 262 million households in the country only 162 million houses have a TV. In this, 27 million is taken up by the free to air service providers such as Doordarshan and Freedish while the rest comes under cable and satellite.

     

    Couto highlights that over Rs 32000 crore has been invested in digitisation since 2005 with a bulk of the investment coming from the DTH operators followed by the MSOs and LCOs since 2011. Out of this, over Rs 11000 crore in the last 24 to 30 months has been invested by MSOs and LCOs. “India offers scale but limited monetisation,” he says. What digitisation will do primarily is increase transparency, addressability, tax collection and employment. Over 120 million STBs are needed over 10 years and nearly 47 per cent share of the total market will come through broadband.

     

    The tiff between the three stakeholders continues with the LCOs fighting for revenue share, MSOs facing crash crunch and broadcasters worried about increasing carriage fees which the MPA report stated as having increased by nearly 14 per cent in Q1 FY2015.

     

    In terms of scale, India struggles as the country with the lowest average revenue per user (ARPU) but it has one of the best channel services. Couto says that it is time for the industry to move to retail pricing than stick to wholesale tariff because the competition will keep the prices low. The need of the hour is for MSOs and broadcasters to come together and design packages, incentivise upselling, indentify opportunities for sub segmenting and create new genres. The key to which lies in raising prices to consumers.

  • APAC digital subscribers to reach 503 million by 2018: MPA

    APAC digital subscribers to reach 503 million by 2018: MPA

    MUMBAI: Media Partners Asia (MPA) has come out with its report on the Asia Pacific pay-TV and broadband market for the next five years. It predicts that DTH satellite pay-TV customers in Asia are expected to grow from 56.3 million in 2013 to more than 110 million by 2018, a CAGR of 14 per cent.

     

    The report titled ‘Asia Pacific Pay-TV and Broadband Markets 2014’ states that by 2023, DTH’s share of the total pay-TV market will nearly double to 24 per cent as the customer base reaches 150.4 million. Meanwhile, HD DTH subscribers will increase from 10.4 million in 2013 to 37.3 million by 2023, driven by high growth in India and China as well as steady growth in Japan, Korea and Southeast Asia.

     

    DTH subscription revenue is expected to grow at a five year CAGR of 9 per cent to $ 12.3 billion by 2018 and $ 15.2 billion by 2023. It also predicts that the market for DTH pay-TV will further consolidate as growth converges across fewer operators in markets such as India and Indonesia. In markets such as Thailand, DTH pay-TV is struggling as free DTH services have started to breed, penetrating 60 per cent TV homes. One such is Free Dish that will prove to be important to digitisation in rural and smaller towns.

     

    The APAC pay-TV market will grow at a 10 per cent CAGR between 2013 and 2018. This will be enhanced by the subscriber jump from 312 million in 2013 to 503 million by 2018 while digital penetration of pay-TV homes expands from 62 per cent to 83 per cent.

     

    Commenting on the findings, MPA executive director Vivek Couto said, “We see operating leverage growing for market leaders in India, Indonesia and Malaysia in particular as well as long-term upside from strategic recalibration in Australia and New Zealand. Better monetisation in the Philippines should help the market leader properly scale its DTH business and take it to the next level. We also predict incremental growth and value in Vietnam.”

     

    The report states that among maturing markets, Malaysia is a leader with Astro as one of the most innovative operators in the world, good at increasing both subscriber growth and ARPUs as well as investing in product innovation. DTH ops in Australia and Japan continue to face headwinds. Hybrid DTH-IPTV distribution has helped sustain KT SkyLife’s proposition in Korea.

     

    In India, broadband is a long term consideration even though all the top four DTH operators are looking at mobile partnerships and wireless broadband strategies.

     

    IP-based distribution and broadband delivery is a challenge for DTH networks which are adapting to these realities to reduce long-term challenges. In Korea, the KT SkyLife combination retails triple play services. In Indonesia, MNC group that owns MNC Sky Vision (MNCSV) plans to rollout a bundle of IPTV and fiber-based broadband services and merge them with MNCSV.  In Malaysia, Astro has adapted to IPTV partnerships but with slow progress. In Philippines, Cignal has also embraced hybrid IP delivery.

  • DTH sector in India to grow sales at 19 per cent CAGR between 2013-18: MPA

    DTH sector in India to grow sales at 19 per cent CAGR between 2013-18: MPA

    MUMBAI: India’s direct-to-home (DTH) satellite pay-TV sector remains a growth oriented industry with significant potential for strategic and financial investors, according to a new report published by Media Partners Asia (MPA).

     

    The report, entitled ‘India DTH Market Overview–Key Dynamics & Future Outlook’, forecasts that India’s DTH pay-TV sector will generate revenues of $ 4.04 billion by 2018, a CAGR of 19 per cent from $ 1.71 billion in 2013 and by 2023 the sector will generate revenues of $ 5.6 billion. In an earlier report, MPA had said that the DTH active subscriber base will increase from 37 million in 2013 to 60 million by 2018 and 70 million by 2023. This implies a 39 per cent share of the overall market by 2023 and a 56 per cent share of the digital pay-TV market.

     

    DTH operators have been working together to improve the overall economics for the business by reducing the amount of free viewing offered to new subscribers and recalculating the incentives dealers receive for renewing subscriptions.

     

    ARPU growth, according to the report, will be partially limited as DTH expands nationally, with low-income homes coming into the mix, although MPA sees a greater contribution from high- ARPU HD subscribers. According to the report, HD represented 6.9 per cent of the total active DTH base in 2013; which MPA expects to grow to 16.1 per cent by 2018 and to 20.1 per cent by 2023. MPA sees total DTH ARPUs expanding from $ 4.0 per month in 2013 to $ 5.7 by 2018.

     

    Digital TV (DTV) has started to gain widespread acceptance across consumer households in India, driven largely by the growth of DTH satellite pay-TV platforms. Data from MPA indicates that DTV penetration, including digital cable and digital free and pay DTH platforms, has grown from less than 1 per cent in 2006 to 46 per cent as of 31 December 2013.

     

    The six DTH pay-TV operators in the market have in aggregate contributed to 23 per cent penetration as of 31 December 2013, providing a level of market leadership due to superior capitalisation and a stronger consumer focus built around product strength and innovation, including tiering, HDTV and DVR services.

     

    “DTH operators have been working together to improve the overall economics for the business by reducing the amount of free viewing offered to new subscribers and recalculating the incentives dealers receive for renewing subscriptions. ARPU growth will be partially limited as DTH expands nationally, with low-income homes coming into the mix, although we also see a greater contribution from high-ARPU HD subs. HD represented 6.9 per cent of the total active DTH base in 2013; we expect this to grow to 16.1 per cent by 2018, and to 20.1 per cent by 2023,” said MPA India VP Mihir Shah.

     

    Key market trend highlights of the report:

     

    Rational focus: Operators are increasingly focused on growing profits as opposed to solely increasing volume, often at the expense of profitability. As a result, operators have increased their basic prices, while at the same time reducing the trade margin arbitrage by Rs 200-250 to minimise rotational churn. Although subscriber additions post October 2011 have witnessed some slowdown. According to MPA both the quality of subscribers and ARPUs will continue to improve going forward.

     

    DTV mandate: MPA believes that the implementation of mandatory cable digitisation by the government will be an important catalyst for growth in the DTH sector. DTH operators are relatively well positioned due to the strength of their B2C businesses (as opposed to B2B approaches amongst cable MSOs) and their experience and investment in tiering, subscriber management and billing and sales and marketing. In addition, as part of its reforms, the government has now permitted international companies to own up to 74 per cent of cable and DTH platforms.

     

    HD penetration: As per MPA’s report, HD penetration will grow significantly in the future, rising from less than 7 per cent of active DTH subscribers currently to over 20 per cent by 2020. MPA’s estimates are based on benchmarks in the US, UK, Latin America and Southeast Asia. In the UK, incumbent DTH operator BSkyB currently has more than 50 per cent of its subscriber base adopting HD. Malaysia’s Astro has also demonstrated laudable rates with 49 per cent penetration at present on its DTH platform. Increase in HD channel offering is critical for growth in HD penetration. However for some of the mature global operators, MPA sees HD penetration as a percentage of total subscribers capping out at 60-65 per cent.

     

    Upside capped by tax and regulation: A ~30 per cent drain of gross DTH subscription revenues – comprising a 12 per cent service tax, 8-10 per cent entertainment tax and a 10 per cent license fee – continues to hamper the industry’s ability to improve profitability. Although industry stakeholders are lobbying the government to change the license fee terms and make deductions based on adjusted gross revenue, these are yet to be finalised. A further cap on future industry upside comes in the form of spectrum issues resulting from the absence of an open skies policy that would allow DTH operators to directly source transponder capacity from foreign satellite operators, as opposed to the current system of going through the Indian Space Research Organisation’s (ISRO’s) commercial arm Antrix.

     

    Consumer proposition, technology key to future subscriber additions: Ramping up subscriber additions as analog cable subscribers turn to digital will largely depend on the consumer proposition offered by the DTH and cable operators. Gaining an increased share of new subscribers will hinge on designing and marketing innovative and simple packaging structures, bearing in mind that analog cable subscribers are used to an all-you-can-eat single package structure. Technology will also be key, as compression standards and middleware deployed by operators will play a crucial role, though not immediately visible, in differentiating service offerings and providing HD and value added services (VAS) such as interactive services, 3D and VoD.

  • Only 70 per cent of the Indian pay-TV market will be digitised by 2023: MPA report

    Only 70 per cent of the Indian pay-TV market will be digitised by 2023: MPA report

    MUMBAI: The process of digitisation in India currently seems to be stuck in limbo. Even with several deadlines being set, the country doesn’t seem to have progressed much even in digital addressable systems (DAS) phase II, let alone phases III and IV. A new report from Media Partners Asia (MPA) has predicted key findings about the cable and DTH industry in India between 2013 and 2023.

     

    It expects the next five years to be a period of robust growth of India’s pay-TV market. MPA projects that the pay TV industry in the country will grow from $7.4 billion in revenue in 2013 to $12.3 billion by 2018.

     

    The growth in revenue will be equal to an average annual growth rate of 11 per cent between the years 2013 to 2018. By 2023, it expects the industry to generate revenues of approximately $ 16.4 billion. The findings by MPA were published in the report ‘India Pay-TV and Broadband-Future Trends’.

     

    The study states that by the end of 2013, India had approximately 65 million paying digital subscribers. MPA projections indicate that only 70 per cent of the Indian pay-TV market will be digitised by 2023.

     

    The total number of TV households in India is currently pegged at around 160 million with nearly 20 million on terrestrial only. This will be the growth opportunity for alternative platforms as cable and DTH will find it unviable to penetrate into the interiors of the country. The Ministry of Information and Broadcasting (MIB) has given a deadline of 31 December 2014 for completion of digitisation. If one goes by the MPA report, India has a long way to go for 100 per cent digitisation.

     

    From 2015 to 2017 will see an upward trend as DAS will take off in phase III and IV areas. After 2017, the time will be for consolidation and monetisation as subscriber growth will decelerate.

     

    While the growth during 2009 to 2013 was driven by volume, the next five years will be led by average revenue per user (ARPU). At the end of the 2018, pay TV subscribers will hit 165 million and by 2023, it will be 180 million. This implies a long term penetration of 80 per cent.

     

    The growth will also give wide space for alternative platforms such as Doordarshan-owned Free Dish, headend-in-the-sky (HITS) and over-the-top media (OTT) apart from cable and DTH, which will address the need gap between TV households and pay TV subscribers.

     

    DTH industry revenues are expected to reach $4 billion by 2018 and $5.5 billion by 2023. This will be due to healthy subscriber additions from 2014 to 2016 and by improved churn and suspension management. The active DTH subscriber base is expected to grow from 37 million in 2013 to 60 million by 2018 and 70 million by 2023. Thus, DTH will have a 39 per cent share of the pay-TV market by 2023 and 56 per cent share of the digital market.

     

    MPA predicts that the total digital cable subscribers will be 50 million by 2018 and 55 million by 2023. Digital cable conversion will shoot up from 29 per cent in 2013 to 48 per cent by 2018 and 50 per cent by 2023. This will enable growth in cable broadband. It expects share of cable in the fixed broadband market to grow from 6 per cent to nearly 15 per cent from 2013 to 2023.

     

    The projected total pay-TV channel revenues for broadcasters, including advertising and subscription will grow from $3.3 billion in 2013 to $6 billion by 2018 and $8.3 billion by 2023.

     

    Meanwhile the pay-TV ad market is expected to grow at 8.6 per cent CAGR over 2013 to 2023 while broadcaster subscription revenues are expected to grow at 11.3 per cent over the same period. This will be due to improved macro-economic conditions, sub-segmentation of existing genres and new advertiser categories.

     

    “The Indian market is important because of its accessibility for global media distributors and investors and its high levels of pay-TV penetration. Ever changing regulations are destabilising but the government’s DAS mandate will be an important catalyst while improved supply side factors, including healthy financial markets and investments from international strategists are also critical,” says MPA India VP Mihir Shah.

  • Our aim is to roll up all the taxes under one GST: Uday Singh

    Our aim is to roll up all the taxes under one GST: Uday Singh

    The word piracy sends shivers down the spines of all content owners, but there is one man who has made it his mission to eradicate piracy from the media and entertainment space. That man is none other than Motion Picture Distribution Association (India) managing director Uday Singh.

     

    With over 28 years of sales, marketing and general management experience in scaling up operations and building business from start up for MNCs in India and attaining a leadership position in the market and business with significant turnaround and change management; Singh has done it all.

     

    He has key experience in media entertainment, consumer electronics, domestic appliances and multimedia industries. He has had stints at Philips, Sony Pictures Entertainment (India) and PVR Pictures earlier.

     

    Being a creative and result driven executive with expertise in setting up new markets developing and delivering strong results; Singh has been ensuring in getting the various industry stakeholders together to fight against piracy.

     

    Speaking to indiantelevision.com’s Sidharth Iyer, Singh dwells on various perennial issues like piracy, high taxation, specific copyright laws and the difficulties that MPDA faces in propagating anti-piracy in the country.     

     

    It’s been five years since MPDA India has been present in the industry, how has the journey been? Highlight your roles and responsibilities.

     

    There are three aspects: first there is the legislative side where we look into getting a specific legal framework into place which can protect copyright. Next we take care of the enforcement, which is basically keeping a check on people who steal content and monetise from the same by redistributing it across the globe and finally the outreach, how do we best reach out to our first line of defense – which is the cinema staff and theatre owners – educating them on piracy and how it works, so that they can recognise it and nip it at the bud.

     

    On the legislative side we have carried out a lot of initiatives. 90 per cent of all pirated copies are camcorded in cinema halls, and an Ernst & Young 2008 report claims that as much as Rs 16,000 crore is lost every year due to piracy and as many as 577,000 direct jobs are also lost as a result of theft and piracy, afflicting India’s entertainment industry.

    We have been working with local bodies and try and implement the global best practices out here. We have also observed that many jurisdictions like in US, Philippines and other regions in the Asia Pacific as well, specific camcording legislations have made a big difference in getting piracy down and we intend to bring that practice to India as well.

         

    Is there a set guideline for understanding the copyright laws in the country? Have you managed to reduce the taxation on films?

     

    We have been lobbying with the government to have provisions made for the same, and the cinematography bill does carry some provisions because only very specific provisions can make a difference, as our copyright laws tend to be very broad and its only best to have specifics in place to better understand and implement the copyright law in the country.

     

    The other major hurdle for films is the taxation levied on them, and being one of the highest taxed industries it does take a toll on the budget and revenue scale. We have been working with other industries and the government to rationalise those taxes and eliminate some of them if possible and hopefully roll them all into a single goods and services tax (GST).

     

    However there is a service tax on the input side, so some of the studios that are producing the movie domestically have to face it by increasing its production costs. Currently there are three levels of taxes; the service tax, the entertainment tax and the local body tax. Thus, our recommendation and appeal to the government and the authorities is to roll it all into one single GST to avoid any duplication.

     

    What are the challenges faced by MPDA and how do you overcome the same?

     

    There have been issues in the television side of things, where we have been talking to the government and making our submissions on issues such as, liberating the pricing, the must provide and must carry provisions, among others.

     

    It was also heartening to see that the foreign direct investment (FDI) in the television and broadcast sector also witnessed a hike. So, we look at very generic issues and how the government can better regulate the media and entertainment sector, primarily focused on where our studios feel where we should get involved on the legislative side.

     

    We also have the Los Angles Film Council, where we have been lobbying for the ease of shooting and working with the government for getting to a single window clearance, there are 70 clearances otherwise required before even shooting a single frame.

     

    Our efforts and initiatives will be again presented in an E&Y report, which talks about how to simplify, incentivize and further how to promote film tourism. The plan is to promote film tourism in a big way and we have some great examples of how it has been done in other places like Canada and Thailand. Keeping in mind that we have some great technicians and production crews here, India can become an important destination for films as well in the near future.

     

    On the enforcement side, we are no longer chasing the guys on the streets as it has all moved online and it’s now gotten into camcording. We have managed to eliminate quite a few significant release groups, who have been copying and redistributing a lot of the films. 

     

    MPDA has played a big role in ensuring that piracy is looked at as a serious offence, how do you intend to put an end to this evil?

     

    Our intention is not to catch a kid who’s taking a trophy shot in front of the screen, but the people who actually steal the content and make a living out of it. After 2012, there have been almost 67 incidents where we have apprehended pirates who used to capture the video and slap on a different audio and export it to other neighbouring countries.

     

    We also work with cinema staff and have educated nearly 1,400 of them on what are the best practices to propagate anti-piracy, by putting up signs in the surroundings of the theatre. They have also been educated on how best to deal with incidents of camcording. We have also tried to sensitise various law enforcement authorities on the various issues and problems due to piracy and how they can help in preventing such occurrences.

     

    I believe, unlike ever before, we have been able to work hand-in-hand with the local film industry and really come together as stakeholders of the industry and really put an end to this evil.

     

    In the recent past you have associated with the Anti-Video Piracy Cell of Andhra Pradesh, and also carried out various initiatives on the ground, your thoughts on the same…

     

    The Anti-Video Piracy Cell (AVPC) of Andhra Pradesh has been one of our brightest spots in the fight against piracy. It’s been a very proactive cell and very aware of the changing trends in the space of piracy. They have an in-house team for the mapping of sights, and we found a great ally in them for our fight against piracy.

     

    With AVPC, we only thought that the need is to contemporize the way we catch hold of the pirates and with the ‘Indian Movie Cop’ and other such applications we have tried to keep a check on digital piracy.

     

    The app really helps in educating everyone on piracy and the laws of the land, and to keep it interactive we also put up trailers of upcoming releases just to give the user that extra bit to help serve a larger cause among other reward schemes.

     

    It is a known fact that there have been leakages on the cable TV front, how do you plan to overcome the issue?

     

    Digitisation has really helped on this front and it has certainly not been an easy process, but a large step by the government to clearly make this decisive move to get to know who the subscribers are and get to know where they are.

     

    Over a period of time, the broadcast industry has taken interest to resolve the problems relating to cable leakages. It used to be very robust in the analogue world, and still continues to happen, but like the film industry, the broadcast industry too needs to come together to address this perennial issue.

     

    With a lot of Hollywood studios currently operating in the country, does it help in better promotion of their interests among local production houses?

     

    Largely, these are decisions taken by the individual studios and it’s for them to be able to decide with whom they want to tie-up. There have been instances in the past three to four years where a lot of studios have taken an active part in the local productions.

     

    But, again it’s their own strategy on how they best want to enter the market. And once we address larger issues like taxation, ease of operation or piracy, we would be able to provide a substantially better climate for them to come in here.

     

    Is the regulation in India strong enough to support your initiatives? If not, what is lacking?

     

    There is a combination of issues; the laws are very generic in nature – while they may have served their purpose – increasingly we have seen that when there are specific laws for specific issues there are better results.

     

    When we talk about the copyright amendment, we are talking about the technological protection measures. There is an access control and a copy control and barring of hacker tools. In our current legislature, we are talking about copy protection and not about the access; so with the evolving technology, it took almost 10 years to pass that bill.

     

    So legislation is always going to be a long time consuming process and what we have to do is ensure in bringing to the government’s notice how other jurisdictions have handled these issues and what have been some of the best practices.

     

    The second aspect of it is enforcement; in terms of the police force they are certainly overburdened and we all recongnise that, with copyright figuring in the lower priority offences. But wherever we have gone and educated them about the issues relating to piracy, they have responded well.

     

    There are cases where we find the judiciary more proactive in a particular area like Delhi, but in recent history we have had judgments from Mumbai, Chennai and Kolkata as well.  So almost all the high courts are getting up to speed on all the copyright issues.

     

    And with the piracy now moving online, there is a need for a lot of hand holding to make content distributers and owners aware of how rapidly the landscape is changing. And we can’t ignore the fact that a lot of these offenders are linked to other organised crimes too, thus becoming difficult to track them down.

     

    Can there be a stop to piracy globally? What preventive measures can be taken?

     

    There can’t be a total bullet proof plan for this; it’s very similar to other crimes. But, what we can clearly do is to create a favourable environment where if not eradicate then at least we can apprehend the criminals.

     

    Eventually you will find that there are only a few people who are causing most of the damage and they are part of much more organised syndicates. There also needs to be an updation of the loss due to piracy report as there has been a huge increase in the number of internet connections since 2008.

     

    The need of the hour is to also educate the film industry on how things work, with most films being made available online just hours after its release. There have been attempts made to resolve this issue, but to no avail.

     

    There are two ways by which this has been kept under check internationally, one to have an administrative relief and the other a judicial relief. We have noticed that these work in blocking content from getting leaked outside the authorised personals’ hands.    

     

    Recently there has been a rampant emergence of rogue sites like Torrentz, what is MPDA’s take on them? Also, your thoughts on user generated content sites like YouTube.

     

    These rogue sites are primarily designed to steal content and monetise by making it available online. Mostly they make money through advertising and in certain cases even through subscriptions. It’s surprising to find that a lot of advertisers who are associating their brands with these rogue sites are only creating a bad impression of themselves on people who then associate them with supporting piracy. They may be having subscriptions, because they may have a camcorded print and they put it up very quickly and start building a premium subscription revenue model.

     

    To counter these sites, what we have done is listed out the legitimate and licensed sites from where movies can either be streamed or downloaded with a cost attached to give the people the option of viewing legitimate content and also getting the content owner his rightful due.

     

    Coming to the user generated content sites commonly known as UGCs have brought in a lot of mechanisms to deal with piracy among other issues, but still it’s not been enough. Lot of them have their filters and they have been trying to work with the industry on how best it can work. But in many cases we find that without the permission of the user, any site that puts up that content is something that we are not comfortable about.

     

    Eventually what I believe is, with more and more filters coming in and more and more legitimate sites coming up the whole content distribution and exhibition will undergo an evolution.

     

    In the past, physical copies of pirated VCDs and DVDs were available on streets. You don’t find many of these pirates nowadays, what has MPDA done to eradicate this problem?

     

    Actually in the past few years, we have not really focused much on that front. In the 1990s we were really going after each and every pirate on sight and almost 5,000 to 6,000 cases were being registered, but without a single conviction.

     

    We realised that the source was through camcording and three major areas where it was taking place was Ahmedabad, Indore and Ghaziabad. As we started making inroads and worked with the police and the theatre owners to eradicate these rogues from the streets, they went deeper into the heartlands.  

     

    The DVD is practically dead… so what is the way forward for moviemakers to monetise their content?

     

    The consumption of movies has not gone down, but the way the movie is being consumed has evolved. And technology is allowing us to give legitimate content. For example with Apple TV the user can simply just click on the movie that he wants to watch and buy it or rent it.

     

    So the consumer is looking at all kind of content, for the big screen, mobile screen, content on the go, and something wherever he can watch. Thus, to cater to the user’s interests we too are changing our business models to accommodate the demands and supplement those demands with supplies.

      

    In India the video market never really took off like in other parts of the globe. The time when we were looking at buying VCDs, DVDs came into play and now Blu-Rays are in the market, so with constant evolution taking place, the best thing is to move along with the choice of the user and it also helps as we can directly skip to the digital era.

     

    What is MPDA’s plan for the year 2014?

     

    In FICCI Frames 2014 we launched a report with Deloitte on the economic contribution of the motion pictures business in India. We have seen that the media and entertainment sector contributed substantially, almost Rs 50,000 crore in 2013 and generates almost 1.8 million jobs.

     

    It is very important that when we talk to the government they realise the potential of this sector and given the right inputs, it has the potential of proving more employment and also contribute handsomely to the GDP growth of the country.

     

    Currently, it’s at a growth rate of 12 per cent, which is almost two and a half times our GDP growth and it can grow at a faster rate if given the proper impetus.

     

    During the year we will continue to simplify the process for films by getting in the single window clearance. So our next step will be to closely look at it and incentivising and finally promoting the initiative. And we would help the industry flourish and get to its optimum potential.

  • Cisco increases its reach to 100 million digital TV homes in Asia Pacific

    Cisco increases its reach to 100 million digital TV homes in Asia Pacific

    MUMBAI:  In the rapidly-growing digital television industry in Asia Pacific, Cisco, a provider of conditional access (CA) and digital rights management (DRM) solutions, has secured content that is delivered to more than 100 million digital homes in the region.

    Using an industry-estimated average of 3.3 people per household, Cisco’s VideoGuard conditional access and digital rights management technology now provides the critical protection of premium content to over 340 million viewers.

    Cisco has also developed a research and development (R&D) center in Bengaluru that is dedicated to the development of video technology. According to the MPA report of May 2013, the company currently enjoys the largest market share of the estimated 257 million digital TV homes in Asia Pacific.

    Service Provider Video Software Solutions vice president sales, Asia Pacific Sue Taylor said, “Achieving the milestone of over 100 million digital homes in this region is a testament to our commitment to Asia Pacific over the past 20 years, and our partnerships with some of the most successful cable TV and DTH satellite platforms in the region. This industry in Asia Pacific is one of the fastest growing and most dynamic in the world. We look forward to serving million more households that can benefit from Cisco’s enhanced TV-viewing experiences, as the demand for advanced services and applications surges.”

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      Cisco® VideoGuard conditional access and digital rights management solutions make Cisco the leading CA provider in Asia Pacific with a market share of 31 per cent (Source: Screen Digest Report 2013 and Cisco’s internal subscriber data).
     

      Cisco is a trusted pay-TV technology partner for over 150 Pay-TV operators as well as media and entertainment companies worldwide, including leading Direct-to-home (DTH) and cable operator customers in Asia Pacific like Airtel Digital TV, Astro, Foxtel, Hathway, Oriental Cable Network, Sichuan Cable TV, Tata Sky and DEN Networks.

    Cisco recently announced the key milestone of over 30 million digital TV homes in India with an estimated 150 million viewers.

  • India, China prime drivers of pay-TV revenue growth in Asia, says MPA

    India, China prime drivers of pay-TV revenue growth in Asia, says MPA

    MUMBAI: Asian tigers China and India together are expected to contribute almost 69 per cent of pay-TV revenues in the Asia Pacific from 2012 to 2020, according to findings of a new report by Singapore-based pay-TV research firm Media Partners Asia (MPA).

    MPA analysis shows that China and India will contribute 46 per cent and 23 per cent respectively to pay-TV industry revenue growth between 2012-20. Excluding China, India‘s contribution grows to 42 per cent, followed by Korea and Japan at 12 per cent and 13 per cent respectively, and Australia at 7 per cent.

    According to MPA, India‘s contribution reflects large volumes, a significant growth in accessible digital subscription revenues (distributed evenly across the value chain) and a large local advertising pie.

    In Southeast Asia, Malaysia leads with a 5.5 per cent contribution to revenue growth, driven by the growth of ARPUs and ad sales. Advertising revenues will also experience significant growth from a low base in key Southeast Asia markets such as Indonesia, Philippines, Thailand, and Vietnam.

    MPA forecasts indicate that Asia Pacific pay-TV industry revenues will grow at a 7.6 per cent CAGR between 2012 and 2020, doubling from $48 billion to $86 billion.

    Within this segment, subscription fees will grow at a 7.4 per cent CAGR, rising from $37 billion to $65 billion over the same period while net advertising revenues, calculated after estimated discounts, will grow at 8.1 per cent CAGR, reaching $21 billion in 2020 versus $11 billion in 2012, the report says.

    The digital pay-TV homes in Asia are projected to reach 696 million by 2020 from 444 million in 2012 driven by strong subscriber growth in India and China. Asia Pacific is expected to have 631 million digital pay-TV homes by 2017.

    The report adds that China and India will contribute 66 per cent and 21 per cent respectively to Asia Pacific pay-TV subscriber growth between 2012 and 2020.

    According to MPA, the Asia Pacific pay-TV subscriber growth is expected to witness robust growth with 13-14 million new subscribers added every year between 2013 and 2016, moderating thereafter though still adding close to 7 million subscribers per year by 2020.

    In Asia excluding China, India accounts for a massive 63 per cent of new subscriber growth between 2012 and 2020, underlining its huge importance to the pay-TV ecosystem, while Southeast Asia will contribute 16 per cent led by Indonesia at 7 per cent.

    Adjusting for multiple connections or homes, pay-TV penetration in Asia excluding China will grow from 53 per cent in 2012 to 61 per cent by 2020.

    Net new subscriber additions totaled 31 million in 2012, with year-on-year customer growth at 8 per cent. Excluding China, new pay-TV subscribers came in at a somewhat milder 13.4 million in 2012, taking the overall Asia ex-China subscriber base to 211 million.

    The growth in Southeast Asia was strong with 3.5 million new subscribers. India experienced a slowdown but managed to add close to 6 million new subscribers.

    Driven by digital TV (DTV) transition in China, India, Korea and Taiwan and the steady growth of DTV pay subs in Southeast Asia, MPA sees total digital subscribers growing from 257 million in 2012 to 539 million in 2017, and 626 million by 2020. Digital penetration of total pay-TV subs will grow from 58 per cent in 2012 to 90 per cent by 2020.

    After adjusting for multiple connections in a household, the MPA forecasts indicate that pay-TV penetration will climb from 51% in 2012 to 68% by 2020.

    The HD pay-TV subscriber universe is expected to rise exponentially to 160 million by 2020 from 37 million subscribers in 2012, while DVR subscribers will grow to 18 million from 6 million over the same period.

    China will be the major contributor to HD growth, followed by India, Japan, Korea, Australia, Taiwan and Malaysia, the report explains.

    The projections are published in a new report called Asia Pacific Pay-TV & Broadband Markets, an analysis of consumption, investment and revenue generation across pay-TV, broadband, digital TV and interactive value added services in 18 Asia Pacific markets.

    Commenting on the findings, MPA director Vivek Couto said, “A steady growth in population and a young demographic, combined with a rising middle class and the spread of wealth amongst local groups, is driving strategic decisions and execution in the pay-TV industry. These factors, in turn, will help boost household formation and consumer spends. This will also help grow pay-TV consumption and investment.”

    According to Couto, subscriber growth and revenue generation will be driven by: (1) Continued investment in local content, and the growth of localization among global and regional brands; (2) Digitalization in emerging markets; and (3) The growth of HD, premium and on-demand services in more mature markets.

    Significantly, the MPA report also notes: The growth of mobility and broadband penetration (with fiber expected to play a larger role in the future) is also influencing pay-TV strategy, execution and consumption.

    Fragmentation of eyeballs is growing with the proliferation of multiple devices. This is also driving consumption of illegal online video in many territories. The response of pay-TV companies has been defensive and aggressive in equal measure, the report notes.

    In 2012, TV Everywhere (TVE) type solutions with improved windows have been deployed across most of the region largely authenticated to customers with a pay-TV connection.

    Arguably, the most aggressive responses have come from content powerhouses that own most of their IP with clear packaging and a commitment to product innovation, the report concludes.