ITV

Tag: Vivek Couto

  • How will DTH drive value in future?

    How will DTH drive value in future?

    GOA: Thus far, DTH has not been able to create the kind of consumer base it rightly deserves. Reason being: DTH players have been faced with several obstacles including subscriber leakage on ground, high levels of cash burn and the perennial issue of satellite capacity. What then are the key ingredients required for DTH’s value creation story, going forward? Exactly the question this session tried to address.

    Moderated by Vivek Couto, the panel comprised Videocon D2H CEO Anil Khera, Dish TV executive vice-president and strategy Gaurav Goel, MEASAT Vishal Mathur, Kotak Securities senior analyst Amit Kumar and Macquairie capital senior VP Ausang Shukla.

    “The major challenge that we face is to correct pricing of STBs from Rs 1600-1700 to just Rs 400-500, thus preventing rotational churn,” voiced Khera.

    Goel supported this problem adding: “The pre-paid model is tough, as the subscriber pays for let’s say only for two months in a year as the existence of analogue in 50-60 per cent households is still a hindrance and we end up having a loss in revenue.”

    Addressing capacity and investment-related issues faced by DTH players, Tata Sky CEO Harit Nagpal said: “I am writing my own destiny and thus investing Rs 900 crore on the conversion of old MPEG-2 services to MPEG-4. We have already done it for a million subscribers and soon will look at changing it for six million more.”

    The panel observes that the DTH sector will see positive development only once it stops chasing additional subscribers and looks at the bigger picture of catering to consumer needs instead. In the past three to four years, DTH players have realised that with more channel carrying capacity, their prices are also headed north and that will cater to better ARPUs.

    Said Kumar: “The key issue to address is the pricing of packages and the fact that they are offering 200 channels now as compared to 80-100 channels earlier and still haven’t seen a change in their ARPUS.”

    Shukla agreed: “The major problem with the DTH sector getting investments is that there hasn’t really been much growth witnessed in terms of either subscription growth or cash flow.”

    Another revelation is how dealing with capacity is a major problem although there is demand for HD and Indians are easily influenced by the experience of watching a cricket match or their favourite movie in HD. With 4K technology coming into live events with FIFA, more than capacity, the need of the hour is having a back-up satellite.

    “What Sun Network experienced in 2009 was a real sorry affair, as it witnessed a complete blackout because of satellite failure, that could have been avoided if it had a back-up satellite,” said Mathur.

    Also, no thought has been given to other avenues like using a BSS (Broadcast Satellite Service) band along with the FSS (Fixed Satellite Service) band – which is already in use. The difference between the two is that even as FSS can carry channels between 14-17GHz, the BSS band can carry an equal number of channels on a 12 GHz signal.

    Added Mathur: “The issue is that there are seven DTH players who among them share 70 transponders with each of them requiring eight to ten transponders.”

    The panel felt that there has to be some logic behind the consolidation of platforms as there is only a 25 per cent churn and with consolidation, there will be a further reduction in the number of subscribers.

    So the panel agreed that consolidation of DTH platforms is not the panacea for getting investors. Rather, they have to focus on catering to subscribers’ needs.

  • IDOS 2013 to kick off in Goa on 27 Sep

    IDOS 2013 to kick off in Goa on 27 Sep

    MUMBAI: The countdown to the ninth edition (and second under its current
    nomenclature) of the annual India Digital Operators Summit (IDOS) has begun with the two-day event kicking off tomorrow at The Leela in Goa.

    A joint initiative of the Indiantelevision.com Group and Media Partners Asia, the summit will discuss and debate the hot-button topic of the digital television opportunity in India, what with the implementation of Phase II of digitisation nearing completion in three major metros – Delhi, Kolkata and Mumbai and in another 38 cities all over India.

    IDOS 2013, themed ‘Harvesting the fruits of digitisation’ will highlight pertinent issues faced by industry and offer valuable insights into how other key Asian markets have succeeded in their digital transition.

    Participants include leaders from regulatory, cable distribution, DTH, broadcast, TV distribution and technology segments as also content providers and investors in the broadcasting and pay TV industries.

    Flagging off the summit will be Indiantelevision.com Group founder, CEO and Editor-in-Chief Anil Wanvari, who will share the vision behind the event. Following suit will be Media Partners Asia executive director Vivek Couto with a presentation on India’s digital TV ecosystem and lessons learnt from other global markets.

    Day one’s inaugural session titled ‘Opening Keynotes and In Conversation’
    will discuss how digitisation is no longer a goal but the means to a critical end, where national economic benefit, advanced infrastructure and content democratisation converge to create a win-win for all. The panelists include TRAI principal advisor N Parameswaran, DEN Networks chairman & MD Sameer Manchanda, Tata Sky CEO Harit Nagpal and Star India president & general counsel Deepak Jacob. They will share their views on the progress so far in Phase II of digitisation. The session will be moderated by Couto and Wanvari.
        
    The second session, ‘Cable 2.0 – Profits across the pipe’ will see leaders across the cable and distribution industry share insights into the key challenges faced by industry as it moves into billing, tiering and rolling out of new services. The session will be moderated by NDTV head-affiliate sales & network distribution Rahul Sood while the panellists include Hathway Cable and Datacom MD & CEO Jagdish Kumar, Den Network CEO S N Sharma, HSBC Securities lead analyst – telecom & media Rajiv Sharma, Media Pro COO Gurjeev Singh Kapoor, Digicable MD & CEO Jagjit Singh Kohli, SITI Cable Network ED & CEO VD Wadhwa and Indiacast Group COO Gaurav Gandhi.

    Next up, ‘DTH – Driving the value equation’, will be moderated by Couto with panelists including Dish TV India’s Gaurav Goel, Videocon D2H CEO Anil Khera, Kotak Securities senior analyst Amit Kumar and Macquarie Capital Sr
    VP Ausang Shukla. The session will seek to answer the question: What are the key catalysts for the next phase of DTH’s value creation story?

    Titled ‘The business of specialised and premium channels’ and powered by BBC World News, the fourth session will study the proliferation of niche channel launches. To be moderated by BBC Global News COO – Indian Operations Preet Dhupar, the participants include Viacom18 SVP & GM – English Entertainment Ferzad Palia, Discovery Networks Asia-Pacific SVP and GM -South Asia Rahul Johri, FoodFood promoter & director Sanjeev Kapoor, Disney UTV Media Networks MD MK Anand and HBO India MD Monica Tata.

    This will be followed by a session on ‘HD as a mass driver for distribution platforms’ chaired by Castle Media director Vynsley Fernandes along with Videocon D2H deputy CEO Rohit Jain, Times Television Network CEO – English Entertainment Channels Ajay Trigunayat, Dolby Laboratories India country manager Pankaj Kedia and Chrome Data Analytics & Media founder & MD Pankaj Krishna.

    The next session, ‘Hidden gems riding the digital wave’ will look at how on the back of digitisation, distribution majors (MSOs and DTH) hold the promise to create ample value. The panelists include What’s-On CEO Atul Phadnis, Amagi Media Labs co-founder Srinivasan K A and Cisco Sr. business development manager – APAC Fabien Gauthier with Castle Media director Vynsley Fernandes as moderator.

    Day one’s closing session, ‘New media monetisation’ will discuss how Hindi GECs and youth channels are increasingly making content available across newer media platforms. Chaired by Wanvari, the discussion will see participation from Zenga TV CTO & MD Shabir Momin, IBM India ED & partner Raman Kalra and Exset global head – sales and marketing Rahul Nehra.
        
    Day two will start with a presentation on ‘Sports & Pay-TV – The Path to Value Creation’ by Couto followed by a Q&A session. The Last mile operator community will be represented by a presentation by Maharashtra Cable Operators Federation head Arvind Prabhu, who will talk about their role in a digitised ecosystem.

    The closing session ‘Driving digitisation deeper’ will be moderated by Wanvari and Couto and will analyse how action is going to shift next to India’s heartland which houses nearly 70-80 million TV homes among other key issues. The panellists include DEN Networks CEO S N Sharma, Hathway Cable and Datacom MD & CEO Jagdish Kumar, TRAI principal advisor N Parameswaran, Indian Broadcasting Foundation secretary general Shailesh Shah, Chrome Data Analytics & Media founder and MD Pankaj Krishna, Founder & MD, Magnaquest CMO Ramakrishna Mashetty and HSBC Securities lead analyst – telecom & media Rajiv Sharma.

    “As organizers of IDOS, our aim is to provide unity and strategic vision to drive forward digitalization and bring new value, profit and sustainable growth across the television ecosystem,” read a joint statement by Indiantelevision.com group founder Anil Wanvari executive director and cofounder Media Partners Asia Vivek Couto.

    “The next year is critical as the cable industry steps up on its B2C execution with billing, tiering and subscriber management,” added VivekCouto.”IDOS will explore the issue of co-operation with last mile local cable partners to create a valuable ecosystem for the consumer; one in which differentiated content, customer service and value added offerings are at the highest level. That will be worth paying more for and will drive ARPUs higher.”

    “It’s an important evolution,” said Wanvari, “as it helps scale and grow the cable industry and enables broadcasters and content providers gain the ROI they so desperately need to invest. It also eases the burden on the DTH sector and provides effective competition at the ground and consumer level And the entire evolution gives the regulators to mull over deregulating pricing.”

    *IDOS 2013 is powered by Star India, while summit partners include Discovery Channel, Dolby, CISCO, Hathway Cable and Datacom, SES, and Videocon d2h. The associate partners are BBC World News, Exset, Indiacast and Media Pro. 24 Frames is the webcast partner.

  • Digitisation to propel pay-TV revenue to $17 billion by 2017 , MPA report

    Digitisation to propel pay-TV revenue to $17 billion by 2017 , MPA report

    MUMBAI: Propelled by the government’s digitisation drive, pay TV revenues in India are projected to reach $17 billion by 2020 as opposed to the $7.8 billion in 2012, according to a new report by Singapore-based pay-TV research firm Media Partners Asia (MPA).

    According to India Pay-TV & Broadband Markets, pay TV revenues are expected to grow at a compounded annual growth rate (CAGR) of 11.4 per cent from 2012-17 and 10.2 per cent between 2012 and 2020.

    MPA forecasts indicate that total digital pay-TV homes will grow from 47 million in 2012 to 110 million by 2017 and 130 million by 2020.

    The digital penetration of total pay-TV homes in the country is expected to double to almost 70 per cent by 2020 from 35 per cent in 2012. The digital pay-TV penetration of TV homes in India will grow from 28 per cent in 2012 to 54 per cent by 2017, and reach 60 per cent by 2020.

    On the other hand, the total pay-TV homes are expected to grow from 128 million 2012 to 167 million by 2017, and 183 million by 2020. Pay-TV penetration of TV homes will grow from 80 per cent to 85 per cent between 2012 and 2020, adjusted for multiple connections in a household.

    This implies that the pay-TV industry will remain in a prolonged investment mode, with significant capital intensity. With two more phase of digitisation to go, both DTH and cable operators already have high levels of debt. The majority of additional funding will have to come through equity, via IPOs and M&A, the MPA report states.

    “A successful start for the roll-out of digital addressable systems (DAS) has revived interest in pay-TV among strategic and financial investors,” says MPA executive director Vivek Couto.

    “The real benefits will become clearer in 2H 2013 and beyond, as multi-system operators (MSOs) drive addressability and work with last mile local cable operators (LCOs) to ramp up tiering, billing and collections. Regulators are committed to curbing delays in the next phases of DAS, while the DTH industry is keen to revive growth by capitalising on digital transition.”

    Cable impact: Over the medium term, the majority of cable investments will be directed towards digital infrastructure, helping to build operator scale and improved addressability. In the long run, investments will be more focused towards acquiring primary subscriber points and the expansion of high-ARPU products such as broadband and HDTV.

    According to MPA, the total proportion of cable households with DAS climb from 15 per cent in 2012 to 50 per cent by 2020.

    DTH growth: In the DTH space, concerns focus on the growth of active subs (i.e. paying customers, net of churn and subscriber suspension), which has moderated in recent times. MPA says that the growth in active subs will rebound however, as more markets undergo analog switch-off. MPA forecasts indicate that active DTH subs will grow from 32 million in 2012 to 64 million by 2017, and 77 million by 2020.

    Broadcasters: Subscription fees for pay-TV channels crossed US$1 billion in 2012, driven by the growing strength of aggregators. This growth has yet to factor in digitalisation, which will result in a bigger share of subscription revenue for broadcasters. Operating margins will remain under pressure in the short-to-medium term, due to heavy investments in content for existing channels and gestation losses on new channel launches.

    MPA expects total pay-TV channel revenues, including advertising and subscription to grow from $3.6 billion in 2012 to $6.6 billion by 2017 and to $8.6 billion by 2020. The pay-TV ad market is expected to grow at a 10 per cent CAGR over 2012-20, while broadcaster subscription revenues are expected to grow at 15 per cent over the same period.

  • Turbulence and Asian media meltdown

    Turbulence and Asian media meltdown

    The economic crisis may reshape Asian media, says Media Partners Asia (MPA) Executive Director Vivek Couto. Companies will focus on cost savings, improved business models and, potentially, new acquisitions as asset prices fall.

    The fragility of an American economy means it is getting harder to predict when Asia‘s media economies will return to better health following this year‘s downturn. As a result, these remain volatile times. Globally, the cost of capital has become high while economic growth continues to fall. At the same time, investors remain risk averse and credit continues to tighten. This is leading to further erosion in public market valuations for Asia media and limited funding options for both private and publicly-held media concerns.

    Capitalising on the crisis through M&A could be a course for some, as the recent $1.1 billion transaction between Sina and Focus Media in China perfectly illustrates. Expect more crisis-driven deals to occur over the next 12-18 months though visibility on almost everything remains an issue.

    The latest MPA research suggests advertising in Asia will grow by 1.5 per cent in 2009 versus its earlier expectations of 2.5 per cent, while growth in 2008 finished up at 5 per cent versus an earlier forecast of 5.6 per cent. Lower visibility and higher volatility also mean that recent ad growth estimates don‘t carry an upside potential anymore.

    MPA‘s latest advertising forecasts have been downgraded due to volatility in Korea, Japan and India. A region-wide rebound of 5.8 per cent is expected in 2010. Excluding Australia and Japan, Asian ad growth will slow from 12.1 per cent in 2008 to 6.4 per cent next year, before a rebound to 9.4 per cent in 2010.

    While MPA expects China and India to grow at trend levels of 10-13 per cent over the next three years, ad growth this year could be lower than forecast in both these markets.

    In India, for instance, the economy is expected to grow by 6 per cent next year in real terms but could decelerate as low as 5 per cent, according to consensus. Meanwhile, the Indian ad market is expected to grow by 10.8 per cent next year but forward budgets for the next quarter indicate that dominant TV and print sectors face a tough time with growth, potentially coming in far lower than forecast. Elections in Q2 may boost spending but trend growth could come below MPA‘s 10-11 per cent forecast.

    All of this means that the importance of monetising content through consumer transactions will grow as opposed to an over-reliance on brand spend, especially in places like India.The market share of digital in places like China will continue along an upward trajectory.

    At the same time, new ad drivers will become even more important for traditional players: local as opposed to national ad markets in Indonesia, for instance, and regional markets in India as the recent advances by Star and Zee have shown.

    Overall, MPA analysis indicates digital and out-of-home media will have a combined market share of close to 30 per cent by 2010 in China and Korea; more than 20 per cent in Japan, Australia and Taiwan; and more than 10 per cent in India. TV and print will continue to hold more than 40 per cent share in India, while TV will retain 60-70 per cent market share in Indonesia, Philippines and Thailand. Print will remain dominant in Malaysia, with more than 55 per cent share.

    Potential buying opportunity

    Media M&A talk has arisen because of the collapse of equity markets, risks around maturing debt and weak balance sheets. Publicly-traded market capitalisation for media companies fell by an average of 30-80 per cent last year in China, Japan, Korea, Australia, India, and Indonesia.

    To be sure, equity market capitulation does not necessarily mean that media assets will actually sell at bargain-basement prices. After all, most have an intrinsic value far higher than what the fearful public and risk-averse institutional investors are currently prepared to pay.

    Potential sellers today and in the future may include: Korean cable broadcaster On*Media (045710.KS); Indonesian terrestrial TV network Surya Citra Media (SCMA.JK); Indian broadcaster IBN-18 (IBN.BO); Chinese CAS supplier CDTV (STV.N) and media wannabe Xinhua Finance Media (XFML.OQ); Japanese satellite broadcaster WOWOW (4839.T); Chinese media giant TVB (0511.HK); and Australia‘s APN (APN.AX).

    Debt issues, focus on Australia and Thailand

    Asian companies with heavy debt leverage include: Australian publisher Fairfax (FXJ.AX), PBL Media and Thailand‘s True Corp (TRUE.BK). At least one of these is likely to sell parts of its troubled franchise in the months to come. True in particular faces a big credit crunch, having notched up around $180 million in liabilities, while its overall debt ratios will likely breach the covenants in its bank loan facility.

    There was at least some good news for PBL Media at the end of last year with majority shareholder CVC Asia announcing that it would inject a further $230 million equity in PBL. Like many of its counterparts, PBL Media is struggling with one of Australia‘s worst ad downturns in a long time with the ad market expected to decline by more than 6 per cent this year.

    Australia‘s Ten Network (TEN.AX) is also suffering – it saw TV revenues decline by 12 per cent in its latest quarter while overall group EBITDA fell 25 per cent. Canadian media major CanWest has steadfastly refused to consider selling its 57 per cent stake in Ten. Current economic hardships may force a rethink. CanWest has consolidated debt of close to $3 billion versus a market cap of only $60 million, and is increasingly exposed to Canada‘s worsening economy.

    Pay-TV platforms

    Opportunities in the private market include various pay-TV platforms needing funds for further expansion and digital deployment. Indonesia‘s Indovision, one of the fastest growing operators in Southeast Asia with over 500,000 pay-TV subscribers, potentially needs more funds to grow beyond its end-2009 target of 1.2 million customers. Meanwhile, numerous operators in India need new capital, as the cost of subscriber acquisition escalates and average revenue per user (ARPU) growth remains modest. Candidates include WWIL, Tata Sky, Dish TV (DTV.BO), DEN and Hathway, though only the latter has a positive EBITDA level at present.

    Various next-generation broadcast satellite licences in Japan are also coming up for grabs in 2009 with J:COM, NBC and Time Warner‘s Turner slated to feature in potential acquiring consortiums. Future M&A in Korea is also worth highlighting, with new regulations allowing cable MSOs to increase market share coverage with more MSO acquisitions. In the near term however, Korean MSOs, weighed down by a combination of debt and IPTV competition, may look to pursue bargain acquisitions and alliances in the content space instead.

    Global media and India

    Gauging how M&A in Asia media may play out also depends on what happens in global media. The severity of the US downturn, as well as various debt issues, have hit global media companies, including most notably Viacom and NBC. Both own assets in key markets such as India, and supply quality programming and brands to various networks across Asia. NBC is scaling back the pace and extent of its investment across Asia ex-India while Viacom has scaled back operations again in Asia ex-India, this time even scaling back in profitable territories such as Japan.

    How these companies manage the crisis is important: whether they choose to sell certain assets in Asia, or sell big assets, or merge with a competitor such as Time Warner and News Corp., could have a decisive impact on future trends.

     

    India‘s IBN18, which has a highly-rated but costly GE channel JV (Colors) with Viacom, recently raised $25 million through a qualified institutional placement (AIP) to five institutional investors: T Rowe Price, Reliance Capital, Franklin Templeton, JM Financial and HSBC. IBN has also issued 15 million warrants to news media company TV18 (TVET.BO), convertible at Rs 102 per share, implying an infusion of about Rs 1.53 billion, which puts a lot of pressure on the TV18 balance sheet and limits its flexibility going forward. Future funding for IBN and Colors next year will need bigger players and more cash, which could lead to a better strategic result for the company.