Cable
TV digitisation has forced the entire television ecosystem to come
face to face with some gut-wrenching changes. Each one of the players
has come under the scathing gaze of either the ministry of information
and broadcasting or the telecom regulator, the Telecom Regulatory
Authority of India (TRAI). Some have even got a rap on their knuckles
as the powers that be continue to work overtime on evolving a rickety
old cable TV landscape into one capable of delivering top of the line
world class digital services.
Earlier this month, it was the
aggregators that came under the scanner of TRAI which sent out a
consultation paper which tries to reduce their importance in a
digitised cable TV India. TRAI has said that aggregators tend to misuse
the clout they have and need to have their wings clipped.
The One Alliance, a Discovery India-MSM
joint venture which distributes 28 channels to the 30,000 or so cable
operators nationally is one of the aggregators whose future and
existence many are questioning. But its president Rajesh Kaul, a
scarred veteran of many a cable TV battle, is hopeful things will get
sorted out and work out well for him and others of his ilk such as
MediaPro and IndiaCast.
Even as The One Alliance has been
celebrating the completion of 11 years of being in business, Kaul was
busy preparing his responses to be presented to the regulator before
the scheduled 27 August deadline. He still found some time to speak to
Indiantelevision.com’s Seema Singh on trends in carriage and placement
fees, the TRAI consultation paper and all things cable TV. Excerpts:
Do you see the aggregators become more relevant or less in the coming years? Why or why not?
We will be as relevant as we are right now.
We are a very important link in the chain of the entire television
ecosystem. We just hope that with digitisation we will get a fair share
of revenue which we haven’t got for so many years.
What is your take on the TRAI consultation paper, which if implemented will cut down on the aggregator’s clout?
We are evaluating the entire paper for which we need to file replies.
TRAI in all its open houses and interaction
with stakeholders has maintained that the era of regulation should go
now and that they want to deregulate. So the consultation paper came as a
surprise. On one hand they talk of deregulation, while on the other
they put us under more regulations.
May be the regulators need some
clarification on the same and we are working on it. I am unsure of the
intensity of the complaints put by the MSOs.
All through we have been following the TRAI
and Information & Broadcasting Ministry (MIB) guidelines, with not
a single case of deviation.
There are close to 700 channels today and
this has led to huge competition. The situation is such that no one
channel can behave unreasonably with an MSO or with consumers. We all
need eyeballs from our consumers. The competition ensures that the
channels’ content and rate is good. We have to ensure that everything
is as per market dynamics so that they are more liked and watched. This
is the age we should be talking of forbearance rather than regulation.
As per the TRAI regulation we are supposed
to offer our channels on a la carte rate as well and this is available
to the MSOs. In this country, there is a ‘must provide’ for all
broadcasters, according to which not a single channel can say “No” to
an MSO for providing the channel to them. But the MSO has the option
to not subscribe to our channels. Since all the channels are on a la
carte rate as well, there is no question of forcing them to subscribe
to our bouquet.
Another point that needs mentioning is that
the broadcasters have not been getting a fair share of revenue in
subscription. We thought with digitisation things will change. We have
been a very good stakeholder in this entire process and done all that
the regulator wanted us to do, be it doing quick deals to help MSOs
sell the set top boxes or curbing our ambitions to make profits. We
hope that we will bear the fruit of being responsible stakeholders in
this entire stretch one day.
TRAI had even in the past come up with such
consultation papers, but always heard us and I am hopeful they will
listen to us even in this case. We are going to them to present our
thought process. May be some wrong impression and feedback has gone to
them, our duty is to explain to the regulator.
The second
phase of DAS will conclude soon. Any problems that you faced in this
switch? What is the percentage growth in revenue in phase two as
compared to phase one?
We are still waiting
for a transparent system. With digitisation the consumer can chose
what they want, and pay for it. This transparency has not come out so
far. We are still not getting reports from the MSOs and do not know who
is watching what. These are the bottlenecks that we face.
We were looking at ambitious numbers when
digitisation kicked off. We didn’t get that in the first phase. Also as
responsible stakeholders we curbed our ambitions then because we knew
it would be difficult to expect a huge jump in the beginning. We
supported the MSOs, which is what the regulator wanted us to do.
But with the completion of phase II, we
should be inching towards that fair share, which should be around 35 to
40 per cent of the on-ground subscription revenue collected. This
should happen by April 2014. Channels cannot survive only on ad sales,
subscription money is a very important revenue stream for broadcasters,
but unfortunately it hasn’t so far happened in India.
Another problem that the broadcasters face
is the high carriage fees. In an analogue system, due to capacity
constraint, broadcasters had to pay huge carriage fees. But now with
digitisation there is no question of any capacity constraint, so why
have carriage fees?
How are you playing out the carriage
fee market? Will the carriage fees come down? How much has this come
down, pre- and post-DAS?
In the next three years there should be no
carriage fees. Though carriage fees have come down post DAS, we still
have been paying some placement fees to support the MSOs as they make
their transition. But, with the completion of digitisation, even this
should go down. I expect carriage and placement fees to disappear over
the next two to three years. While these were expected to go down
further by phase II of digitisation, it has only been to the extent of
about 25 per cent.
Earlier the subscription revenue share we
(read: broadcasters) were getting from the cable TV ecosystem was about
10-15 per cent. Now it has gone up to maybe to 20 per cent on the
overall. Some broadcasters may have got 25 per cent but others may have
got lower amounts of the digital dividend. Many of the channels don’t
get any subscription revenues because in the analogue environment they
could not afford to have that as a part of their business model. With
digitisation all this could change.
Do you plan
to add more channels in the bouquet? What was your strategy to ensure
that you had Times Network in your bouquet, when other news channels
were walking out of the bouquet?
We are not market
shopping for channels and we are not desperate. Only if tomorrow we
come across something good, we will think of adding it to our bouquet.
We added Times Television Network to our
bouquet this year. It was a mutual decision between the two of us. They
fitted in our profile and also they wanted to be a part of our
network. They are a premium channel and they deserve suitable revenues
considering their performance and we at The One Alliance are working to
get them those revenues.
We are in the process of concluding deals
for Times with other MSOs. We have finished with Hathway, GTPL, and
some other MSOs. And more are coming.
You had a dispute with Hathway going on for some time? How is that progressing?
There were many
issues like are bound to happen in the cable TV business and yes one of
these issues was the one we had with Hathway. And one of the issues -
amongst the many issues - we had with Hathway was The Times network,
which we have been distributing. But we amicably resolved all the
issues with Hathway this evening. And the One Alliance bouquet of
channels should have come back on all of Hathway networks by this
evening. (26 August).
It’s been 11 years in the business, how has the journey been so far?
The journey has been fantastic. While we
started with three or four channels now we have a bouquet of 28
channels, with extremely powerful and premium channels. We have various
genres, we have a solid name and repututation. It has a journey which
has had more ups than downs.
Unfortunately, even with the IPL being
the biggest sporting property in this country, we have not been able to
monetise it well due to under declaration. But, now we have aggressive
plans to monetise it for the next season..
|
What are the key pointers that set
The One Alliance apart from other aggregators? As compared to others
aggregators you have less channels, is that a limitation. How do you
see things going ahead?
We are the most stable joint venture (JV)
in the industry. All the other aggregators are just a couple of years
old. Our partners are very much involved and keen to ensure that the
stability continues. For us the quality of the channel is important. We
have never been in the race of having 50-60 channels in our bouquet.
We have channels from different genres in
our bouquet and most of them are amongst the top two or three ranking
in their respective genres. There are many more who want to be a part
of One Alliance, because they trust the JV. Also our dealings are very
transparent. We can add two to three channels at any given time, but
our policy doesn’t allow us to do that. We have always believed in
quality and so want to have premium channels in our bouquet.
Today we are the strongest, despite having
28 channels. Also we are the only one having a sports channel in our
bouquet unlike the others. Considering we have most genres covered in
the bouquet, I don’t see any limitation. Our revenue is far higher than
the others.
Are you
selective about the channels you take in the bouquet? What are the
criteria that a channel needs to fulfill to be a part of The One
Alliance bouquet?
The channel and the company backing the
channel should have similar kind of values and ambitions like ours. We
also look at the channels’ performance, which we understand on the
basis of the weekly television viewership ratings.
What is the reach of the bouquet and which is the largest channel in the bouquet?
We currently have
28 channels from different genres in our bouquet. Sony Entertainment
has the largest reach and, during IPL, Sony Max gets the largest reach.
IPL is the biggest sporting property that we
have. What is interesting is that though most sporting properties are a
simulcast with Doordarshan, IPL is the one property which is exclusive
on Max. This makes it the most important property in the sporting
channel world and we have it.
We are present almost across the country.
We would be there in around 90 per cent of the towns, which have cable
and satellite, but through DTH our reach is 100 per cent. Close to some
6,000 cable networks across the country carry our channels.
What is the current strength of the organisation?
One Alliance employs 125 people with
offices in Delhi, Bengaluru, Kolkata, Indore and Mumbai. Apart from
this, we also have a strong distribution network with distributors in
Rajkot, Pune, Ahmedabad, Guwahati, Patna, Ranchi and Lucknow among
others. Like this we have offices in 60 cities. The distributors have
their own employees. So, if we take a cumulative strength, we have
around 350 people working for us.
The major
revenue for The One Alliance is dependent on IPL. So till how long will
IPL be with Sony Max? How do you maintain subscription post IPL and
also with so many controversies surrounding IPL, how will you deal with
it?
Unfortunately, even with IPL being the
biggest sporting property in this country, we have not been able to
monetise it well due to under declaration. But, now we have aggressive
plans to monetise it for the next season. |
|
No comments:
Post a Comment