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Broadcasters see 15% increase in income post digitisation

17-June-2013
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Broadcasters see 15% increase in income post digitisation

Post DAS I and DAS II, it was expected that subscription revenues of channels will go up, niche channels will garner more visibility and there will be a rise in focussed content.

According to MK Anand, Managing Director, Disney UTV, the implementation of digitisation has impacted them positively. “I see a YoY growth of 15 per cent. The carriage fee has gone down and I am optimistic about the future. Overall it has been a huge turnaround.”

Monica Tata, Managing Director, HBO shard, “On the whole, for a niche channel like ours, digitisation has impacted us hugely. I cannot quantify the numbers exactly but I definitely feel that they have gone up.”

Experts feel that the process of digitisation has brought an almost 15 – 20 per cent upsurge in revenues. Although the figure varies from channel to channel as carriage fees and distribution size of channels are different.

Most of the industry experts we spoke to cited that major channels are garnering almost 15 – 20 per cent returns – either through reduction in carriage fees or increase in revenues. “Post DAS 1, we have seen an increase in demand for some special interest channels such as History, TLC, etc. in Delhi and NCR especially. An interesting fact that is emerging is people are enquiring for segmented channels for Yoga, health, etc. This reflects that digitisation would not only bring revenue prospects for existing channels through subscription but also increase the scope for more channels,” said a MSO operating from Delhi. 

In an earlier conversation with e4m, Manjit Singh, CEO, MSM and President IBF had mentioned, “For IBF members, the carriage fees reduction is anywhere between 15 – 20 per cent. Part of this reduction is deliberate. The reason behind the deliberate factor is that the MSOs have put in a substantial amount of investment to install the set top boxes. Though, as broadcasters, we might want to get benefits of digitisation from day 1, the reality is that we have to first enable those (MSOs) to get a return on their investments. Therefore, we have to be a little patient in the recovery process, but slowly over time, we will realise full benefit. We have started with small benefit of 15 per cent in some cases to 20 per cent in others, but over time this figure would be substantially more. The carriage fees may potentially go down by 80 per cent from the peak. The subscription rate should double or triple. Therefore, channels will rely more on subscription and less on advertising, which again will benefit the industry as a whole.”

As Singh said, the long-term effect of digitisation is yet to be seen. The industry only has to wait and watch. But as of now as, the broadcasters and MSOs have signaled 15 – 20 per cent increase in the percentage.
 

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