Star India’s amended RIO (Reference Interconnect Offer What you should know about RIO) has been making news recently for the impact it is likely to have on MSOs as well as consumers. The new incentive-based RIO replaces the bilateral deals that used to be struck between the network and the MSO platforms to now offer the channels in packages to consumers. Star India hopes that these incentives to MSOs will result in a trickledown effect that will benefit the end consumers.
Speaking exclusively to exchange4media, Uday Shankar, CEO Star India clarifies that whilst there are numerous media reports doing the rounds, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) didn’t instruct Star to offer channels on RIO, but the network voluntarily filed an affidavit to offer channels on RIO. “We filed an affidavit saying we will do all deals on RIO and terms of trade will be laid out in RIO. The Court didn't ask us to do it. We did it on our own,” explains Shankar.
Why MSOs are resisting the new RIO
Shankar elaborates on the reasons why MSOs may be reluctant and says that the application of the new RIO means a further investment of executive teams for the MSO. Though currently such systems exist, the existing teams are used to working in the analog manner with that mindset. “Adapting the new RIO would mean the MSOs getting adept in packaging, and secondly honing their sales skills. For the first time they will have to go and ascertain individual consumer preferences.
They will now have to maintain a robust subscriber base month after month, it is a somewhat complicated business execution. But if they can do it they can earn more money,” says Shankar.
The debate here however is not about cost but about making a fundamental difference to the manner in which things work, he adds.
How does it affect the end consumer?
Shankar emphasises that contrary to popular perception, the new Star RIO does not make the cost for the end consumer higher, if MSOs are able to do the right packaging.
Star vouches for its new RIO, says MSOs hesitant about change
“People will be happy to pay for what they watch. The only way it will happen is if it is forced from the top. It undoubtedly will cause a lot of disruption in the current market scenario, as well as be a huge risk for us, with the danger of our channel reach going down, but as market leaders we believe in the power of our content. We are not in the business for one or two quarters; we are in it for the long term and want to do what is right for the industry as a whole. So we can do this. We are trying to push through an entire digital business model from B2B to B2C through cable,” he said.
How is the new RIO a game changer?
Shankar believes that the steps that Star has taken with the new RIO needed to have been taken a while ago, as it is very fundamental to the broadcast industry. He further said, “Since the government did not push for it and the operators were not ready, the state of affairs has come to this, wherein Star India as the market leader is creating the push to bring about the change.”
While advertisers seem to be in favour of the new RIO (Marketers give a thumbs-up to Star's new RIO) , the other broadcasters (in off-record conversations) have indicated this is a huge leap forward by market leader Star and can indeed change the dynamics of the broadcast industry for the better.