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TV broadcasters choose to ride alone on the channel distribution route

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TV broadcasters choose to ride alone on the channel distribution route

The TV broadcast distribution has seen a lot of changes in the past year to a point where the environment has changed from partnership or joint venture (JV) driven distribution to individually driven by TV broadcast networks. At the first level most of the JV partnerships between different TV broadcast networks had to break up due to the Telecom Regulatory Authority of India (TRAI) disallowing content aggregators to bundle and sell channels as packages. This was in a move to break the monopolistic hold of aggregators after TRAI received complaints from multi-system operators (MSOs) of forcing them to sign deals which are unviable for them.    
Post the break up of JVs of distribution aggregators many networks chose to get the distributor in an agent role. However, this too has broken down as many TV networks are choosing to carry out the distribution themselves. The latest example is the expected break up between IndiaCast and Disney India. The distribution deal between the two which was to last till March 2016 is expected to end prematurely said media reports. Disney India is now expected to handle the distribution themselves.

Discovery Communications after its split from JV with Multi Screen Media in One Alliance by the end of last year now handles its own distribution. MediaPro, the 50:50 JV between Zee Turner and Star Den was the first to split after the TRAI regulations. Zee and Turner further ended their 74:26 JV. This has made every broadcaster look after their own distribution. Star India handles its own distribution and had adopted reference interconnect offer (RIO) method of distribution. While IndiaCast distributes the channels of TV18 and Viacom18, which are JV partners in the distribution company. MSM too now handles its own network channels under One Alliance. Even Times Network had split in June last year from One Alliance and is handling the distribution itself.  

However, among the few alliances in the agent-distributor model is that between Turner and Taj Television which is a subsidiary of ZEEL and One Alliance distributing TV Today Network. IndiaCast also handles the distribution of smaller network channels such as Epic Channel.

A source from a channel aggregator industry said that the reason for these splits at the second level (distributor-agent role) is because the smaller networks feel that they are not getting the value they used to get when they were in the JV. He also said that though it is a challenging task many for the smaller networks felt that they can do a better job in distribution of their own channels at lesser costs. In getting a channel aggregator as an agent for distribution, the network which hires them has to pay for their services, while in JV then would also gain a part of the revenue sharing.

The second structure of alliances in distribution is also under threat according to media report. While the idea of forming alliances was to get better leveraging powers for broadcasters against MSOs, the breaking down of alliances between broadcasters signals a bigger move is expected in the TV distribution industry.      


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