MediaPro split likely to benefit MSOs?
With the MediaPro split there is a possibility that more content aggregators might emerge in the market. The implications are likely to affect the MSOs and are expected to give them better bargaining power
Published - 04-June-2014
With the MediaPro split, is the distribution industry in India likely to get more fragmented? It is expected that Star, ZEE, NDTV and MCCS will set up their own distribution networks.
With TRAI recommendation against the bundling of channels from more than one group, the split was inevitable. Star’s robust investments in the sports genre and prospective expectation of returns are also considered to be one of the reasons for the two largest broadcasting networks of India to split their distribution together.
How is the Indian distribution ecosystem expected to change from here? What about the other broadcasters in the bundled package?
Vikram Chandra, CEO, NDTV said, “We will be setting out internal distribution team. Let us see how this pans out.” When asked about the effect on consolidated revenue from subscription, Chandra responded that it would be too early to comment. “We will have to see that we get the optimised net figure, which will balance the carriage fee and subscription revenue in right proportions,” he added.
A prime concern among the analysts and stakeholders involved in the distribution business is that the key revenue figures should not get distorted for the distributors. According to Salil Kapoor, COO, Dish TV, “The networks will have to look deeper into their system of distribution. Are they getting the proportional revenue as they used to before? This would need an assessment. Secondly, technology will play a key role in the entire gamut. Technology is a key driver of revenues. How monetisation is achieved will be a key issue.”
In certain key markets, digitisation is yet to be completed. Senior industry people have been vocal about the fact that digitisation in Phases 3 and 4 has gone slow and that needs to be addressed.
Chandra said, “We would like the Government to be systematic in digitisation. Digitisation is happening in bits and pieces, which is not good for the health of the industry.”
There are also concerns about whether there will be more content aggregators coming up in the future. Kapoor of Dish TV remarked, “There is no problem if there are more content aggregators as long as the monetary aspects are taken care of.”
Distribution is still a key issue for the broadcast industry. Proper synchronisation of the distribution value chain will not only help the broadcasters get their due share of revenue but will also make the industry more organised and consolidated in term of monetisation. At the grassroots, consumer application forms are still an issue that needs to be addressed. In many markets, CAFs have not been duly filled and this is impacting the industry.
Harit Nagpal, CEO, Tata Sky feels that there will not be major changes in the ecosystem as far as Tata Sky is concerned. “Tata Sky believes in placing due share of the revenue to its content providers which they rightly deserve,” he added.
MSOs sensing change?
The Multi System Operators (MSOs) are expecting a change in the ecosystem now. Jagdish Kumar, CEO, Hathway Cable said, “The clout which Star and ZEE collectively commanded earlier is no more. This would definitely give MSOs a better bargain. The split is likely to have implications. In some cases, the other channels which were piggy-backing on these big networks will also be in a position to negotiate in a fair manner.”
MSOs feel that the split is beneficial for the cable operators, but not likely to affect the DTH players as carriage fee is not a factor with the latter.
Various MSOs and LCOs had earlier expressed their discomfort over the bundling of channels of different networks. Analysts have pointed out that this gave content aggregators an upper hand while negotiating deals with the networks.
The setting up of new distribution teams for different broadcasters is likely to open a Pandora’s Box of debates, with MSOs now demanding a better proportion of the money and broadcasters a robust ratio of consolidated revenue and carriage fee. It would be interesting to see how things pan out.For more updates, be socially connected with us on
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