We are not at a point where cartelisation has taken hold: Man Jit Singh
The CEO of MSM maintains that cartelisation will be a win-lose attempt instead of a win-win. If cartels are formed anywhere, it will be the time for the Competition Commission of India to step in, he adds
Sony TV has continued to witness decline in viewership in Week 48 of 2013. As per the ratings data sourced from TAM subscribers for Week 48 (Nov 24 – Nov 30) Sony garnered gross TVTs of 239 million as against 269 million TVTs in Week 47. The channel had witnessed a decline in viewership in the previous week as well.
Part of the reason for this decline has been attributed to the ongoing dispute between One Alliance and the two major MSOs – DEN and Hathway – which has affected the channel’s positioning and placement (Dispute with MSOs causes Sony's ratings to plummet ).
While addressing the gathering at the launch event for the association of Sony-Six and TNA, Man Jit Singh, CEO, MSM speaks about the broadcast business, recent disputes of his organisation with the MSOs and other issues…
In light of MSM’s recent disputes with DEN and Hathway, as President of IBF do you think such issues (between broadcasters and distributors) are likely to intensify post digitisation as there are vested interests at stake on many sides?
Firstly, digitisation is good for the overall health of the industry. It is there to bring better economics in every part of the value chain in the industry. I think in the short run because of the investments people have made, there are more areas where there have been issues. I think, we as an industry – and I say this as IBF President – that all the stakeholders, viz, broadcasters, DTH players, MSOs, and LCOs, need to work together through this rather than having disputes. I am hoping that a part of my job as IBF President will be to reduce the number of disputes and not increase it.
But the number of petitions involving content aggregators and MSOs has almost tripled in the TDSAT in the last three months. Do you think disputes will aggravate till a permanent solution is in place?
As I said earlier, with digitisation there is a bigger pot to share. There are more benefits than problems. I think it is the role of the IBF to work out a solution among stakeholders. There is no point having disputes at such stage. We are not at war with each other. Whether TDSAT is the mechanism or we resolve disputes bilaterally, at the end they need to be resolved within the industry. I think that is not necessarily a problem. There is a whole value chain, as on the other side there are advertisers and agencies as well. I am optimistic that disputes will not intensify.
You had earlier told us that the carriage fees have gone down by almost 20 per cent for most of the channels post digitisation? What is your take now on the status of carriage fees and digitisation?
As broadcasters, we understood that MSOs are investing in the set top boxes, so the carriage fees couldn’t have gone down to zero overnight as RoI had to be recovered for MSOs. As an industry, we agreed that we may phase-in the reduction of carriage fees over a period of time. That could be three to five years, but carriage fees over time will go down substantially. Right now we are working together with our friends in the MSO side to make sure their economics do not get skewed, and then we will recover our investments.
But when we spoke with various MSOs, including DEN and Hathway, they said that Sony demands unrealistic subscription fees, and when a placement fee is demanded from the channel, they refuse, which is a bone of contention. It is because of this your signals were also altered in the recent days? How do you counter that?
These are commercial negotiations. I could comment in a similar way, but that would not help. My desire with both DEN and Hathway is to work on the issues together. It doesn’t help to have disputes in the press. It is much easier to sit across and resolve the issue. These people have been our partners for years. These are not the things disputes need to happen on.
Do you assume the possibility of cartel formation on the MSO side, as some broadcasters have indicated?
If cartels are formed anywhere, it would be the time for the Competition Commission of India to step in. As IBF President, I don’t think cartel formation can be sustained in the industry. In the context of cartelisation happening or not, I think everyone is talking to everyone. I don’t think we are at a point where cartelisation has taken hold and is something that is desirable for anyone. In that case, it would be an attempt of a win-lose instead of a win-win. I don’t see our industry headed in that direction.
Where do you see the 10+2 ad cap issue moving towards now after the case has been heard in the TDSAT?
We are waiting for the TDSAT verdict. We always believe that 12 minutes of advertising is in the best interest of the consumer. Our issue was to “phase it” over time. We have worked out an arrangement with TRAI and we said that it has to be worked out together for everyone. Different broadcasters are impacted in different ways; channels in the news, movie, music genre and regional channels are hugely impacted as they have too many advertisers, owing to the nature of their genre. If the regulation has to be implemented, it should be altogether for all the broadcasters. We had laid out a time frame, then certain members of the fraternity realised that their economics couldn’t sustain and so there was a break and that was a dispute, which finally went to the TDSAT. We and Sony have never been against the regulation. We just want to do it together with all the broadcasters.
In the era of sports broadcasting today, where do you consider Sony Six as a brand?
We see it as a premium brand, which is a combination of sports and entertainment. Here, we focus not only on cricket but other sports as well, which youngsters are fascinated about. When we talk to youth, they say that they want soccer, fight sports, tennis and golf. We have relied on this and looked at building that brand.
Cricket is for my generation and we have the best format of IPL with us. Alternate sport is for the youth. We, therefore, differentiate ourselves from being a ‘father’s brand’.
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