MUMBAI: Digitisation is set to change the way television channels are packaged. In addition to the subscriber getting the option to pick and choose channels, multi-system operators too are finding newer opportunities.
MSOs have found a good business prospect in cricket, the most-watched sport in India.
With digitisation of cable TV services in 42 major cities, MSOs are increasingly shifting to per subscriber deals with broadcasters instead of making bulk payments.
Hathway Cable & Datacom, like direct-to-home television service provider Dish TV, has carved out a Cricket Pack for its subscribers.
In the case of Dish TV’s India cricket pack, the channel on which live telecast of a match involving Indian men’s cricket team is switched on.
“Sports channels, by the nature of its programming are event driven. We have an Indian Cricket Pack, which is a cost per subscriber deal with broadcasters,” says Hathway Cable CEO Jagdish Kumar.
More MSOs are likely to follow suit and offer Cricket Packs to their customers.
“Though right now we have entered into a per set top box deal with the sports channel broadcasters, we may also look at Indian Cricket Pack going forward,” informs SitiCable COO Anil Malhotra.
There are three types of commercial arrangements entered between broadcasters and operators. These are: Fixed deal, in which the operator pays a lump sum amount to the broadcaster; Reference Interconnect Offer, in which operator takes channels based on the choice of the subscribers; and on a per set top box deal, in which the operator shares details of the number of STBs installed with the broadcaster and the number of the subscribers subscribing to a sports channel.
DEN Networks is currently on a fixed deal with the sports broadcasters. “We are still asking for lump sum because of cash flow issues,” informs DEN Networks CEO SN Sharma.
While till last year, broadcasters were entering into fixed deals with operators, “now everybody is moving towards cost per subscriber,” adds Sharma.
When questioned if DEN would also offer Indian Cricket Pack, Sharma says, “Let’s see. Different experiments are happening. With time everything will evolve.”
According to GTPL Hathway COO Shaji Mathews, broadcasters are entering into fixed deals or negotiate a per subscriber rate.
“The per subscriber deal has clauses which say that the operator needs to show a minimum number of subscribers who subscribe to the channels,” he says.
Currently, GTPL Hathway has a fixed fee deal with the sports broadcasters.
“The moment we get into a la carte, the rates are really high and if we get into cost per subscriber, unless we guarantee a certain number of subscribers for the channel, the cost per subscriber is also high. So, in fact on fixed deal, we land up paying less because of the fee structuring,” he says.
GTPL Hathway may also move to Indian Cricket Pack. “We are looking at that as well,” he says.
It makes business sense for channel distributors to create cricket packs. But Increasing inclination towards cricket packs would mean predominantly cricket channels would gain at the cost of those with less or absolutely no cricket content.