The LMO-MSO relationship will get clarified within six months: Sameer Manchanda

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By indiantelevision.com Team Posted on : 31 Jan 2014 06:00 am

NEW DELHI: Digitisation has given an opportunity for cable to compete with direct-to-home (DTH). There was a time when digital meant DTH and cable was largely analogue. But now, there is competition between digital and digital. While world over, cable is supposed to provide premium products, here in India, DTH was and is considered as a premium product. Digitisation has given cable an opportunity to show its might to DTH, compete with it, and provide customers television without interruption and with broadband internet and Value Added Services (VAS).
 
We are in a highly competitive work environment. For smaller players to emerge, they will need scale, pure execution and vision of where they want to see themselves. They should be thinking big and along with that, should have the patience to wait for at least 5-10 years. There will be hiccups and ups and downs, but as long as they manage and maintain the course, they will achieve their goal. Cable has a unique proposition. It has scale, is a mass product, has mass appeal, is bigger than DTH, and every home has been watching cable since 1991. So just believe in the vision.
 
Cable is a technology; we just have to leap frog from analogue to a complete different pipe, and that will happen in the next 5-10 years. As we saw in the case of mobile, even cable will go the same way as the world has gone.
 
I know that there is a lot of pain, and in the beginning years, we have all faced it and will probably face it for a little longer too. But in the next 10 years, everyone will benefit. And every stakeholder, be it small Multi System Operators (MSOs), Last Mile Owners (LMO) or national MSOs, each one will gain. The industry can only be as vibrant and strong as each of its players. So, one player cannot remain vibrant while the other isn’t. The whole industry has to be vibrant and so, we all have to take a step forward in unifying the cable industry and making it vibrant.
 
The LMOs and MSOs have to think that they are partners. Right now, there is a turf war of economics. But it will wear off once they realise that the customer will go wherever he/she wants to. He will go to DTH or the IPTV platform or 4G or any other platform where he/she gets better service. So, the LMOs and MSOs have to understand that they have to be together.
 
If you see, the MSOs are ploughing in a lot of investment; they are dealing with broadcasters and are taking risks. They are also the ones who are making the pipe much stronger, so if you look at that, there is a role that the MSO plays and then there is a role that the LMO plays.
 
Today, the turf war is on economics. But in six to nine months, each player will understand the strengths and weaknesses of each party. And if they play to the strengths, the customer will get a better product and then he/she will pay much more than what he/she earlier paid. Because if you see that from 70 channels, they will have 300-400 channels, then there will be VAS and much more. So you will see that the LMOs will be making much more than what they are making today.
 
The revenue share needs to be sorted and these are things that need discussion. The MSO is also in a tight position. He has to deal with broadcasters and also ensure that the customer management is better than DTH. There are investments that need to be made. So I think that both parties need to understand each other.
 
The first effect of digitisation has already been felt and that has happened from the customers’ end. The customer today has moved from some 70 channels to 300 channels and all this with no interference. He/she has been given a box for a reasonable sum and in a few minutes, with no wire and antenna, he has started getting the digital experience. This has been the real effect of digitisation, which has unfortunately gone unnoticed. And this was the reason that 21 million homes, which could have chosen DTH, chose digital cable instead. So the effect of digitisation has been felt, but now because of switch offs, the LMO issue, and under investment by some players, the impact is marred. So there will be good and bad times for cable, but then in a couple of years, it will all be sorted.
 
The entire chain of media will become vibrant. The broadcaster, LMO and MSO will gain. Currently, since everybody is looking at getting the most, there are wars, but this will get resolved in six months, it can’t take longer. I want to see the industry getting stronger, more vibrant. Customers should be so happy with cable that they start moving from other players to cable. We all want cable to be strong and the whole chain to be very vibrant.
 
I am an optimist. Media has a great future in the next 5-10 years. No one part can say that he will gain while others don’t. All stakeholders will benefit. Even the customers will have the option of close to 1,000 channels. Yes, they will have to pay more for that, but at least, they will have the option to pay for what they want to watch, which was not there earlier. But unfortunately, this will need them to cough up a lot of money. There will be pain, but eventually, every stakeholder will have to think about 5-10 years later.
 
(The remarks above are a part of the acceptance speech by DEN Networks Chairman & Managing Director Sameer Manchanda during indiantelevision.com's The First Indian Digital TV Honours held in New Delhi on 28 January 2014)

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