Cable TV

Star's incentives to MSOs

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MUMBAI: The industry could now move to a whole new module of distribution, if Star India is able to successfully attract MSOs to its new formula of distribution.



 

The national broadcaster has from today decided to give incentives to the multi system operators (MSOs) for carrying its channels. The move will empower the viewer and platforms, usher in a new era of transparency, and boost the entire digitisation eco-system.



 

Star India, which over the next three to four days will talk to all the platform operators for getting the deals in place, hopes it see the light of the day soon.

According to Star India CEO Uday Shankar, the platforms and subscribers have one goal: to save money, while the broadcaster’s aim is to ensure that its content is available to as many people as possible. “We want to create an alignment between both the goals and so have created an attractive incentive plan,” says Shankar.

The broadcaster has decided to incentivise platform operators, if they meet the three criteria: Firstly, provide more Star channels on its platform, secondly. give it to as many subscribers as it can and thirdly. give easy access by placing the channels in the top LCN on its platform. “The greater the reach of the channel, the cheaper the content would become for the operator,” informs Shankar.

So why come up with this incentive? Answers Shankar, “Earlier, RIO was the default price on which negotiations took place between the broadcaster and platform operator. Negotiations are a process of give and take. However, because of some of the issues that cropped up in the TDSAT, the Tribunal said that broadcasters must make non-discriminatory deals. But how do you do deals which is equal in a scenario when two parties are completely different, in terms of size, importance of market etc. Hence, we decided that we will offer our content only on RIO.”

RIO for the first time has been made the trading currency for deals between the broadcaster (Star) and the platform. “And now, in order to make sure that costs for the platform and the subscribers remain in control and manageable, we have decided to give incentives to platforms that help us achieve our goal of maximum reach,” he says.

 “We have done two things. One, made RIO the trading currency and because it is the common currency, it is non-discriminatory and secondly, have created a very transparent alignment between Star’s objectives and the platforms’ goals,” he adds.

The revised RIO will be in force for one year with digital platforms in DAS areas. And as per the DAS Act, the broadcaster has the right to audit the subscriber details provided by the platform. This will help Star ensure that the MSOs are complying by the figures they present while doing the deal. 

The one big question now is will the MSOs accept the new system? “The concept has been proven by the DTH operators over the years. They do not sell everything to every customer and instead make sharp packages. The consumer picks the package which is what is offered to them. At a broadcaster level, this is what we are aiming at doing. I think this will work for MSOs as well, if they were to make the packages and sell them.”

Shankar expects the module to take off soon. “The only way to have Star content on one’s platform is through RIO and so I am sure the MSOs will take this up.”

The MSO, if accepts all the three conditions: Of taking as many channels, of providing it to all its subscribers and give it on a certain LCN, the incentives could add up to giving the platform a discount of up to 60 per cent.

“We need to understand that not all the channels will be taken by everyone. So if we take that, then some channels will have 100 per cent penetration, while some may have 80 per cent or 60 per cent penetration and on top of that if you layer it with LCN incentives, then the total benefit to the platform will be very lucrative,” informs Shankar.

The MSOs, with these incentives, can put the Star channels back in their existing packages.

So do we see this becoming an industry norm? Says Shankar, “This is a pricing issue and one cannot work as a group on this. We are doing it because of a set of issues that came to us. There were too many litigations and as Star we are clear that we want to be totally transparent of how we do business.”

Platforms that still opt out of the revised RIO will have the option to choose and take channels as per the original list price.

Click here to read the full RIO

Click here to read about the rate card

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