Technology

Digitisation spurs Sony, foreign media firms to invest in India

GOA: Global media companies are upping their investments in India in the wake of digitisation and the opening up of the pay-TV market.


Sony is aggressively investing in its Indian television broadcasting company, Multi Screen Media (MSM), as it seeks to launch niche channels and expand into the regional-language markets.


"Digitisation has given Sony a huge confidence to invest more in India. It first bought out the Indian shareholders in Multi Screen Media (MSM). It has also agreed to buy stake in regional broadcaster Maa TV," said MSM CEO Man Jit Singh, while speaking at the India Digital Operators Summit (IDOS) 2012 jointly organised by Indiantelevision.com Group and Media Partners Asia.


Sony had bought out the stake of Indian shareholders for $271 million taking its stake to 94 per cent. The company had also marked its foray into the Southern market by acquiring 30 per cent stake in Maa Television Network. In 2009, it had acquired Channel 8, a Bengali movie channel, and later renamed it as Sony Aath.


"Digitisation is very important for attracting foreign investment into the media sector. We are seeing that in Sony. Good luck 1 November (analogue cable shuts off from that date in the four metros)," said Singh.


The whole value chain will gain from digitisation. For broadcasters, the over-dependence on advertising revenue will reduce and the business models will change. Subscription revenue will climb from 20 per cent to a 50 per cent ratio, providing broadcasters a stable source of income.


Broadcasters will also be able to launch a whole bunch of niche channels as carriage bandwidth capacity opens up.
Multi-system operators (MSOs) will get to own the customers. Though coming at a higher price, this will guarantee future revenues. They can also tap the broadband market, Singh added.


DTH will get a level-playing field and the competition between them and the cable players will be on service quality and innovation. Multiple revenue streams will evolve in future for all the stakeholders in the broadcast sector.


"What multiplexes did to the movie business, digitisation will do to the broadcast sector with much greater force. We will see broadband and a whole variety of content. Consumers will consume more content," Singh said.


Den Networks CEO S N Sharma agreed that digitisation coupled with the hike in FDI (foreign direct investment) cap in carriage-distribution services would attract foreign investors. "The basic fundamental of the cable TV industry is being set right. Strategic and financial investors will be interested now," he said.


Videocon d2h CEO Anil Khera, however, does not believe that there will be a quick inflow of foreign capital. "It is not like the foreign investors will come with their bags full and invest here immediately. They will first study the market and look at the performance of the first phase of digitisation. Then they will decide on which companies they are going to invest," he explained.


Private equity firms will possibly step in first. "Strategic investors will do a lot of due diligence. I also don‘t think there is that whole organisational preparedness among Indian carriage-distribution companies," said Raman Kalra, media & entertainment head at IBM for India and South Asia.

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