Top 5 MSOs rake in Rs 13.5 bn as carriage income

MUMBAI: The carriage revenue market is getting consolidated among the top-rung multi-system operators (MSOs) as broadcasters are made to increase their payouts for the size that these cable TV networks have built through acquisitions over the last few years.

The top five multi-system operators (MSOs) have raked in Rs 13.5 billion as carriage fee from broadcasters for the fiscal ended 31 March 2011, according to multiple sources in the industry.

Hathway Cable & Datacom leads the pack, mopping up Rs 4.02 billion. This is a 33 per cent growth over the year-ago period as it gains from consolidation of operations.

Den Networks has mopped up Rs 3 billion in FY’11 and posted a 20 per cent growth over the earlier-year, sources say.

IndusInd Media & Communications Ltd (IMCL) has run at a similar growth pace and collected Rs 2.4 billion in the full-fiscal, with maximum carriage revenue coming from the Mumbai market.

Digicable’s carriage income for FY’11 stands at Rs 2.3 billion, a source says. The target this fiscal is to touch Rs 3 billion, the
source adds.

Wire & Wireless (India) Ltd. has a carriage income of Rs 1.8 billion, completing the top five in an otherwise fragmented cable TV market.

The payout by broadcasters to cable TV operators, pegged at Rs 17-18 billion in FY’11, is estimated to grow at 10-15 per cent in the current fiscal.  
“There are new channel launches and space on analogue cable continues to be choked. This allows room for the carriage market to grow,” the head of a broadcasting company says on condition of anonymity.

The carriage market is also growing in smaller towns as regional channels are increasing their payout budgets to cable TV operators in these geographies. Though the MSOs have slowed down on acquisitions as they conserve capital for digitisation, they have lined up a few purchases in these geographies. Den, for instance, is looking at acquisitions in Bihar and Jharkhand. WWIL is also planning smaller buyouts in Haryana, Rajasthan and Madhya Pradesh.

The discomforting pace at which the carriage market is growing could force a major consolidation in the pay-channel distribution business. "We are already seeing trends in that. Don‘t be surprised if two big entities decide to merge for distribution," a media analyst says. 

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