Distribution deals now lock in channel positioning

MUMBAI: The flurry of new channels entering the Indian broadcast arena is leading to new equations on the distribution front. Broadcasters are working out fresh arrangements with multi system operators (MSOs) to win prime carriage on cable networks that are choked with an overdose of new channels.

Paying a 'positioning' fee has become a common business practice. But a new trend is fast catching up this year. Broadcasters are including 'frequency allocations' in their contracts with the MSOs to ensure that their channels are more visible in the cable and satellite television homes.

"Channel placements and allocations are crucial in today's scenario. We have to battle for space on cable networks and have right visibility to audiences who have so many channels to choose from," said a senior official handling distribution of a major network of channels.

Sony-Discovery's One Alliance, for instance, has signed such deals with big cable operators. "In our contracts, we are ensuring what frequencies our channels should be allocated. With so many channels willing to pay for better frequencies which would give them prime position on cable networks, it is necessary to have such contracts," says a source in the company.

Other broadcasters have also done such deals this year, an industry source says. This practice was not prevalent earlier. "It is not only important to be carried but also where you are positioned," the source adds.

Star India, however, claims to have old contracts with cable operators mentioning "frequency allocations." Says Star India executive vice-president of distribution Tony D'Silva, "This is an old practice in Star. We started this a few years ago."

Cable networks, unable to increase monthly subscription rates from consumers because of a regulation prescribed by the Telecom Regulatory Authority of India (Trai), are charging a fee from several broadcasters. Such 'occupancy' rates are on the upsurge, led by the continuous arrival of new channels and a choke in bandwidth capacity. Only digital cable TV service can increase capacity to accommodate this surfeit of new channels.

"We want to make sure that cable operators carry us in the 'frequency band' we have mutually agreed upon. It is better to have that in the agreement," says the source.

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