(21 March 2008 9:30 pm)

MUMBAI: Feeling the pinch of high carriage fees, broadcasters asked TV viewership ratings agency Tam Media Reserach to stop supplying the 'Connectivity Report' which maps the channel's presence in a particular market as well as the bands in which it is available.

Tam has agreed to blot out the report, a move that broadcasters feel will help correct the carriage fee market. Says Tam India CEO LV Krishnan, "We were in dialogue with broadcasters on this issue. We received an official communication from the Indian Broadcasting Foundation and have decided to stop supplying the data with immediate effect. We will be informing our subscribers to this effect on Monday. Meanwhile, IBF will also be communicating to all its members."

The carriage fee market is estimated at Rs 5 billion and is expected to cross Rs 7.5 billion by FY'09. "The new players like 9X and NDTV Imagine are spoiling the market. But the full impact of their payouts will be felt in the next fiscal as they did not launch at the beginning of FY'08. We believe the carriage market will grow to a size of Rs 7.5 billion," says the head of a TV distribution company.

But with Tam's connectivity report not available, some broadcasters are optimistic that things will change for the better. Says IBF president and Dish TV MD Jawahar Goel: "Our members have been facing a tremendous problem due to the connectivity figures being released by Tam. Cable operators were practically auctioning the frequencies and charging us huge carriage fees. After Tam stops providing the data, the situation will improve."

Few industry observers believe that the situation can largely improve. There is no escaping the fundamental issue: too many channels are chasing prime space on choked analogue cable networks.

Indiantelevision.com had earlier reported that the multi-system operators (MSOs) are expecting their carriage fee revenues to double by FY'09. Wire & Wireless India Ltd (WWIL), for instance, hopes to earn Rs 1 billion from carriage and placement charges, up from Rs 553 million in FY2007.

"This won't affect the MSOs as they have a multi-city presence and do centralised deals," says the head of a leading MSO.

Even in the smaller markets, there will be no visible impact. Incidentally, Tam had stopped connectivity data on .1-1 million towns since January 2007.

So what will change? "It will be the smaller networks in the bigger markets that can get affected. They will not have connectivity data to support their unjust demands. The independent operators can also get hit," says a local cable operator.

Broadcasters also can control better their expenditure on distribution of channels if cable operators don't know their connectivity figures from Tam. But all this will take time as broadcasters try to figure out which areas can affect their ratings.

"The monies under carriage will come under scrutiny. Placement fees were linked to the Tam weightable system and cable operators were making monstrous demands. There will hopefully be some kind of rationalisation," says the senior executive of a broadcasting company.

A fall in carriage fees can have another side effect: lower down acquisition price of smaller cable networks. "Carriage was built into the revenue model for acquisition of smaller networks by the MSOs. This can see some change in the valuation model," says the head of a newly-launched MSO.