Cable TV

'We are net positive in our deals with cable TV networks in the metros' : IndiaCast Group CEO Anuj Gandhi

http://www.indiantelevision.com/sites/default/files/styles/smartcrop_800x800/public/images/cable_tv_images/2015/11/13/Anuj%20Gandhi.jpg?itok=nvII9hKa

IndiaCast Group CEO Anuj Gandhi is spearheading an effort to extract bigger pay-TV revenues from broadcast-carriage platforms as TV18 founder-promoter Raghav Bahl searches for growth engines that would propel his media empire to the top league of broadcasters like Star India, Zee Entertainment and Multi-Screen Media.

Known both in the broadcasting as well as the cable TV world as CEO of Den Networks, Gandhi has already turned around TV18?s distribution business in the four digitised markets of Delhi, Mumbai, Kolkata and Chennai. ?We will be net positive in our deals with the cable TV networks in the metros,? he says, after sewing the new commercial deals with the multi-system operators (MSOs).

Gandhi is ready to reap richer harvests for TV18 as India moves towards digital cable TV. ?We will be doubling our subscription earnings within three years,? says the man Bahl has spotted to shepherd the growth of IndiaCast.

Correcting that is no mean achievement. For the full-fiscal ended 31 March 2012, TV18 Group paid carriage fee of Rs 3.5 billion against Rs 3 billion earned as subscription income from TV viewers through broadcast-carriage platforms.

Hard bargaining over legacy issues including payment of carriage fees have held up agreements between broadcasters and MSOs with just nine days left for the shift to digital delivery of television channels in the four metros of Mumbai, Delhi, Chennai and Kolkata. But Gandhi is confident that there will be no shift in the deadline of 1 November for digitisation in the four metros.

?We are entering a new era of television history in India,? he insists, with a smile and a twinkle in his eyes.

In an interview with Indiantelevision.com?s Sibabrata Das, Gandhi talks about broadcasters? different nature of commercial deals with direct-to-home (DTH) and cable TV service providers, a drop in carriage fees, the need to correct ?legacy loads? and the growth prospects for all the stakeholders in a digitised regime.

Excerpts:

Q. How can you say so firmly that there will be no shift in the deadline of 1 November for digitisation in the four metros?

We are entering a new era of television history in India. The bad news staring at all of us today is losses, distorted business models and bandwidth constraints. If that is going to halt, the turnaround story for all of us will have to evolve around the digitisation script. The good thing is that all the stakeholders realise that hidden value will unlock only if we end the analogue cable regime. The government is also backing digitisation and has taken all the tough decisions. While Mumbai and Delhi are in full gear, we will know about the ground reality in Chennai and Kolkata as we hit the digitisation date.

Q. But aren?t we just nine days away and all the commercial deals between broadcasters and MSOs are yet to be in place?

While all of us are sighting a new dawn, we have a lot of legacy issues to correct. And this takes time. But it is only a few deals that are pending, a few knots that have to be tied. I don?t think this by itself will be a strong force to push digitisation behind. We have gone too much ahead to retreat.

Even DTH had this dark cloud hovering around it in the initial days; Dish TV did not have Star channels when it launched and Tata Sky (a joint venture of Tata Sons and Star India) had to go without Zee channels in the beginning. We will have digitisation by the set date, with or without a few deals.

Q. Is IndiaCast unable to lock the deal with Den Networks because of historic high carriage fees?

I can?t comment on any specific deal. But in some cases there is a revenue mismatch between carriage payouts and the subscription earnings of a broadcaster. This may be due to legacy and involves a lot of negotiations to correct. We have done deals with all the other MSOs except Den (Anuj was earlier CEO of Den Networks). We are confident of sewing a deal with them in the next few days.

Q. What kind of deals are being stitched? Has IndiaCast done more of cost per subscriber (CPS) or fixed fee deals?

After rounds of negotiations, we have been able to work out most of our deals with MSOs on a CPS basis. But we are not stuck on any single formula. We are also signing fixed fee deals in certain cases.

?There will be no drastic fall in carriage fees. While the TAM towns are rising, the number of channels are also shooting up. But in the digitised markets, we will see a good drop in carriage fees?
 
Q. Are CPS deals in IndiaCast?s case easier to ink because subscription revenues have been comparatively lower than the peer networks while carriage payouts have been higher?

It has been easier to strike CPS deals because we have been late entrants. We are also at an advantage because we are the only major distribution company to have subscription and carriage under one roof. And as we inducted a new team (Anuj Gandhi joined in March 2012) in IndiaCast, the industry knew that we would seek a revenue-carriage correction.

Q. Are DTH service providers able to do fixed fee deals while cable is moving more towards CPS arrangements?

We are seeing an interesting trend emerge. DTH has been able to negotiate more fixed fee deals with broadcasters as they have a national satellite footprint. They can bet on their future subscriber growth numbers with some authority. And they benefit from this kind of commercial arrangement as the yield per box comes down in a fixed fee deal.

Cable networks, on the other hand, are moving towards CPS deals as they address a finite market (city-specific like Delhi or Mumbai or Lucknow) and there is less chance of them growing horizontally (unless acquisitions happen or they compete amongst themselves to grab more territories). Though MSOs want to do fixed fee deals, broadcasters are not comfortable in forecasting the swelling in future cable TV subscriber numbers.

As we move towards smaller markets involving small-sized cable networks in the second and third phase of digitisation, we would definitely see more CPS deals. These could later evolve into fixed fee deals as cable networks get a fix on what subscriber growth they would be able to register in future.

Q. TV18 and Network18 on a consolidated basis earned about Rs 3 billion of subscription income while carriage payout was Rs 3.5 billion in FY?12. Has IndiaCast been able to do net positive deals in these four metros?

I can?t comment on the financials but we have corrected that legacy and are in a growth phase. We will be net positive in our deals with cable TV networks in the metros.

Q. How much of the carriage fees the four metros account for?

For the industry, these four metros would be accounting for about 45 per cent of the total carriage payouts. We would be in line with this trend.

Q. How much of a carriage fee drop are we seeing in the four digitised markets?

There will be no drastic fall in carriage fees. There are twin reasons for this. While the TAM (TV ratings agency) towns are rising, the number of channels are also shooting up. And in the digitised markets, we will see a good drop in carriage fees.

Q. Raghav Bahl had earlier stated that TV18 would have to catch up on the subscription revenue front while the advertising income had reached a level comparable with the competing networks. What sort of pay revenue growth do you forecast?

The industry will be able to post 20-25 per cent growth in a digitised environment as revenue leakages stop and the pay-TV market gets corrected. IndiaCast would definitely do better than that. We will be doubling our existing subscription revenues within three years. And when we say this, we are not factoring in any new channel that would be added to our distribution bouquet.

?While DTH has been able to negotiate more fixed fee deals with broadcasters, cable networks are moving towards arrangements on a cost per subscriber basis as they address a finite market and there is less chance of them growing horizontally?
 
Q. Why TV18 group could capture a comparable advertising revenue after the launch of Colors while the distribution income stayed far behind competing networks?

Advertising revenues are broadly reflective of the ratings that the shows get. The distribution business, on the other hand, is much more complex and a late entrant will take time to catch up. The challenge is to keep a fine line of balance between subscription and carriage. Growth is also heavily influenced by the ?legacy numbers?. Digitisation, however, will help correct some of this ?legacy load? much faster than what would have been achievable in an analogue cable regime.
 

Q. The company earns around Rs 300 million from its international content syndication business. What sort of a growth are you forecasting from this segment?

We will double our revenues from this segment in three years. We will achieve this by expanding our reach and launching in more international markets. Colors already reaches out to 68 countries and we are looking at entering the South African market where we are in talks with the leading DTH operator there.

We have just launched MTV India in the Middle East. We are planning to take that channel to other markets including the UK (the channel is already there in the US).

We have also launched a new channel called Rishtey in the UK. The aim is to dig into the fast-growing free-to-air (FTA) market in the UK at a time when the pay-TV growth is shrinking.

Q. With ETV clocking about Rs 1.1 billion of subscription income in FY?12, how much of an advantage will the acquisition of these regional-language channels have in multiplying TV18?s consolidated pay revenues?

ETV will give us a regional footprint, add depth to our distribution strength, help us penetrate the interior markets, and provide negotiating power to ensure that our network channels get carried in the smaller places.

Q. Has the reworking of the joint venture distribution arrangement with Sun TV Network Ltd helped? Didn?t TV18 taken the decision of directly handling the distribution of its network channels in the southern states (except Tamil Nadu where Sun distributes) because of the low pay revenues that it used to get despite the JV with Sun?

Even now we share a good relationship with Sun TV. We distribute the Sun network channels in the Hindi Speaking Market (HSM) while the TV18 channels in Tamil Nadu are distributed by them.

For the other southern states, we felt that we needed to take direct control of distribution. The fresh deal with Sun has indeed worked well for us.

Q. Will IndiaCast want to add more channels or follow the OneAlliance model where size doesn?t matter?

We don?t want to add channels just to get volume growth. We want to have the right mix of channels.

Latest Reads

http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/12/06/vbs.jpg?itok=fQVBbLOg
The challenge of DD FreeDish and new tariff order for DPOs

With the emergence of a large number of OTT platforms and cord-cutting globally, the future of pay-TV looks bleak. The talk of the town is how pay-TV industry will manage to survive the crisis. Moreover, the new tariff order (NTO) in India is also set to overhaul the entire ecosystem.

Cable TV Local Cable Operators
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/11/15/den.jpg?itok=vERCFpOP
Den reports improved numbers for Q2 over Q1

The Sameer Manchanda-led Indian cable distribution network and broadband internet services (broadband) provider Den Networks Ltd

Cable TV Local Cable Operators
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/11/14/grt.jpg?itok=OAWnlsvm
GTPL cable TV business revenue up in second quarter

Indian multi-system operator and internet service provider GTPL Hathway Ltd (GTPL) reported 13.8 percent increase in total income for the quarter ended 30 September 2018

Cable TV Local Cable Operators
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/11/13/hat.jpg?itok=Gw-Cd_wz
Hathway in the red due to higher expenses, forex loss in second quarter

In the first quarter of the previous fiscal, restructuring at Indian multi system operator (MSO) Hathway Cable and Datacom Ltd (Hathway) had brought for it a positive bottomline.

Cable TV Local Cable Operators
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/11/10/dth.jpg?itok=zX4ravcq
Indian DTH equipments worth Rs 7.83 cr seized by Pakistan authorities

Pakistan authorities have seized a large quantity of smuggled Indian direct-to-home (DTH) equipment worth Rs 7.83 crore from various markets in a countrywide crackdown against illegal devices according to a report published by dawn.com.

Cable TV Local Cable Operators
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/11/09/Vivek-Couto.jpg?itok=iqwcdf9q
Indian pay TV revenue to touch $16 bn by 2023: MPA

As per a new report by Media Partners Asia (MPA), the pay TV revenue in Asia will top $56 billion in 2018. This will continue to grow at 3 per cent CAGR till 2023 and likely to exceed $66 billion by then. Pay TV revenue consists of subscription fees and local and regional advertising sales.

Cable TV Local Cable Operators
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/11/01/hinduja.jpg?itok=ZXqONP2o
Q2 results: Hinduja Ventures reports total income of Rs 26.72 crores

HVL on standalone basis reported a total income of Rs. 26.72 Crores for the half year ended September 30, 2018.

Cable TV Multi System Operators
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/10/24/Vynsley-Fernandes.jpg?itok=KbyFWkYU
IMCL aspires to hit 7 mn subscribers in a year

At a time when the face of India’s multi-billion dollar cable industry is changing rapidly with the emergence of new players, Indusland Media & Communication Ltd (IMCL), one of the oldest players in the industry, has announced a new offering ‘I Am Mumbai, I Am InDigital’.

Cable TV Local Cable Operators
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/10/11/act.jpg?itok=jNeP51zC
ACT Fibernet seeks funding; discloses financials

In its prospectus with SEBI, ACT Fibernet submitted the financial details and is looking for fund-raising to expand the business across India. ACT Fibernet reported revenue of Rs 1,217 crore and EBITDA of Rs 211.67 crore in fiscal 2017.

Cable TV Local Cable Operators

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories