Cable TV

'Carriage market has exploded and will close this fiscal at Rs 14 billion' - Gurjeev Singh Kapoor

http://www.indiantelevision.com/sites/default/files/styles/smartcrop_800x800/public/images/tv-images/2015/12/03/Gurjeev%20Singh%20Kapoor.jpg?itok=3R0q7-iK

Broadcasters are being hit hard by hefty carriage fees as bandwidth is getting choked both on analogue cable and DTH (direct-to-home). Building formidable distribution bouquets is high on their agenda as they struggle to ramp up subscription revenues which are estimated to touch Rs 28 billion this fiscal.

Star Den, a 50:50 joint venture between Star and Digital Entertainment Networks, is quickly adding regional channels to complete its otherwise strong Hindi and English entertainment-news-kids bouquet. Zee-Turner is the only other broadcasting distribution company which has a formidable regional content lineup.

Star Den is eyeing a revenue of Rs 10 billion at a time when the television industry is beginning to feel the first serious signs of a slowdown in advertising revenues. Analysts say this will be a hard task to achieve, despite the boon from DTH revenues. Big TV and Airtel Digital TV launched later in the year, reducing prospects of a full-fiscal revenue gain for the broadcasters.

In an interview with Indiantelevision.com's Sibabrata Das, Star Den Media Services chief executive officer Gurjeev Singh Kapoor talks about the dark holes in the distribution business and how the company plans to ramp up growth in a tough business environment.Excerpts:

Is the steep climb in carriage fees upsetting the business model of broadcasters?

The carriage market has exploded and is expected to end this fiscal at close to Rs 14 billion, up from Rs 6 billion a year ago. As there is a huge amount of bandwidth constraint on analogue cable and even DTH, the industry has changed in terms of carriage. DTH operators are offering 200 channels while the Information and Broadcasting ministry has given the nod to 370 channels. A plethora of channel launches in the Hindi general entertainment, news and regional space has meant that there is a fierce fight for frequency. In a market where funding was easily available, channels were willing to pay more for space on cable networks. Insanity ruled the market.

Will we see a correction in the carriage market?

The balancing act has to happen now. With private equity and other sources of funding drying up, many broadcasters have started contracting their distribution budgets. We could see a flat carriage growth next year as channels start rationalising their costs. Broadcasters are in no position to be omnipresent in all cable networks; they will have to pick and choose where they want to be present and optimise their resources.

But we will continue to see more channel launches next year as Reliance ADAG is planning to get into broadcasting space. Even existing players like Star India have plans to add more channels. Won't this ensure that the carriage tap continues to flow freely?

We may see a 10-15 per cent growth in carriage fee market in FY'11 as more channels enter the race. The next two years will be the blue litmus test for many broadcasters. For the weak channels, there could be a shake out. The fact is that distribution costs have grown unmanageably high.

There can be no potential threat to carriage revenues unless the digital universe expands to at least 25 per cent. When we reach that stage, other models can emerge like broadcasters getting into agreements for sharing their distribution revenues with delivery platform providers.

Are broadcasters getting united to resist on carriage fees?

Broadcasters have doled out so much money in the past because of competition that it will be difficult to correct the system fully. More so, as we will see new channel launches. Carriage fee is being governed by market forces. But it is good that the thought process has started to fight carriage fees collectively. How far that will succeed only time will tell.

Would you want Trai to (Telecom Regulatory Authority of India) come out with some regulation on carriage?

I wish there could be some kind of formula that can be arrived at to regulate carriage. As an idea, it is definitely good since the regulator has mandated pricing issues.

How difficult is it to ramp up subscription revenues in the backdrop of MSOs (multi-system operators) consolidating the cable TV market and Trai introducing pricing regulations?

Subscription revenue for pay-TV broadcasters will close at Rs 28 billion in FY'09, up from Rs 23 billion a year ago. Even though there is a slowdown in the market and the times are tough, the industry expects a 10-15 per cent growth in FY'10.

Isn't that growth mainly because of DTH?

DTH, undoubtedly, has expanded the market. But ARPUs (average revenue per user) haven't grown in the DTH business; they are virtually the same as that of cable. IPTV, though much talked about, has also not happend this year.

Will Star Den's revenue touch Rs 10 billion this fiscal?

While we are looking at very aggressive numbers and have set ourselves a very challenging task, I can't comment on our financials.

Do broadcasting distribution companies see the consolidation in the cable TV sector as a welcome change?

The marketplace will make it difficult for small networks even as broadcasters rationalise their distribution budgets. Networks who have a geographical spread can bargain hard with broadcasters. In the short term, they will get paid more and will be reluctant to pay for more subscribers. But in the long term, it is better that the industry moves towards a better structured environment. MSOs and broadcasters have to join hands and realise that ultimately money has to come from the ground.

Since the parent owner of Star Den also runs a cable TV company, how do you leverage the power of your bouquet to push the cable distribution business?

We operate as independent entities. We treate Den like the other MSOs.

Star India had earlier inked a distribution deal with sports broadcaster Neo which did not last long after the new management took over. Do you feel that the Star Den bouquet is strong but still incomplete without sports channels in its mix?

We are currently distributing 23 channels and are in a very strong position to post growth. We have great quality content in the Hindi general entertainment space with Star Plus as the leader and Star One in the fifth spot. In the news television space, we have Times Now which leads in the English segment, CNN-IBN, IBN7 and Star News. CNBC TV18 and Awaaz, of course, are leaders in their segments and are powerful subscription-driven channels.

In the kids genre, we have Hungama and the three Disney channels. For the English-viewing audiences, we have a formidable presence in Star Movies, MGM and Star World. We also distribute NGC and Zoom.

We are now filling up the missing pieces and adding the regional bouquet. With Star buying majority stake in Asianet, we will cover all the languages down south. Star has also launched a Bengali and a Marathi general entertainment channel while the one in Gujarati is in the pipeline.

Will Colors (the second most-watched Hindi GEC from the Viacom18 stable) automatically come to your bouquet when it decides to go pay?

I wouldn't like to offer any comments.

Will you also be getting the MTV channels after Viacom's contract with One Alliance expires on 31 March, 2009?

I don't want to comment on this.

What about the wedding and home shopping channels that Star is planning to launch next year?

Whatever niche channels Star launches, we will be happy to service. Niche channels will have a demand particularly on digital platforms. One the Fox channels launch, we will also be happy to distribute them.

Latest Reads

http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/09/11/siti.jpg?itok=jXHpwkyJ
SITI Networks Limited announces “SITI PlayTop”, its first Hybrid Set Top Box

SITI Networks Limited, has announced that it will be introducing a range of Set Top Boxes for delighting its customers. To begin with, the company has announced, “SITI PlayTop”, its first Hybrid Set Top Box.

Cable TV Multi System Operators
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/09/04/siti.jpg?itok=JOG8pkn3
Siti relooks at broadband as cable subscription drove revenues in FY18

In FY 2017 (fiscal or year ended 31 March 2017, previous year), the Essel Group’s Siti Networks Ltd (Siti) was all gung-ho about broadband. In its annual report for fiscal 2017, the company said that it had become the largest multi-system operator (MSO) and a leading wired broadband services...

Cable TV Multi System Operators
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/09/01/Digital.jpg?itok=v-WMvuRl
Pay TV execs feel need to innovate to remain relevant, finds study

With the advent of digital content platforms, pay TV industry across the world is facing stiff competition. The pay TV Innovation Forum report produced by Nagra in association with research firm MTM, found that 90 per cent of executives believe that pay TV providers will have to innovate strongly...

Cable TV Multi System Operators
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/08/29/hathway.jpg?itok=iFsVkbju
Hathway Cable gets approval to raise funds worth Rs 99.63 crore

MUMBAI: Leading cable and broadband player Hathway received an approval to raise funds worth Rs 99.63 crore at a board meeting held on 29 August. Following the approval the company’s shares rallied as much as 15 per cent.

Cable TV Multi System Operators
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/08/28/zee_1.jpg?itok=pRptDAIa
ZEEL announces new TV channel prices ahead of deadline

Ahead of 31 August 2018 deadline for publishing TV channel prices in a new format and a day before the Supreme Court hears a case relating to TRAI’s new tariff regime, Zee Entertainment Enterprises Ltd  (ZEEL) has made public its channel prices as suggested by the regulator in 2016, setting an...

Cable TV Local Cable Operators
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/08/28/gtpl.jpg?itok=WHQxgPNL
GTPL Hathway to promote 40 Mbps broadband speed to masses

As wireline broadband business is emerging as a sector full of growth opportunities, several cable operators, as well as MSOs, are increasing their investment in the segment. GTPL Hathway, the Gujarat based cable and broadband player, is ready to lower its ARPU in the broadband segment to get more...

Cable TV Local Cable Operators
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/08/22/den.jpg?itok=wB4HD_aY
DEN Networks aims for 70,000 broadband subscribers by Q1 2020

Way before Jio’s announcement of its broadband GigaFiber venture, MSO DEN Networks revealed its plan (http://www.indiantelevision.com/cable-tv/multi-system-operators/den-netw...) to explore the opportunities in the market.

Cable TV Local Cable Operators
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/08/22/cabletv.jpg?itok=dAEHam-F
Kerala's cable TV operators struggle post floods

Cable TV is reeling courtesy the great Kerala deluge and flooding thereafter earlier this month. According to a letter being circulated by the Kochi-based Cable TV Operators Association (COA) of Kerala to the cable TV trade nationally, the situation is pretty dire in the areas affected by the...

Cable TV Local Cable Operators
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/08/11/gtpl.jpg?itok=Ab3NPOIV
GTPL Hathway revenue up for Q1

Indian multi-system operator and internet service provider GTPL Hathway Limited (GTPL) reported 15.7 per cent increase in total income for the quarter ended 30 June 2018 (Q1 2019, quarter or period under review) as compared to the corresponding year-ago quarter  (y-o-y) Q1 2018.

Cable TV Local Cable Operators

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories