Shemaroo cautiously optimistic on Indian Rlys' entertainment service bid


MUMBAI: Well, it may be one of the 24 media and tech companies that have evinced initial interest in providing wi-fi delivered entertainment on demand content to passengers of Indian Railways, but Shemaroo Entertainment is still evaluating the business proposal. Reason: it involves investment of billions of rupees in setting up the whole system, especially on moving trains that may pass through broadband dark areas, which is a technologically challenging work.

Shemaroo whole time director & CFO Hiren Gada told indiantelevision.com, “It is a technically complicated work. It involves latest technology access, hardware components and a big capex investment. The technology involves giving access to content via a wi-fi platform that will work within a rail coach when the train is moving.”

According to Gada, an in-house team is preparing a business plan to get a “better sense” of the potential costs and return on investments though, admittedly, the Indian Railways do offer captive eyeballs. “Once we have worked out the costs and equipments needed to put the mechanism in place, we’d make a final decision. If revenues don’t match up to our costs, then it may not be viable for us to bid,” he added.

The Indian Railways' local wi-fi network will be available to everyone on board via a distribution box and passengers will be able to log in through their phones or other smart devises to access the entertainment content, according to some media reports.

Shemaroo, along with 23 other media companies like Viacom18, Zee and Hungama, has shown initial interest in the Indian Railways’ proposal to offer entertainment content on 3,000 trains. The bid will be valid for five years and extendable by another five years.

The proposal that seeks to raise approximately Rs. 5 billion in non-fare revenues is similar to entertainment services offered on all international and some domestic flights by airlines.

According to reports where government officials have been quoted, a distribution box will be installed in the coaches, which will be updated regularly for a seamless experience for passengers. However, it is not clear yet how the Indian Railways proposes to monetize such a service from the passengers.

“Based on the actual revenues that get generated, there could be some additional amount that Railways may share (with the service provider) if the revenue reaches a certain level,” Gada explained the revenue share model proposed by the Indian Railways.

The tender documents are slated to be opened in the afternoon of 24 August 2017 after bidders have made their final submissions. Only one service provider (successful bidder) will be permitted per designated sectors. The project is being tendered on a revenue sharing model.

The project shall be executed on a build operate and transfer model. Some of the pre-qualification demands made by the India Railways include the prospective bidders/consortium members having relevant experience in

India or abroad in providing i) content either as content IP owner/linear broadcaster/aggregator/ OTT player (ii) in providing technology solution in entertainment domain for transport/Railways sector and (iii) experience in monetisation of content through either advertisements or subscriptions.

Can this project help in making more enjoyable a journey on Indian Railways, apart from the scenic beauty of the country’s hinterland that is visible on long-haul trains? Only once the service starts, the question, probably, would get answered.


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