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IDOS 2014: Industry solutions to distribution dynamics gain momentum

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GOA: The India Digital Operators Summit (IDOS) 2014, the largest TV distribution summit in India ended with significant progress and a level of stakeholder unity on the way forward for digitisation in India, embracing voluntary and mandatory DAS, ground level pricing, interconnect and revenue sharing between LCOs, LMOs and MSOs and broadcaster support for standard, uniform pricing based on addressable deployment. Key stakeholders also agreed that it’s critical to further improve hygiene in Phase I and II of DAS while various ecosystem entities, including DTH pay-TV operators, domestic STB manufacturers, alternative TV distribution  platforms (HITS, Free Dish) along with the cable fraternity agreed that ahead of the delayed DAS mandate, voluntary DAS has legs in Phase III and Phase IV.

IDOS 2014 had a full attendance of the who’s who of the industry with more than 300 professionals from the digital TV landscape making their way to the beautiful picturesque resort of Hotel Leela in south Goa.

The summit which kickstarted with the biggest opening night party organised by HBO on 25 September, saw some eye opener facts presented by Media Partners Asia executive director Vivek Couto on the current status of Indian cable TV industry. He said, “Out of the 262 million households in the country only 162 million houses have a TV. Of this, 27 million is taken up by the free to air service providers such as Freedish via satellite and 7 million by terrestrial DD, while the rest comes under cable and satellite.”

He also informed the gathering that over Rs 32000 crore has been invested in digitisation since 2005 with a bulk of the investment coming from the DTH operators followed by the MSOs and LCOs since 2011. Out of this, over Rs 11000 crore in the last 24 to 30 months has been invested by MSOs and LCOs.

He pointed out that while the cost of all the pay channels on a wholesale basis is Rs 922 to digital platforms, the highest pack price is Rs 550 which is an anomaly and needs correction. "Wholesale channel rates should be reflective of retail  prices," he highlighted. "The sector needs to move towards retail pricing to foster trust between broadcasters, cable TV operators, and LCOs. Retail pricing will make rates transparent. Competition amongst six DTH, two HITS, five national MSOs and several regional ones and the local cable ops will keep retail rates in check."

Another important point that came out during the session was that carriage fees which were declining before the digitisation mandate have now reversed their path following completion of phase of phase I and phase II .  “The carriage fee has gone up by 14 per cent on Q1 of FY15 over the previous corresponding quarter,” he informed.

Indian Television Dot Com founder CEO Anil Wanvari suggested the way forward for the cable TV fraternity. He said, “The first thing is to look at digitisation and pay TV with a changed mindset that it will be beneficial to all. The government could look at setting up a digitisation transition fund that will help educate, train, provide seed capital to go digital - this is specially relevant in phase III and phase IV areas. The fund could be discontinued once the transition is completed successfully, say in the next four to five years. A mechanism needs to be put in place to reward people who follow the rules and ensure strict penalties for those who don’t.”

Apart from this, Wanvari also suggested that Subscriber Management System (SMS) should be set up with correct KYC  details and bills be issued to consumers. The government or regulator could also look at laying down standards and tech specifications for set top boxes (STBs) which were in keeping in making the customer technology-future-proofed for at least three to four years and to ensure quality control. That's if the mandate of made in India set top boxes is to become a reality. "The first wave of digitisation has seen low end zapper boxes being shipped in from China - of maybe not the best quality - and being dumped on to the Indian customer to meet the so-called deadlines in phase I and phase II," he said. "Which is not fair on the lay customer who may have to go in for a new one in the not to distant future."

"On the pricing front, industry could be allowed to price their content based on market demand," Wanvari added. "The prepaid model as followed by DTH with recharges being made available from your kiranawala (neighbourhood store) or paanwala will allow for more transparent collection from the ground for MSOs and the cable sector. The base pack price could rise; and content costs on cable could be brought on a parity with DTH.  On the other hand, different packages could be made available to the consumer."

One key take away from the three day summit was the fact that right from the broadcaster, to the MSOs, DTH operators and also a few local cable operators, no one is happy with the delayed digitisation. The captains of the industry expressed similar opinion  to what the Telecom Regulatory Authority of India chairman Rahul Khullar has been airing on several occasions, that ‘delayed digitisation sends out a wrong message to the world and helps no one.’

Many also felt that the Average Revenue Per User (ARPU) needs to go up from the current Rs 150 to Rs 250-Rs 300. “ARPUs can see an upward trend only if there is trust amongst the various stakeholders,” said IndiaCast CEO Anuj Gandhi.

Star India president and general counsel Deepak Jacob during a session suggested putting together a commercial model which is uniform. While Siti Cable CEO VD Wadhwa opined to opt for voluntary digitisation, if the broadcasters and LCOs support the MSOs.

“IDOS is a great platform for the industry to express their point of view, which for this year was delayed digitisation. I am very pleased with the discussions and the quality turnout at IDOS,” said Wadhwa.

“As a first timer, I got to learn a lot through all the sessions that were conducted. Given a chance, I will keep coming back,” said Scripps Networks Asia Pacific managing director Derek Chang.

“The session on STB was very informative and there is no other platform where all the stakeholders can meet and discuss the issues related to the cable TV industry,” said Times Television Network MD and CEO MK Anand.

The highlight of IDOS 2014 was the closed door interaction with TRAI chairman Dr Khullar via videoconference with the various industry stakeholders.

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