LMO - consumer collaboration is key to successful digitisation: IDOS

GOA: Collaboration is the only way for the Indian digital industry to go forward – particularly if it involves the last mile operator (LMO) as well as the subscriber. This was the core of the opening of the Indian Digital Operators Summit (IDOS) 2015 organised by Indiantelevision.com along with Media Partners Asia on the theme of ‘Defining the Digital Future.’


Speakers at the summit, which is being held at The Lalit, Goa from 24 - 25 September, stressed that it was time to stop fighting with each other in courts or other forums and to move forward together since digitisation was inevitable.


Speakers in the opening session of IDOS 2015 were clear that though the government was the largest gainer by way of taxes etc, it could not be depended upon and it was for the stakeholders to move forward on their own if the Phase III and IV digitisation deadlines set by the government had to be achieved. 


Describing the scenario as a marathon race, Viacom Group CEO Sudhanshu Vats said it was critical for all stakeholders to collaborate and yet compete at the same time.


The industry also needed to keep in mind the fact that the consumer is running ahead and everything depends and changes according to what he wants.


In order for the market place to evolve, it was imperative that all stakeholders moved forward in a collaborative spirit. The policy makers, unfortunately, are the last in this race as they are slowest. So frustration will set in if everyone looks to the government as the winner.


“Digitisation is being looked at myopically but it is necessary to look at it along with the consumer. Over the Top services will shortly take over in a big way. It is therefore important to realize that while each platform has a different technology, it’s important to keep pace. Players have to be pro-active and customise for all the 1.2 billion viewers,” Vats said. 


Walt Disney India MD Siddharth Roy Kapur said it was important to see how consumers were rapidly moving from just a single screen scenario to usage of multiple platforms. “That is the reason why I prefer to use the expression ‘video content delivery business’ instead of television business. There is a strong need to put consumers at the centre of the whole media business,” he added.


However as a result of multiple screens coming in, the level of attention span per screen has been declining. “Stakeholders have to keep this in view while planning their strategies. Content creation therefore has to change accordingly and companies need to find ways to get the consumer to value the content,” he added.


He also stressed on the need for companies to look at each other as partners and move ahead to derive more value and average revenue per user (ARPU).


Hinduja Group’s Grant Investrade MD Tony D’Silva said his company had carried out various studies before launching their Headend In The Sky (HITS) platform - NXT Digital. “All these studies showed that the last mile operator, who had built this industry with his sweat and blood, had to be taken along, and the consumer was a key stakeholder,” he said.


It was clear that the first beneficiary through taxation, service tax, entertainment duty or licence fee was the government. However, the government has done little to support the industry. On the other hand, the second beneficiary was the broadcaster, which received 75 to 80 per cent of the revenues. “He therefore must play a key role in this journey,” D’Silva said. 


Considering what these stakeholders – government and broadcasters – get, it was necessary that the two help other stakeholders if digitisation had to be achieved. 


Digitisation will also help bring about transparency in a scenario where the LMOs had been declaring just around 15 - 20 per cent of their subscriber numbers.


NXT Digital has been designed in a manner in which the LCO/LMO does not lose proprietorship of their business and did their own broadcasting deals as well as pricing and packaging as per market rates. The HITS platform also enabled LCOs to obtain set top boxes at their own convenience with easy funding and set up local channels in order to compete with other digital platforms like direct-to-home. NXT Digital had worked out a fee of just Rs 50 per subscriber per month and is offering 500 channels.


It also ensured encryption at three stages: in the NXT system, at the LCO level and at the STB-end. GPS had been provided to the STB to ensure any movement was detected. It is therefore clear that the LCO has to be helped if Digital Addressable Systems (DAS) has to succeed. Perhaps the biggest problem was to get the consumer to pay, and the LCO needs to be aided in this task.


In a presentation of the present scenario, MPA executive director Vivek Couto said that it was important for stakeholders to get their act together as digital penetration was only at 50 per cent so far. “It is also necessary to remember that Phase III and Phase IV comprise a large chunk than the first two phases,” he added.


According to Couto, around 70 per cent of the content contribution was coming from players like Viacom, Sony, or Fox. Adding that the low rate of internet connectivity around the country was a major issue, he said, “The Indian pay TV business will remain competitive and reach its peak in the next three years, but research and collaboration is very critical for this.”


Indiantelevision.com founder CEO and editor-in-chief Anil Wanvari said in his opening remarks that in order to meet their targets, stakeholders had to have commitments and take tough decisions. “However, the large number of legal cases and problems of agreements between various stakeholders must make them realise that DAS will not succeed in this manner,” Wanvari emphasised.


At the same time, Wanvari was also of the opinion that LCOs and LMOs had to change and forge partnerships in order to move forward. 


The government on its part must do something about taxation along with opening up for greater foreign direct investment (FDI).

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