"We are hoping for a fair share of revenue in a digitised ecosystem"

Cable TV digitisation has forced the entire television ecosystem to come face to face with some gut-wrenching changes. Each one of the players has come under the scathing gaze of either the ministry of information and broadcasting or the telecom regulator, the Telecom Regulatory Authority of India (TRAI). Some have even got a rap on their knuckles as the powers that be continue to work overtime on evolving a rickety old cable TV landscape into one capable of delivering top of the line world class digital services.

Earlier this month, it was the aggregators that came under the scanner of TRAI which sent out a consultation paper which tries to reduce their importance in a digitised cable TV India. TRAI has said that aggregators tend to misuse the clout they have and need to have their wings clipped.

The One Alliance, a  Discovery India-MSM joint venture which distributes 28 channels to the 30,000 or so cable operators nationally is one of the aggregators whose future and existence many are questioning.  But its president Rajesh Kaul, a scarred veteran of many a cable TV battle,  is hopeful things will get sorted out and work out well for him and others of his ilk such as MediaPro and IndiaCast.

Even as The One Alliance has been celebrating the completion of 11 years of being in business, Kaul was busy preparing his responses to be presented to the regulator before the scheduled 27 August deadline. He still found some time to speak to’s Seema Singh on trends in carriage and placement fees, the TRAI consultation paper and all things cable TV. Excerpts:

Do you see the aggregators become more relevant or less in the coming years? Why or why not?

We will be as relevant as we are right now. We are a very important link in the chain of the entire television ecosystem. We just hope that with digitisation we will get a fair share of revenue which we haven’t got for so many years.

What is your take on the TRAI consultation paper, which if implemented will cut down on the aggregator’s clout?

We are evaluating the entire paper for which we need to file replies.

TRAI in all its open houses and interaction with stakeholders has maintained that the era of regulation should go now and that they want to deregulate. So the consultation paper came as a surprise. On one hand they talk of deregulation, while on the other they put us under more regulations.

May be the regulators need some clarification on the same and we are working on it. I am unsure of the intensity of the complaints put by the MSOs. 

All through we have been following the TRAI and Information & Broadcasting Ministry (MIB) guidelines, with not a single case of deviation.

There are close to 700 channels today and this has led to huge competition. The situation is such that no one channel can behave unreasonably with an MSO or with consumers. We all need eyeballs from our consumers. The competition ensures that the channels’ content and rate is good. We have to ensure that everything is as per market dynamics so that they are more liked and watched. This is the age we should be talking of forbearance rather than regulation.

As per the TRAI regulation we are supposed to offer our channels on a la carte rate as well and this is available to the MSOs. In this country, there is a ‘must provide’ for all broadcasters, according to which not a single channel can say “No”  to an MSO for providing the channel to them.  But the MSO has the option to not subscribe to our channels. Since all the channels are on a la carte rate as well, there is no question of forcing them to subscribe to our bouquet.

Another point that needs mentioning is that the broadcasters have not been getting a fair share of revenue in subscription. We thought with digitisation things will change. We have been a very good stakeholder in this entire process and done all that the regulator wanted us to do, be it doing quick deals to help MSOs sell the set top boxes or curbing our ambitions to make profits.  We hope that we will bear the fruit of being responsible stakeholders in this entire stretch one day.

TRAI had even in the past come up with such consultation papers, but always heard us and I am hopeful they will listen to us even in this case. We are going to them to present our thought process. May be some wrong impression and feedback has gone to them, our duty is to explain to the regulator.

The second phase of DAS will conclude soon. Any problems that you faced in this switch? What is the percentage growth in revenue in phase two as compared to phase one?

We are still waiting for a transparent system. With digitisation the consumer can chose what they want, and pay for it. This transparency has not come out so far. We are still not getting reports from the MSOs and do not know who is watching what. These are the bottlenecks that we face.

We were looking at ambitious numbers when digitisation kicked off. We didn’t get that in the first phase. Also as responsible stakeholders we curbed our ambitions then because we knew it would be difficult to expect a huge jump in the beginning. We supported the MSOs, which is what the regulator wanted us to do.

But with the completion of phase II, we should be inching towards that fair share, which should be around 35 to 40 per cent of the on-ground subscription revenue collected. This should happen by April 2014. Channels cannot survive only on ad sales, subscription money is a very important revenue stream for broadcasters, but unfortunately it hasn’t so far happened in India.

Another problem that the broadcasters face is the high carriage fees. In an analogue system, due to capacity constraint, broadcasters had to pay huge carriage fees. But now with digitisation there is no question of any capacity constraint, so why have carriage fees?

How are you playing out the carriage fee market? Will the carriage fees come down? How much has this come down, pre- and post-DAS?

 In the next three years there should be no carriage fees. Though carriage fees  have come down post DAS, we still have been paying some placement fees to support the MSOs as they make their transition. But, with the completion of digitisation, even this should go down.  I expect carriage and placement fees to disappear over the next two to three years. While these were expected to go down further by phase II of digitisation, it has only been to the extent of about 25 per cent.

Earlier the subscription revenue share we (read: broadcasters) were getting from the cable TV ecosystem was about 10-15 per cent. Now it has gone up to maybe to 20 per cent on the overall. Some broadcasters may have got 25 per cent but others may have got lower amounts of the digital dividend.  Many of the channels don’t get any subscription revenues because in the analogue environment they could not afford to have that as a part of their business model. With digitisation all this could change.

Do you plan to add more channels in the bouquet? What was your strategy to ensure that you had Times Network in your bouquet, when other news channels were walking out of the bouquet?

We are not market shopping for channels and we are not desperate. Only if tomorrow we come across something good, we will think of adding it to our bouquet.

We added Times Television Network to our bouquet this year. It was a mutual decision between the two of us. They fitted in our profile and also they wanted to be a part of our network. They are a premium channel and they deserve suitable revenues considering their performance and we at The One Alliance are working to get them those revenues.

We are in the process of concluding deals for Times with other MSOs. We have finished with Hathway, GTPL, and some other MSOs. And more are coming.

You had a dispute with Hathway going on for some time? How is that progressing?

There were many issues like are bound to happen in the cable TV business and yes one of these issues was the one we had with Hathway. And one of the issues - amongst the many issues - we had with Hathway was The Times network, which we have been distributing. But we amicably resolved all the issues with Hathway this evening. And the One Alliance bouquet of channels should have come back on all of Hathway networks by this evening. (26 August).

It’s been 11 years in the business, how has the journey been so far?

The journey has been fantastic. While we started with three or four channels now we have a bouquet of 28 channels, with extremely powerful and premium channels. We have various genres, we have a solid name and repututation. It has a journey which has had  more ups than downs.

Unfortunately, even with the IPL being the biggest sporting property in this country, we have not been able to monetise it well due to under declaration. But, now we have aggressive plans to monetise it for the next season..

What are the key pointers that set The One Alliance apart from other aggregators? As compared to others aggregators you have less channels, is that a limitation. How do you see things going ahead?

We are the most stable joint venture (JV) in the industry. All the other aggregators are just a couple of years old. Our partners are very much involved and keen to ensure that the stability continues. For us the quality of the channel is important. We have never been in the race of having 50-60 channels in our bouquet. 

We have channels from different genres in our bouquet and most of them are amongst the top two or three ranking in their respective genres. There are many more who want to be a part of One Alliance, because they trust the JV. Also our dealings are very transparent. We can add two to three channels at any given time, but our policy doesn’t allow us to do that. We have always believed in quality and so want to have premium channels in our bouquet.

Today we are the strongest, despite having 28 channels. Also we are the only one having a sports channel in our bouquet unlike the others. Considering we have most genres covered in the bouquet, I don’t see any limitation. Our revenue is far higher than the others.

Are you selective about the channels you take in the bouquet? What are the criteria that a channel needs to fulfill to be a part of The One Alliance bouquet?

The channel and the company backing the channel should have similar kind of values and ambitions like ours. We also look at the channels’ performance, which we understand on the basis of the weekly television viewership ratings.

What is the reach of the bouquet and which is the largest channel in the bouquet?  

We currently have 28 channels from different genres in our bouquet. Sony Entertainment has the largest reach and, during IPL, Sony Max gets the largest reach.

IPL is the biggest sporting property that we have. What is interesting is that though most sporting properties are a simulcast with Doordarshan, IPL is the one property which is exclusive on Max. This makes it the most important property in the sporting channel world and we have it.

We are present almost across the country. We would be there in around 90 per cent of the towns, which have cable and satellite, but through DTH our reach is 100 per cent. Close to some 6,000 cable networks across the country carry our channels. 

What is the current strength of the organisation?

One Alliance employs 125 people with offices in Delhi, Bengaluru, Kolkata, Indore and Mumbai. Apart from this, we also have a strong distribution network with distributors in Rajkot,  Pune, Ahmedabad, Guwahati, Patna, Ranchi and Lucknow among others. Like this we have offices in 60 cities. The distributors have their own employees. So, if we take a cumulative strength, we have around 350 people working for us.

The major revenue for The One Alliance is dependent on IPL. So till how long will IPL be with Sony Max? How do you maintain subscription post IPL and also with so many controversies surrounding IPL, how will you deal with it?

 Unfortunately, even with IPL being the biggest sporting property in this country, we have not been able to monetise it well due to under declaration. But, now we have aggressive plans to monetise it for the next season.

What are the future plans for The One Alliance?

We have to lead the change and ensure that everybody gets their fair share.

Latest Reads
MIB, DoS nudge TV channel to use Indian satellites

MUMBAI: In what could be interpreted as unease of doing business instead of ease of it, the Indian government is nudging TV channels to deal with Indian entities if they employ the services of foreign satellites. And, till that happens, permissions are being withheld or delayed.

Regulators I&B Ministry
TRAI clears path for broadband, voice services aboard planes

Broadband connectivity and making voice calls from 32,000 feet above sea level while flying may soon become a reality over Indian space if broadcast and telecom regulator TRAI’s recommendations are accepted by some other government organisations, including ISRO.

Regulators TRAI
TRAI extends dates for comments on uplinking/downlinking consultation paper

The Telecom Regulatory Authority of India (TRAI) has extended the deadline for receiving comments on the consultation paper relating to uplinking and downlinking of TV channels. The new dates for receiving comments and counter-comments are 31 January and 10 February respectively.

Regulators TRAI
TRAI invites ICT-based solution providers to upgrade tech

NEW DELHI: With the demand for a wide range of services based on ICT platform involving machine-to-machine and internet of things, etc. increasing, Indian broadcast and telecom regulator TRAI is looking at expanding its technical capabilities and, in this regard, has invited proposals from...

Regulators TRAI
MIB mandates broadcasters to make applications via Broadcast Seva

MUMBAI: In its latest move to ensure ease of conducting business, the Ministry of Information and Broadcasting (MIB) has mandated TV broadcasters to make online applications for a range of submissions.

Regulators I&B Ministry
TRAI releases paper on National Telecom Policy 2018

Seeking views from stakeholders on the new telecom policy, the Telecom Regulatory Authority of India (TRAI) today released a consultation paper on inputs for formulation of the National Telecom Policy 2018.

Regulators TRAI
TRAI tightens the screws on interconnectivity for telcos

The Telecom Regulatory Authority of India (TRAI) has issued a mandate to service providers directing them to enter into an interconnection agreement on a “non-discriminatory basis” within 30 days of receiving a connectivity request from another mobile operator.

Regulators TRAI
Cross-media holding: Indian policymakers push for regulations

A section of policymakers in India is not in favour of market forces taking care of monopolistic trends in the increasingly converging print and electronic media. It has recommended government intervention—a thought-process that can have wide-ranging implications on activities of broadcasting...

Regulators I&B Ministry
Parliamentary panel pushes for TRAI's empowerment

MUMBAI: Parliament’s Standing Committee on Information Technology and Communications (SCIT) wants more regulations for the broadcast industry. Finding the current powers given to the Telecom Regulatory Authority of India (TRAI) inadequate, it has recommended that either the scope of its authority...

Regulators TRAI

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories