KOLKATA: With the evolution of the media and entertainment industry, the boundary between friends and foes is fading away. The future is not about competition, but collaboration for long term sustainability, NXTDigital media group CEO Vynsley Fernandes believes. Moreover, the future of the distribution industry lies in consolidation and bundling all bills together, he says.
Fernandes, an old face in the cable distribution industry, has recently been elevated as media group CEO of Hinduja group’s NXTDigital. The new role not only includes digital cable, HITS but also broadband and content business. To drive the growth of all businesses, he is looking to synergise cable TV or HITS service with broadband. While the video segment has got around 5.38 million customers, the broadband business nets 0.0408 million subscribers currently. He notes that the company has already seen good traction in combination service during Q2.
However, NXTDigital is looking at pushing the product in selective markets where it already has a strong presence and a qualitative need for video and broadband is noticeable. The company has a stronghold in Mumbai, the rest of the west market, as well as Bengaluru and Delhi. Adding to its bastions, it has now set sights on West Bengal, Andhra Pradesh and Telangana market. Fernandes emphasises that bundling products and solutions is very important at this point in time for the entire industry. Additionally, one of the biggest benefits of bundling is cost optimisation. During Diwali, NXTDigital has launched its hybrid device NXT Connect, which offers linear as well as OTT.
“We are looking at penetrating our own customers of cable TV and HITS. We are looking for broadband to grow as it has been growing. The broadband segment has seen 16 per cent quarter-on-quarter growth in Q2. We are hoping for double-digit growth over the next two quarters in terms of broadband as a function of synergy. On the cable subscription side, we are not going to pursue revenue at the cost of profitability. We are not just rolling out discounted packages as ours is a qualitative product,” he comments.
The ministry of information and broadcasting (MIB) has recently amended the HITS guidelines by allowing the sharing of infrastructure by HITS operators with MSOs. Hence, Fernandes identifies it as a big area of growth. As infrastructure sharing can reduce the cost of connectivity significantly, he is of the belief that many operators would like to ride on their platform. Currently, they are exploring how to leverage this opportunity in the B2B model. He also mentions that competitors will have no hesitation in partnering with them thanks to the transparency brought in by the new tariff order.
“One of the benefits of infrastructure sharing will be cost-optimisation. Before NTO, the biggest cost was content. You had to negotiate with the broadcaster. Thanks to NTO, the whole model is changed and there is transparency. The second biggest cost for everyone is connectivity. We believe connectivity costs can be leveraged by more and more operators joining together to share infrastructure and share services like our own infrastructure sharing. If they cut down the cost, they will have a better bottom line,” he explains.
Among other options, there is still a huge opportunity for value-added service (VAS) as well, he adds. The main reason is the availability of various content in the linear model and in different regional languages. He also mentions that content provided by One Take Media and Shemaroo Entertainment is quite unique. As the company has seen good traction in the last few years, it has kept on continuing those services along with adding new ones. The MSO looks at three metrics for VAS — age, group and genre.
According to Fernandes, the first half of the financial year 2020 had several positive as well as negative impacts on the sector, owing to the Covid2019 crisis. The lockdown brought greater engagement, higher viewership. For instance, kids programming has seen good offtake during the period while IPL has boosted TV viewership in the latter half. But labour migration, economic pressure did not bode well for the industry. However, he maintains that TV has a long future ahead with a continuous cycle of consumer evolution, gradually moving the ladder from FTA to pay TV, and the combination of HD and OTT.