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Jawahar Goel expects 20% reduction in Dish TV’s content cost under new tariff regime

Lack of preparedness of MSOs will enable DTH platforms to add more subscribers.

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MUMBAI: With the new tariff order being implemented from 1 February, India’s largest DTH operator Dish TV expects the overall content cost of the company to come down by at least 20 per cent. The DTH brand also thinks that the regulatory framework will help DTH operators to add more subscribers as many MSOs are not prepared for the implementation.

Talking to analysts after Q3 earnings, Dish TV chairman and managing director Jawahar Goel said the company could not discuss the new payout to broadcasters because of the tariff order but which will start happening from this quarter. The new model will reset things and the veteran thinks overall content cost will reduce.

“Currently, our pay channel cost is 35-38 per cent. In case for D2H it is roughly around 40 per cent. If we are paying Rs 2300 crore, we are expecting content cost on net basis will be around Rs 1800 crore,” he added further.

When the management was asked about not having much impact on subscriber addition despite early undertaking of its strategy for tariff order unlike its biggest competitor Tata Sky, Dish TV India group CEO Anil Dua said it is a short term trend. He also added that the company firmly believes tariff order is good for the long run. Dua also mentioned about Mera Apna Pack on Dish TV and Mera Wala Pack on D2H which gave consumers scope to choose a channel on a-la-carte basis way before the tariff order was implemented. According to Goel, Dish TV had familiarised this new concept to almost 8 million subscribers.

Goel also said that as customers tighten their purses, small broadcasters who don’t have price-worthy content will be forced out of the market.

“You must have seen there are around 15-20 Hindi movie channels. They are surviving on connectivity as well as the capacity to buy content compared to lower established players. I think they will go out from the market. So, I think movie buying rights will get reset,” he added.

The company is optimistic about subscriber addition despite the ongoing uncertainty in the last quarter. According to Goel, the lack of preparedness of MSOs will lead to channel switch offs on those platforms paving the way for DTH platforms to add more subscribers.

Moreover, he also thinks Jio’s full entry into cable TV business may take at least another three to six months as both MSOs in which the telco giant acquired majority stakes are also prepping up for tariff order implementation. He also added that Jio has not been able to have any considerable effect on the business till now.

However, despite being highly optimistic about the new regime, Goel is not happy with the revenue share with broadcasters. “We are not happy with this 20 per cent margin that is being given by the broadcaster. So, we are negotiating with them, talking to them. These things will start happening after the broadcaster gets first or second weekly report of their channel viewership. Thereafter the new discussion will start happening,” he commented.

Goel also spoke on recommencement of DD Free Dish e-auction by mentioning that the most popular channels of four major broadcasters, such as Zee Pal and Star Bharat, will be withdrawn from the platform. “That is why you must have seen that in a-la-carte they are priced channels, they are no more free,” he added.

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