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Report on Shemaroo

Tata Sky awaits MIB approval for Rs 250 crore investment

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MUMBAI: Direct to home (DTH) operator Tata Sky has been applying a wait and watch policy not only for transponder space, but also for an approval from the Information and Broadcasting Ministry (I&B), for an additional Rs 250 crore investment.

“The money for the project has already come. But, if the approval doesn’t come in the next 48 hours, I will have to return that money to the foreign investors,” said Tata Sky MD & CEO Harit Nagpal, while addressing the inaugural session at FICCI FRAMES 2015.

Responding to this, I&B Ministry additional secretary JS Mathur said, “Well, we had granted the approval a month back, and then Tata Sky realized that for the route it wanted to take with the investment, it had to reapply and this is the reason it is taking time.”

Taking cue from Prime Minister Narendra Modi’s ‘Digital India’ campaign, Nagpal said, “The enabler of connectivity is broadband.”

As per Nagpal, with low Average Revenue Per User (ARPU), putting fresh wires in the country would not give any return on investment. “Otherwise, there are enough hungry entrepreneurs, who would have used the opportunity. And if they haven’t, means that conditions are not viable in the country,” opined Nagpal.

The country, though has hundreds miles of wires all over, which can carry broadband, and all it’s waiting for is an enabling and uniform environment, to use this infrastructure and deliver broadband to the consumer. “The rest as has happened in telecom, will happen,” he added.

According to Nagpal, the industry lacks new thinking. “If anybody finds a successful format, 20 others follow and copy. I have seen general entertainment channels (GECs) being launched as pay TV, churning out the same content, and then either vanishing or becoming free to air (FTA). They lose viewership and distribution and then they are forced to carry 20-22 minutes of advertisement, which the regulator starts questioning and they are then seen sitting in courts,” he said.

The problem, as per Nagpal, is not the producers, but the economics of the business, the restrictions and the permissions needed to do business. “All this restricts the producer from taking risks and choosing a safe and successful path,” he said.

Nagpal, further went on to say, “I don’t think there is room for more Stars, Zees and Sonys. Also there is one Arnab and one Barkha, you can’t have too many of them. It is the niche, which will take us forward, and they are low investment and high return product.”

Flair of creativity and new ideas is the key ingredient in the media and entertainment sector. “The deeper I travel, the more gems I see, but the production centres in the country are all located in the big cities. There is need to take production centres in smaller towns, where the talent is and create more self employed professionals in those areas,” he added.

According to Nagpal, while the rules for setting up, funding and running the business are in place, one still needs to follow rules and ask for permission at every step. “Things have improved in the past few months and the government is keen to clear files, faster than ever before,” he said.

The only way the industry can grow, as per Nagpal, is by allowing the businesses to inform and not seek approvals and also by self regulation. “In case we violate the law, issue penalties, cancel the licence,” he announced.

Touching upon the movie business, Nagpal said that while we make the highest number of films, the industry is still not making money. “We have reached a choking point in terms of adding screens and it is marred by either high cost of real estate or the long list of approvals,” he said.

According to Nagpal, the increasing number of digitized homes will help more producers to monetize their production. “This has already started, a lot of films are breaking even only on the basis of selling their rights to cable and satellite,” he said.

The country has seen digitisation of 42 cities. Touching upon the condition in the digitized cities, Nagpal said, “The local cable operators are running the digitised area and the multi system operators (MSOs) are watching. Customers are not getting packages they want and neither are they getting value added services. The customers are willing to pay, unlike what is being projected by LCOs.”

Digitisation is equal to automation. “The new role of the LCO is to be of a service provider to the MSO and not a partner. I think this needs to be thought about,” concluded Nagpal. 

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