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IDOS 2014: Alternative platforms eye growth in phase III and IV of digitisation

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MUMBAI: With digitisation being delayed for phase III and IV of digitisation, alternative platforms such as HITS and OTT will see their importance rising. Speaking on the growth of alternative video platforms were Doordarshan deputy director general CK Jain, IMCL MD and CEO Tony D’silva, JAINHITS MD Ankur Jain and Zenga TV MD and CTO Shabir Momin moderated by indiantelevision.com founder, CEO and editor in chief Anil Wanvari and Media Partners Asia executive director Vivek Couto.

Couto started off by asking how the digitisation delay will impact DD’s DTH service Freedish to which CK Jain responded by saying that it won’t hurt Freedish or DD much because most of DD’s audience is in phase III and IV markets. “There are still many households that don’t yet have a TV set but I’m sure that the new households are likely to have DD Freedish as the connection or our upcoming DVB T2 service. So even if we lose out on some numbers, we will most likely make them up with the new ones,” he said.

Ankur Jain was then asked to explain a bit about his HITS model to which he highlighted that JAINHITS has 253 services out of which 140 are free to air (FTA) for which no subscription is charged. However, the road wasn’t easy for them. He said that most broadcasters refused to give content on the pretext of geo fencing and piracy. “It took six months of TDSAT and High Court. But we still have one of the highest content rates in the industry as most of them are on RIO which we subsidise for our partners,” he said.

JAINHITS has signed up with nearly 300 partners in 240 districts that have an analogue base of 2.7 million customers. As far as digitisation delay is concerned, Ankur Jain said, “The Minister had started making noise around the delay a while before it was announced and indiantelevision.com wrote the first story on it and it spread like wildfire. But we haven’t seen any real change in business volumes, demand for STBs, headends etc.”

According to him, this model acts like an aggregator for the smaller operator and for bigger ones, an opportunity to reach smaller markets where they don’t have fibre or reach. When questioned about the challenges a HITS operator has to face, Ankur Jain said that it was the pressure to keep STB cost low. But eventually, it was seen that the STB that was sold to the LCO at Rs 2300 was being sold by the LCO to the customer either at Rs 2300 or Rs 2500. “The cable guy was cribbing that we would make him bankrupt. But they have the money and ability to talk to consumers and in most cases, they market the price up and sell it,” he pointed out.

Mindset is also an issue while dealing with content companies because some of them want average revenue per user (ARPU) to go up while some want to selectively distribute and keep ARPU low and charge good rates.

On the other hand, D’silva feels that the Hinduja ideology for launching HITS is different. “One of the major issues of phase I and II was that we aren’t getting fair share. The reason why we are looking at HITS is to bring order in disorder and we are spending considerable money to upgrade and take this network itself up,” he said. Content, however, remains an issue but according to him the way forward is to take content and make universal bundles.

D’silva claims that for cable operators nearly 60 to 65 per cent of revenue comes from phase I and II, which is about 30 million with another 100 million lying in phase III and IV. With this, bundling dynamics will have to change. The Hinduja HITS model is looking at launching prepaid from the first day along with services such as VAS, TV Everywhere etc.  “It is not about delaying or advancing digitisation. It is whether we make the same mistakes or learn from it,” he said.

He also said that he isn’t convinced about digitisation being mandated solely to increase ARPU as according to him ARPU is a function of the derivatives that are put in.

Addressing Momin, Couto asked him to highlight a bit about the digital model. Momin started off by saying that digital has always been taken either as a threat or as inconsequential.  “We are building for a leapfrog future. I have to worry about 19 formats (devices). Our advantage is lack of hierarchy leading to more growth,” he said.

The dynamics of digital is different where success is measured by minutes watched. Momin says that for digital platform, the important thing is to establish reach through good content. “I run two companies, Zenga TV and One Digital, both of them PAT positive. Sitting in India, we have a global platform with about 40 per cent revenue coming from international which has only 10 per cent viewership because their CPM rates are higher,” he said.

Couto asked whether advertising revenue from India was sufficient and if it was coming out of TV and whether this will lead to a subscription based model for OTT anytime soon. Momin feels that the last few years have seen content makers rip people off by giving low quality product, thereby losing trust. “Very few people will say that I don’t want to look at an ad, I want to pay for quality content,” he said while stating that brand integration was an important means of revenue.

Momin said that brands that were spending about Rs 50 lakh last year are now spending Rs 3 crore to Rs 3.5 crore but the important thing is brands mandating agencies to look at digital more. As far as ad rates are concerned, they aren’t the best in the world because of lack of good ad formats.

Coming to an end to the session, Couto asked the HITS players to highlight their value in the ecosystem. Ankur Jain said that JAINHITS is helping digital India plan, DOCSIS and two way cable be a reality while D’silva said that broadband would be a success when entertainment is added as an important quotient to ‘roti, kapda aur makaan’. 

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