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Amended RIO agreement will benefit all stakeholders: Uday Shankar

MUMBAI: Star India CEO Uday Shankar has said that the broadcaster’s amended reference interconnect offer (RIO) agreement can create a win-win situation for all stakeholders if the multi-system operators (MSOs) take the lead and implement it properly.

According to Shankar, MSOs should make the most of this and create packages that cater to diverse kinds of consumers.

Mr. Uday Shankar, Chairman of Ficci's M&E Committee and Star India CEO giving the Opening Remarks at FICCI Frames 2014“The success of the scheme depends on the fact that MSOs and cable operators will now have to actively sell packages to the consumers. You can’t leave the consumers to decide because the consumer needs to be educated and that’s something all DTH guys have done very well. So if they can do this, it can work very well not just for broadcasters and platforms, but also for consumers in a very big way,” Shankar said.

The amended RIO agreement that offers a slew of incentives to (MSOs) is based on uniform pricing to maintain a level playing field for all cable TV platforms. The incentives are based on the number of Star channels carried, the number of viewers and the ease of access to these channels.

Shankar underlined the fact that the amended RIO agreement is completely transparent and non-discriminatory to all MSOs irrespective of size.

“The deals will be transparent and non-discriminatory with everybody. So all the terms and conditions on which we will do deals have been laid out for everybody. In order to align our objectives with the objectives of the platform and to make the burden reasonable on the consumers, we have created a series of incentives that would make it affordable for the platform,” Shankar added.

He said that the amended agreement will ensure that 1) consumers do not have to pay crippling bills, 2) channels continue to be affordable for the platforms and 3) Star’s core objective of distributing maximum number of channels to the maximum number of people is met.

He also stated that distribution platforms are free to take as many channels as they want. “There will be no discrimination between the guy who takes one channel and the guy who takes two, except by creating a set of attractive enabling incentives,” he asserted.

However, the more the number of channels an MSO takes, the less they will cost them, Shankar emphasised.

Shankar also brushed aside the suggestion that Star channels are unaffordable, arguing that subscribers will not necessarily subscribe to all the channels.

“The bill would be unaffordable on the original RIO rate only if you assume that every MSO will give every single channel of Star to every consumer. That is a ridiculous proposition because that’s not how it happens, because why would one give Vijay TV, Asianet or Suvarna to consumers in Lucknow and Star Plus, Life OK, Movies OK or Star Gold to a consumer in Kerala?” he explained.

He said that the price of the channels won’t be different from what they are if the MSOs create packages akin to DTH platforms and take advantage of the incentives laid out in the amended RIO agreement.

“Digitisation was meant to introduce packaging and tiering of content, which hasn’t happened. As a result, people are adding up the prices of all the individual channels and saying that the bill would be unaffordable. I dispute the contention that the bill originally would be unaffordable; it will probably be higher,” he maintained.

Shankar held that RIO is a win-win proposition for all stakeholders and that is why Star India had taken a conscious decision to file an affidavit with the TDSAT, stating that it would do only RIO deals in DAS (digital addressable system) areas for a period of one year.

“We have taken a position in the tribunal as well as with the regulator by publishing the amended RIO agreement that RIO will be the basis for doing deals. And I think it is a good thing to do and that’s why we went ahead and filed the affidavit,” Shankar stated.

“The court didn’t ask us to file the affidavit. We are the ones who offered to file the affidavit because if the court is so concerned about parity and lack of non-discrimination, then the only way to achieve that is RIO. How else do we achieve it?”

On the TDSAT’s observation in the Hathway matter that other MSOs got better deals, Shankar said that the law also allows negotiated agreement. He said that the RIO is the default currency only if the two parties do not come to an agreement.

“If the law allows doing negotiated agreements, then it also allows doing different agreements with different people as per your negotiation and that is what everybody has been doing for a decade now. We felt that the whole observation was a little unfortunate, but I decided that I will not give opportunity to anyone to point this out,” he stated.

Also read:

Star India offers incentives to cable TV ops in amended RIO agreement