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DEN’s Mumbai JV takes indie route on Star’s RIO; MCOF claims some MSOs agree to a la carte proposal

MUMBAI: While DEN Networks has inked a deal to put seven Star India channels in their basic pack offering for subscribers, the multi-system operator’s (MSO) joint venture company in Mumbai is planning to chart its own course.

DEN Satellite Network (DSN) has decided to offer the Star channels on a la carte basis from 1 December.  Local cable operators (LCOs) of DSN will be able to source the Star channels under various schemes so that consumers will have options to exercise their choice.

Sans the Star channels, the LCOs will have to pay DSN Rs 70 a month per subscriber for the basic tier package. They can then add the Star channels and pay according to their a la carte rates.

“We will not be adding our margins on top of the RIO [reference interconnect offer] rates of the Star channels. The LCOs can take it from us at the same RIO rates. They can then offer it to the consumers at a mark-up price,” said DSN director Ravi Singh.

Besides offering to the LCOs the Star channels at a la carte rates, DSN will experiment with other schemes that are to be introduced from 1 December. The MSO will offer the LCOs a choice of taking three Star India channels—Star Plus, Life OK and Star Pravah. The LCOs will have to pay Rs 112 a month per set-top box (STB) and will be given these three Star channels and the other non-Star channels that are part of the MSO’s base pack.

For the next higher pack comprising two Star Sports channels, LCOs will have to cough out Rs 120 a month per STB. Besides the Hindi entertainment channels, they will also get Star Gold and Movies OK.

“We are basically creating three packages for the LCOs to choose from. Without the Star channels, LCOs will have to pay us Rs 70. With Star Plus, Life OK and Star Pravah, the LCOs will be required to pay Rs 112 (along with the other channels that are in the base pack). If the LCOs also want two of Star Sports’ channels, then they will have to pay Rs 120,” said Singh.

All of Star’s English-language entertainment channels will be available a la carte, Singh added.

Earlier, after 10 November when the Star’s RIO and incentive-based amended RIO came into force, DSN was offering Star Plus and Life OK as part of its basic tier package.

“We will do away with this arrangement from 1 December. We will have a la carte channels. The LCOs can also take the Star channels under the schemes that we are introducing. We are going to experiment with this,” said Singh.

Meanwhile, the Maharashtra Cable Operators Federation (MCOF) claimed that some national MSOs have agreed to offer Star channels on a la carte and not bundle them as part of their tiered packages.

MCOF president Arvind Prabhoo said that only Hathway Cable & Datacom is yet to communicate its decision. “The meetings with IMCL, DEN and Siti Cable went really well. IMCL came forward and said they would provide Star channels on RIO only. They have also decided to offer the channels on cost price, sacrificing their commission for a couple of months,” Prabhoo said.

TelevisionPost.com, however, could not independently verify this. IMCL officials declined to comment on the issue.

There is still ambiguity about Hathway’s decision. “While Hathway was the first to say that they will take Star channels on RIO, they also lapped up to the incentive deal. When we met them on Tuesday, they told us that they would communicate their decision. We are awaiting their decision,” said Prabhoo.

Prabhoo added that while the MSOs will offer the channels on cost price, without any commission, it will be up to the LMOs (last mile owners) to charge the end users. “But we won’t charge a very high amount as we also have to compete with DTH. Depending on areas, the commission may vary from 10 to 15 per cent,” he said.

The MSOs have not made any official statement on what kind of arrangement they are going to have with the LCOs in Mumbai. If they accept what Prabhoo is stating and charge no commission outside the RIO rate, then it will mean that they will not make money on the Star channels. And if they are to get discounts on the Star’s original RIO price, they will have to guarantee the broadcaster a minimum level of penetration, channels subscribed and logical channel number (LCN).

It may be recalled that the MCOF had called a meeting of the LMOs in Mumbai on 24 November, which saw a very strong turnout and wherein it was decided that the operators would convey their request to the MSOs about providing Star channels only on RIO.

“DAS is all about transparency, and if Star has decided to go for RIO, why are MSOs bundling the channels for incentives? We are not getting any incentive and losing consumers to DTH. So let the consumers decide. Our operators will educate the consumers about Star channels, and whoever wants to take the channels can pay and opt for them. It will increase our ARPU [average revenue per user] as well,” Prabhoo explained.

Prabhoo also informed that while the MSOs were charging Rs 65–85 per subscribers, they were asking for Rs 115–130 following the Star deal. “It was not possible for us to give such a steep hike,” he added.

Also read:

Offer Star channels only on a la carte, MCOF-backed LMOs tell MSOs