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Dish TV and Siti Cable to deal with broadcasters jointly
MUMBAI: Ahead of digitisation in Phase III towns, Essel Group’s two distribution platforms are uniting to stitch content deals that are favourable to them.
In a move that will have deeper ramifications, direct-to-home (DTH) player Dish TV and multi-system operator (MSO) Siti Cable Network have joined hands to start dealing with the broadcasters together. The joint negotiations come into play with immediate effect.
The leading DTH player and the MSO have formed a common entity, ‘Comnet’, which will help synergise the strengths of both the organisations. Their purpose: to shift the balance of power in favour of the distribution platforms.
Comnet’s main job will be to keep content cost low by displaying a combined base of 20 million digital subscribers.
While Dish TV has curbed this upward trend to a large extent, there is potential threat that content cost for Siti Cable could surge as India heads for digital addressable system (DAS) in Phases III and IV. These are low-ARPU towns in general and MSOs have been asking broadcasters to keep the pricing of their content lower than Phase I and II cities. Broadcasters, however, have been reluctant to do so.
“The joint efforts of Dish TV and Siti Cable will help in servicing the combined base of over 20 million customers and aggressive expansion for both the organisations. There is a need to unite to ensure that consumer remains central to both broadcasters and the distribution platforms,” said Siti Cable CEO VD Wadhwa.
Comnet’s purpose is to ensure that consumers can access content at affordable prices. Content cost, thus, should be in sync with consumer ARPU and market realities. With Phase III digitisation deadline coming up, Comnet will ensure a larger participation for both the entities.
Dish TV CEO RC Venkateish said, “This move will help both the entities to provide quality content at affordable price to their consumers.”
Dish TV and Siti Cable feel that the pay TV market is predominantly controlled by few broadcasters and the balance of power remains in the hands of popular content owners.
Signing yearly contracts with broadcasters in an environment where scales are always tilted in favour of popular content is a difficult process particularly when the consumer ARPU is under pressure, the two companies said.
The formation of Comnet comes at a time when both Dish TV and Siti Cable are in an expansive phase. Dish TV is targeting anywhere between 1.5 and 1.7 million net subscribers in FY16. It also expects its sub-brand Zing to do well in the price-sensitive markets of Phase III and IV.
As per data till 31 March 2015, Siti Cable has 5.38 million digital subscribers. The MSO has a total subscriber base of 10.5 million.