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GroundPost: Time to look back on Phases I and II
HISAR: The first two phases of digitisation had posed a mammoth exercise: The industry waited till the last moment, with apprehensions, and then rushed into it without being actually ready. But now that the government has pushed the deadlines for DAS Phases III and IV, there is some time to go about it in a more proper manner. This was the consensus panellists reached at the Hisar leg of GroundPost, TelevisionPost.com’s itinerant digital summit.
The panel, ‘Haryana: A big Phase III market’, saw the participation of Siti Cable COO Anil Malhotra, MSM Discovery’s Jagraj Singh Sangera, and senior cable operators from Delhi and Haryana—Rahul Dabbas, Shailendra (Shally) Chopra and Pale Ram. The panel was moderated by TelevisionPost.com co-founder and editor-in-chief Sibabrata Das.
Talking about the mistakes and the lessons learnt from the first two phases, Malhotra said, “It was a huge exercise to transition to digital from the historical analogue system. There was a cut-off date for all analogue signals to go off. It was not possible to convert millions of homes overnight in digital addressable system. There was confusion among many on whether it [Phase I] would happen or not, and so we all waited till the very last day, much like what people do when it comes to filing income tax returns. This long wait made it a mammoth exercise.”
Consequently, pre-activated STBs were distributed, there were revenue share issues, content deals were not in place and even packages were not made. “There was no time to pay heed to the customer’s choice. Unfortunately, Phase II was the same. But our operators worked day and night to convert the customers from analogue to digital. There were apprehensions among the operators as to if they would be able to run digital cable.”
He also noted that while the main purpose of digitisation was to give the customer certain choices, it didn’t happen. “In Phases I and II, we did it in a hurry and did not take note of viewer’s choice. Now, we have one year for Phase III. We can rectify the errors by first asking about viewers’ choice and implementing addressable system smoothly.”
Dabbas, a senior operator from Delhi, said that the biggest problem is the revenue share arrangement between MSO and LCO. “The operator doesn’t want to collect from the ground. Till the ARPU doesn’t increase from the ground, the situation will not improve,” he said.
Dabbas also emphasised the need to change attitude towards work. “We have to first change ourselves. We are no longer the cable guy who used to have a wire and a ladder. We have to improve our image and be the service provider.”
The panellists also discussed how, at one point of time, the collection from Haryana stood in excess of Rs 300 per household; however, it has come down to Rs 200–250 now. At the same time, here the pay-out to the broadcasters is among the highest in the nation.
Chopra said, “Our [cable operators’] competition is with DTH, which is eating up our revenues. When DTH started rolling out, people used to say it wouldn’t succeed, not even in the US. Cable operators could manage to collect Rs 300 per home five years back, but today they can’t charge more than Rs 150–200, thanks to DTH.”
“The problem is that everyone, including broadcaster, MSO and the government, wants to secure their revenue, but they should at least see the ground reality,” he lamented.
Pale Ram added that the fight is for revenue share and there is no agreement between the MSOs and LCOs on the same. “We are fighting for that only. In Panipat, we used to charge Rs 360 per home seven years back. Today, we are able to charge just Rs 150. If we are charging Rs 150–200, how much can we give to the MSO and how will it be divided?”
Dabbas said that broadcasters don’t want to consider the predicament of the MSOs. “They think about their own share and ask for growth every year with launches of new channels.”
Giving a broadcaster’s perspective, MSM Discovery’s Sangera said that while the number of channels kept increasing, rates didn’t. “Why didn’t you value the content? Now when you see that content cost is increasing, you are planning to add value, but you can’t because you are competing with DTH. Business can happen only when the whole chain functions smoothly.”
He said that the rates are stuck at Rs 200 because operators were not ready to charge more. “You have to change the mind-set. Smartphones are costlier than what a two-wheeler would cost when you first started charging Rs 150. While rates of everything have increased, why should the cable bill remain the same?”
He said that the amount needs to be taken from consumers only, but in exchange for quality of service and choice. “Most important is to get all three stakeholders—broadcasters, MSOs and LCOs—together and chalk out differences.”
When asked if RIO is the way forward, Sangera said that while RIO is necessary for increasing the ARPU, one has also to look at the market potential. “In addition, the basic things like systems and packaging are not in place, and till clarity and transparency happen, I don’t think RIO will work,” he commented.