26 Sep 2017
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Hathway Cable and Star Sports battle it out over DAS deals

MUMBAI: The battle between multi-system operator (MSO) Hathway Cable & Datacom and India’s biggest sports network Star Sports India is going to intensify further as the former has decided to put the latter’s channels on a la carte in digital addressable system (DAS) Phase II cities.

The DAS Phase II deal between Hathway and Star Sports ends on 31 March. Hathway is already offering Star Sports channels on a la carte in DAS Phase I cities.

Star Sports offers four standard-definition (SD) channels including Star Sports 1, Star Sports 2, Star Sports 3, and Star Sports 4, and two high-definition (HD) channels such as Star Sports HD1 and Star Sports HD2. The four SD channels are available at Rs 15 per channel on Hathway.

Jagdish KumarHathway Cable & Datacom MD and CEO Jagdish Kumar stated, “We have decided to put Star Sports channels on RIO as it will help us in managing our content costs. As it is, sport is a seasonal property and is largely event driven.”

Kumar said that only 10 per cent of its subscribers have subscribed to one or the other Star Sports channels ever since the MSO started offering the channels on a la carte since February.

“Since we have put Star Sports channels on a la carte, only 10 per cent of our subscribers have subscribed to these channels. If only 10 per cent consumers want these channels, then why should we pay for the entire universe?” Kumar said.

The MSO, however, is offering Star Sports’ rival channels as part of the package. Kumar said that the deal with other sportscasters is rational, which is why those channels are being offered as part of bouquets.

It is pertinent to note that leading direct-to-home (DTH) service provider Dish TV has been providing Star Sports channels on a la carte basis only.

Kumar also pointed out that MSOs are facing a lot of challenges on the ground. “MSOs are not able to collect money from the ground. Despite that, the broadcasters are pressurising us to give growth in subscription fee. Besides, the government is behind our life to pay taxes and LCOs are also resisting revenue share,” he added.

The trouble between the two parties began when the DAS Phase I deal came up for renewal.

While Star Sports, which has pumped oodles of money into buying rights, wanted a double-digit increase in its fixed fee deal, the MSO refused to yield to the sportscaster’s demand contending that it has been facing serious issues with collecting money from the ground.

When the two sides failed to reach a settlement after several parleys, Hathway decided to offer Star Sports channels on reference interconnect offer (RIO) or a la carte.

The matter didn’t end there as the sportscaster filed a case against the MSO in TDSAT, alleging that the latter had put the channels on RIO without issuing proper notice as mandated by regulations.

The sportscaster also alleged that Hathway owed it more than Rs 10 crore (Rs 100 million) in subscription fee dues. However, the MSO contended that Star Sports has inflated the dues.

The tribunal passed an interim order directing Hathway to pay Rs 9 crore (Rs 90 million) to Star Sports. It also asked the MSO to satisfy the tribunal that it had acted in accordance with the regulations and to give clear information to the subscribers that the Star Sports’ channels were available on a la carte basis.

When contacted, a Star Sports spokesperson said that Hathway did not give prior notice before changing the composition of their package. “In our view, Hathway failed in its obligation to give prior and adequate notice to its consumers, before making changes in its package composition and discontinuing exhibition of Star Sports channels,” the spokesperson stated.

“We also received information that Hathway did not protect those subscribers who had subscribed to the packages containing Star Sports channels, within the last six months, nor those who had paid for the same on a yearly basis, thereby breaching its obligations under the relevant regulations.”

Even as the two sides were engaged in a legal battle in the TDSAT, the sportscaster took the battle beyond the precincts of the TDSAT to the media.

Star Sports issued half-page advertisements in several leading dailies in Delhi and Mumbai, exhorting sports fans to call up Hathway call centre to receive the channels or else shift to direct-to-home (DTH) platforms in order to enjoy uninterrupted supply of Star Sports content.

Kumar lashed out at the ads issued by the sportscaster, terming them as misleading. “The ad says that Star Sports channels are not available on Hathway, which is false. The channels are available but on a la carte basis. So if anyone wants to subscribe to Star Sports, they can do so by calling our call centres. They are trying to mislead the consumers through those ads,” he stated.

Defending its decision to issue ads in the newspapers, the Star Sports spokesperson added, “We noticed that several subscribers didn’t even know how to subscribe to our channels and were therefore under the impression that the channels were switched off from our end. We were compelled to issue the advertisement to assist our viewers and clear all misgivings so that consumers could explore their options to avail our sports channels.”