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Freedish and OTT impact: Dish TV renegotiating with broadcasters to reduce content costs
MUMBAI: The rapid growth of Doordarshan’s subscription-free direct-to-home (DTH) platform Freedish and the proliferation of over-the-top (OTT) platforms are a matter of concern for distribution platform operators in India.
Dish TV, India’s leading DTH operator by subscribers, has started renegotiating with broadcasters to bring content costs down. The argument put forward is that broadcasters are offering free to air (FTA) content on Freedish and also on OTT platforms.
Dish TV has, in fact, managed to reduce content costs with one major broadcaster recently. The company has, however, not named the broadcaster.
The exercise will be on to renegotiate with other broadcasters to bring down content cost. Content deals with some of the major broadcast networks like Star India are coming up for renewals.
Dish TV expects its content cost to stay flat in the fiscal. In the quarter ended June, the company’s content cost was in the region of Rs 230-240 crore.
Dish TV feels that the launch of more FTA channels on Freedish will impact pay-TV DTH platforms. Broadcasters can’t expect subscription revenue to grow while targeting huge advertising income growth from the FTA market. The OTT virus is also something to take note of as a lot of content is being shown free.
“These are industry issues which the pay platforms and the broadcasters have to discuss together and resolve,” a senior executive of a DTH company said.
Distribution platforms have long feared that the availability of pay content on OTT platforms for free will sooner or later start eating into the pay TV market. The reduction in data prices due to the entry of Reliance Jio has only exacerbated those fears.
Those fears are not unfounded as OTT platforms like Hotstar, OZEE and Voot are seeing massive consumption. Then there is Jio TV, which is offering more than 450 TV channels for free to its subscribers.
“Taking into account content presence on OTT platforms, Dish TV has started renegotiating for its content costs and is glad to have achieved success in reducing costs with one of the large broadcasters recently,” Dish TV said in a statement announcing the Q1 results.
The increasing number of private FTA channels on the government-owned free DTH platform have been a matter of concern among pay TV distributors.
Another major concern for the pay TV industry is Doordarshan’s Freedish, which is growing at a breakneck speed due to the increase in the number of FTA channels.
Dish TV said that the distribution industry has been demanding from private broadcasters a clear segregation of content between that provided to pay platforms and that aired on the free DTH platform.
At the same time, there has been an increasing realisation among pay broadcasters about the potential opportunity costs associated with airing fresh content on the free platform.
“Going forward, this should ensure material difference in the quality of content available on the pay TV distribution platforms as against that available on the free DTH platform,” the DTH operator stated.
Dish TV further stated that Prasar Bharati’s stated intention to convert the free DTH platform into an MPEG-4 and encrypted platform would also naturally slow down its customer acquisition pace due to the requirement of a conditional access (CAS) box as against the currently freely available, non-CAS, white-labelled boxes.