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IndiaCast and Disney to end their distribution deal

MUMBAI: IndiaCast Media Distribution and Disney India are ending their distribution arrangement, signalling that the television distribution business is in for further overhauls.

Disney, which had appointed IndiaCast as the agent for distributing its channels in India, will handle it internally.

“IndiaCast and Disney India are dissolving their distribution arrangement. Disney will distribute its channels internally. An independent affiliate sales team is being put in place,” a source familiar with the development said.

Disney has already started sending feelers to the cable TV operators. “Disney India officials informed us that they would be taking care of distribution directly,” several cable operators told TelevisionPost.com.

Though IndiaCast and Disney have a distribution deal running through March 2016, a source said that it would end prematurely. The source, however, could not pin a definite date when the two companies would separate. “It could be soon,” he said.

IndiaCast and Disney executives were not available for comment.

Disney India runs a clutch of kids, youth and movie channels. The bouquet includes Disney Channel, Disney Junior, Disney XD, Hungama TV, Bindass, Bindass Play, UTV Movies and UTV Action.

After Disney’s exit, IndiaCast Media, a JV between TV18 and Viacom18, will have a wide spectrum of channels from its parent companies to distribute. While TV18 Broadcast owns and operates 17 news channels such as CNBC-TV18, CNBC Awaaz, CNN-IBN and IBN7, the Viacom18 channels include Colors, MTV, Comedy Central, Sonic, Nick and Vh1 among others.

IndiaCast and Disney UTV first started with a 74:26 JV, with IndiaCast as the majority partner. But with the Telecom Regulatory Authority of India (TRAI) not allowing content aggregators to bundle channels from more than one broadcaster, the IndiaCast-Disney JV got dismantled last year. However, IndiaCast continued to distribute Disney’s channels in India as an agent.

After a series of burning of JV relationships in the television distribution space, the IndiaCast and Disney separation signifies that the churn has not halted. The next layer, formed after the JV collapses, is also beginning to crumble.

Since TRAI came out with content aggregator regulation that outlawed the bundling of TV channels across broadcast companies, no distribution JVs have survived. The first to tumble was MediaPro, a 50:50 JV between Zee Turner and Star DEN. Zee and Turner called off their 74:26 JV and so did Multi Screen Media (MSM) and Discovery Communications.

News broadcasters such as NDTV, Times Network and Media Content &Communication Services (now ABP News Network) split from their content aggregators and set up their own distribution wings. Neo Sports Broadcast also broke away from MSM Discovery.

However, a few survivors are still following the distributor-agent model. Turner is the biggest broadcast network that has got Taj Television, a wholly owned subsidiary of Zee Entertainment Enterprises Ltd (ZEEL), to distribute its channels.

“Disney and Turner continued to be attached to their partners for distribution, even after their JVs evaporated. But even this structure is coming under threat, as is being demonstrated in the case of IndiaCast-Disney,” a senior distribution executive of a broadcasting company said.

Being a smaller network, Disney India had entered into a distribution deal with IndiaCast. Going on its own will be challenging, but the ecosystem is changing fast and leaving open very few choices.

The television distribution landscape is set for further changes with big broadcast networks planning to offer their channels to multi-system operators (MSOs) only on a la carte (popularly known as RIO) basis. Star India has already taken the RIO (reference interconnect offer) route and ZEEL has indicated that it is exploring such options. If ZEEL takes this ‘bold’ step, IndiaCast is expected to follow suit.

In case bigger broadcasters move to the RIO model for distribution of their channels on cable TV networks, the industry will go through a tumultuous period of chaos, change and turmoil. Perhaps, broadcasters feel that it is the only way the cable TV sector can move to consumer packaging and a healthy pay TV economy take shape.

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