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Breaking News :  ‘We are in talks with other DTH ops and MSOs to join our JV’
Tuesday 07-July-2015, 09:22,
‘We are in talks with other DTH ops and MSOs to join our JV’
Dish TV chief executive officer RC
Venkateish is at it again. He is out to
tame broadcasters and has this time
aligned with Siti Cable Network,
another Essel Group-controlled
distribution platform. Displaying their
combined strength of 20 million digital
subscribers, the two companies will
seek to stitch content deals with
broadcasters that are favourable to
them.
Comnet, the joint venture between
two distribution platform companies,
will aim to snatch the balance of
power away from the bigger broadcast
networks. The JV will welcome other
direct-to-home (DTH) and cable TV
companies as well.
What will be the knock-on effects?
How will the separate business
dynamics of a DTH and a multi-system
operator (MSO) provide a common
ground? Will the muscle power be
effective or just figurative?
In an interview with Sibabrata Das ,
Venkateish explains how content and
carriage deals can tilt in favour of
distribution platforms if they unite.
Q. This is the first time in India that
two distribution platforms are joining
hands to stitch content deals. Is
Comnet going to function like an
agent for distribution platform
operators?
Ours is the content aggregator model,
but on the distribution platform side.
A joint venture company is being
formed with Dish TV and Siti Cable as
equal partners. But it will be like any
other aggregator company, having an
independent team with a separate
CEO, and operate as an agent. While it
will negotiate with the broadcasters
on behalf of the two companies,
ultimately the contracts will be done
individually.
Q. What will Dish TV and Siti Cable aim
to achieve through Comnet?
Our main purpose is to keep content
inflation manageable. We have a
combined strength of 20 million digital
subscribers. We will get better
commercial terms once we sit down to
negotiate with broadcasters.
Consumers stand to benefit if our
content costs are lower.
‘Ours is the content aggregator
model, but on the distribution
platform side. We are not restricting
Comnet to just two distribution
companies from the same group. We
are actively talking to a couple of
distribution platforms to join us. They
are a DTH and a cable company, but I
wouldn’t like to name them. Having a
common entity that is dealing with
over 30 million subscribers can change
the game’
Q. Dish TV has guided to content cost
staying in lower single-digit increase
in FY16. The content deals only come
up next year in September, by when
the company would have reached 15
million subscribers. So is Comnet
formed more to protect Siti Cable as
we near the deadline for Phase III of
digital addressable system (DAS)?
Nothing’s been sorted out in this
business. It is true that we would
have reached 15 million subscribers on
our own by the time our deals with
the bigger broadcast networks like
Star India fall due. But it is better to
be prepared before the renewal time
arrives. If we always look at our own
pond, we won’t be able to grow.
We are from the same group and we
feel that there are synergies that we
can benefit from. But there will be
operational flexibility of each of
these companies so that they benefit
individually.
Q. How much of a game-changer do
you think this move will be?
We are not restricting Comnet to just
two distribution companies from the
same group. We are actively talking to
a couple of distribution platforms to
join us. They are a DTH and a cable
company, but I wouldn’t like to name
them. Having a common entity that is
dealing with over 30 million
subscribers can change the game. It is
a long-term play.
Q. Dish TV was earlier in talks with
Videocon d2h and Airtel Digital TV to
form a joint venture that would seek
to reduce content costs and demand
higher carriage, but nothing came out
of that. What gives you the
confidence that other distribution
platforms outside the Essel Group will
join Comnet?
When we are able to demonstrate that
we can get better deals from
broadcasters, others will join.
‘The market trend is to do CPS deals.
Comnet will negotiate better CPS
rates. This will be shared by all the
platform providers that come under
our roof. Though the business
dynamics of a DTH company is
different from that of an MSO, it
ultimately boils down to negotiations.
With superior subscriber numbers, we
can do better’
Q. DTH and MSOs operate in separate
dynamics. While broadcasters do
longer-term deals with DTH
operators, they normally have annual
contracts with MSOs. How do you build
a common ground?
The market trend is to do cost-per-
subscriber (CPS) deals. We will not do
fixed-fee deals. Comnet will
negotiate better CPS rates. This will
be shared by all the platform providers
that come under our roof. Though the
business dynamics of a DTH company is
different from that of an MSO, it
ultimately boils down to negotiations.
With superior subscriber numbers, we
can do better.
Q. Negotiations purely for content
deals may look theoretically simpler.
But what about carriage deals where
the gulf between the DTH operator
and the MSO is so wide? How does that
work in case of Dish TV and Siti
Cable?
As in the case of content where it is
cost-per-subscriber, carriage could
evolve into a charge-per-subscriber.
We know a wide gap needs to be
bridged there, but we will see how it
goes. We are working out the
modalities and are in the process of
formulating the basic template. We
could be flexible on carriage and work
out a differential charge-per-
subscriber initially. All that is open
right now. We will see how the
negotiations go. But eventually,
carriage should be on similar terms.
Q. When do Dish TV and Siti Cable
start working jointly in dealing with
broadcasters? Since your next round
of renewals start only in September
2016, how is it possible to negotiate
from now?
We can start with the smaller
broadcasters. Even on carriage, our
monetising ability will be better.
When a new channel is in its launch
phase, what we will offer them
immediately is a reach of 20 million
subscribers. Just being with us will
give them immediate visibility, good
reach, and the possibility of getting
better ratings. The bargaining power
will tilt in our favour. The value of
our deal will be more than the sum of
the parts.
‘We can start with the smaller
broadcasters. Even on carriage, our
monetising ability will be better.
When a new channel is in its launch
phase, what we will offer them
immediately is a reach of 20 million
subscribers. Just being with us will
give them immediate visibility, good
reach, and the possibility of getting
better ratings. The bargaining power
will tilt in our favour. The value of
our deal will be more than the sum of
the parts’
Q. What other synergies will open up?
We can use it for sourcing set-top
boxes (STBs) and other equipment. We
can use our joint strength for
bettering advertising rates because of
the enhanced reach we offer. We can
also use it for value-added services.
Q. Wasn’t Dish TV looking at
manufacturing STBs?
Even if we decide to do so, that will
take time. The idea was more to get
our vendors to come here. We would
work with the existing vendors and
provide ancillary support. But the
government has not yet offered any
tax sops to make indigenous STB
manufacturing attractive. We will
have to wait to see how GST works.
Q. Will Comnet help Dish TV and Siti
Cable to expand aggressively in Phase
III and IV of DAS?
When it comes to subscriber additions,
we will be competitors. There is no
synergy line in this part of the
business. We will aggressively try to
pocket our consumers independently
of each other
http://www.televisionpost.com/interview/...in-our-jv/
ANIL G
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[-] The following 1 user says Thank You to anil g for this post:
MJ786
Tuesday 07-July-2015, 12:30,
RE: ‘We are in talks with other DTH ops and MSOs to join our JV’
Good share bro let's who join their JV.
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