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Breaking News :  Siti Cable and Dish TV join hands to form ‘Comnet’
Thursday 02-July-2015, 08:06,
Siti Cable and Dish TV join hands to form ‘Comnet’
MUMBAI:
Dr
Subhash
Chandra
led
Essel
Group
believes
in
innovation
and
how.
The
two
companies
from
the
group,
multi
system
operator
(MSO)
Siti
Cable
Network
and
direct
to
home
(DTH)
player
Dish
TV
have
formed
a
joint
venture (JV) to deal with the ever
growing content cost. Christened
‘Comnet’, the JV will help synergise
the strengths of both the
organisations in dealing with
broadcasters.
Essel Group has synergies in
broadcast, cable, DTH and over the top
(OTT) services. “When we look at
either of these platforms, the key to
its existence is content. The cost of
content today is increasing rapidly
and at a pace with which even the
connections in the market aren’t
growing,” tells Siti Cable CEO VD
Wadhwa to indiantelevision.com.
According to Wadhwa, while the
consumer average revenue per user
(ARPU) levels is increasing in single
digits, broadcasters, who sign one-
year deals with distribution
platforms, expect the revenues grow
anywhere between 20-60 per cent.
“This is impractical, unsustainable and
is no way any business model will
evolve or work,” he adds.
The reason both Dish TV and Siti Cable
have come together is to be able to
make the best use of each other’s
advantages and disadvantages. While
DTH doesn’t enjoy as much carriage as
cable gets, when it comes to content
deals, DTH platforms have an upper
hand. “While my input cost, which is
the content cost is growing at a fast
pace, I am not being able to drive the
market price. If consumer ARPUs
remain low, we can’t allow the
content cost to go up. Also considering
both the platforms target the same
set of consumers in the market, it
made more sense for us to join hands
to deal with broadcasters,” informs
Wadhwa.
Dish TV CEO RC Venkateish says, “This
move will help both the entities to
provide quality content at affordable
price to consumers.”
Both, the DTH and cable platform
currently is unable to pass on the
increased input cost to the customer.
“And then there are the additional
taxes. The Delhi government recently
increased the entertainment tax from
Rs 20 to Rs 40, not realizing that it is
a price sensitive market. Neither the
consumer nor the broadcaster is ready
to take the burden of the increasing
cost. In order to protect our business
model and remain a consumer friendly
company and comply with all the rules
and regulations, we thought of coming
together,” he says.
The JV will help the duo in not just
controlling deals with broadcasters,
but also in sourcing equipments. “Both
Dish TV and Siti Cable need set top
boxes. There are a lot of synergies if
we work together,” he adds.
Between Siti Cable and Dish TV, the
two currently have more than 2 crore
subscribers, which in the next two
years, according to Wadhwa will go up
to 4 crore. “If we are currently
present in 2 crore households, we are
talking of almost 9-10 per cent of
India’s population. This gives us a lot
of leverage,” he says.
According to Wadhwa, while the
broadcasters have already come
together to work for the advantage
of the broadcasting sector, the
distribution platforms too need to
work in a synergy. “While that is
currently not possible, at least the
two companies in the group should
start working together immediately,”
he opines.
As part of the JV, the duo will hold
joint discussions with broadcasters,
taking joint call on the deals. “If the
broadcaster wants to arm twist Siti
Cable, it has to be careful that Dish
TV may also react or vice versa,” he
informs.
Starting 1 July, 2015, it is ‘Comnet’
that will do the negotiations with
broadcasters for both the platforms
together. Post that, a direct contract
between the broadcaster and the
distribution platform will be signed.
“The benefit will be shared between
Dish TV and Siti Cable,” concludes
Wadhwa.
http://www.indiantelevision.com/cable-tv...net-150702
ANIL G
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