TDSAT Seminar. A MSO Alliance Presentation. Bangalore- Nov Ashok Mansukhani

Transcription

1 TDSAT Seminar Bangalore- Nov-2010 A MSO Alliance Presentation by Ashok Mansukhani

2 Media and Entertainment The India story

3 The Market Pie ( Revenue %) 2010 Value at US $ billion

4 Growth of TV Homes to Continue Steady Growth in TV Homes and Cable Homes Expected in The Next Few Years Source: MPA, 2010 report Into a Huge Market over 165 mn Households

5 Revenues in TV Broadcasting Industry - Present and Potential March 2010

6 The Indian TV Market Today India Has a Large Television Market, Dominated by Cable Millions of Homes Served Great Service at Nominal Cost 144 million TV households 90 million cable TV homes 21 million DTH homes. A Thriving Consumer Driven Market Over 500 TV channels Average payments per household: Ranging from $ 3 to $ 9 Source: Media Partners Asia (MPA),Hong Kong Report 2010-

7 Cable Digitalisation Way Forward.. More Channels High Quality Control in Consumer s Hands More Channels: Capacity to Support Large No. of Channels Niche Channels: Platform for Special Interest, Regional, Local Channels High Quality Broadcasts: DVD Quality Picture & Sound HDTV: Already launched by some Broadcasters 3D TV: Coming soon! Parental Controls: Putting viewers in control of what they want their children to watch High Interactivity: On- Demand Video, Games, Music, Shopping, from the Television Remote Empowering the Indian Consumer With Choice & Quality A More Transparent Business model

8 Estimates for the Indian TV Market in 2014 Cable, DTH, IPTV A Large Market With Cable Having a 2/3rd Market Share Total Households 264 Million TV Households 165 Million IPTV & Terrestrial (10%) DTH Households 44.8 Million (27% of TV Homes) Cable TV Households 103 Million (63% of TV Homes) Growth in Homes DTH 1 million 21 million CABLE 55 million 90 million

9 Cable: A Large Employment Generator Impact of Cable on Employment Early Cable Operators needed staff to grow and support their operations, creating a massive employment boom Over 6 7 lakh people across the country were employed in the initial phase alone, as technicians, collection agents, etc. Today, there are an estimated 60,000 to 70,000 Local Cable Operators (LCOs); 6, Independent Cable Operators; 100 Multi System Operators (MSOs). Several lakhs employed across the country Cable is one of the Biggest Employers for a Small Scale Industry

10 Cable Differentiators... Triple Play Two Way- Totally Interactive Capacity Reliability Service- Response time Fragmentation- Localization

11 Role of MSOs ( Multi System Operators) Multi System Operators came into existence in 1995 as a consolidator and catalyst for providing state of art infrastructure with control rooms for accommodating large number of channels. MSOs provided best quality cables and later optic fibre & equipments to build an information infrastructure highway for communication and information technologies for large Broadcasting Entities, ultimately ensuring better television viewing experience for the subscribers. This assured an easy and one point collection mechanism for Pay TV Broadcasters absolving them of large collection personnel and obviated the need to enter into thousands of interconnection agreements. Backed mainly organized Corporate Entities by investing own funds for creating and then continuously upgrading the infrastructure without any fiscal or tax support from State/Central Governments. Have pioneered provision of digital services by setting up central digital headends and digital feeds thereby continuing to function as the backbone of Cable TV industry.

12 MSO Alliance and its Role The Multi System Operator Alliance (Regd) is an Association representing the organized cable TV distribution sector in India reaching out to millions of viewers all over India Have liaised with the Government and TRAI for equitable level playing field of Regulations keeping consumer interest at forefront For the past 6 years, MSO Alliance has worked closely with the Government and Regulator on various Sectoral issues The Alliance is gratified and honored that many of its suggestions given earlier from time to time to Government and TRAI are under action by the Telecom Regulatory Authority of India (TRAI) and the Ministry of Information & Broadcasting and many of them have been implemented. The Alliance has always backed TRAI and Government in all its efforts to effectively regulate the broadcasting and cable industry in various industry forums and courts.

13 The Need for A Strong Regulatory Framework To Ensure a Vibrant Competitive Industry that Benefits Consumers Accelerate and Support the Process of Digitalisation A Strong Regulatory Environment Will Make the Industry more Robust & Benefit Consumers Creates an Environment for Institutional Funding Maintain a Standard Quality of Service for all Subscribers

14 TRAI s Recent Orders & Recommendations Greater emphasis on network digitization, increased addressability and broadband penetration FDI for Digital National MSOs 74% (DTH,HITS,IPTV also 74% FDI) The registration for cable TV operator to be replaced by a comprehensive and supportive licensing framework Separate licensing frameworks for Cable TV operators (LCOs) and Multi System Operators (MSOs) No ban on new channels under uplinking and downlinking New Digital addressability tariff order, common for all platforms DTH, Digital Cable,IPTV Analogue sunset and complete addressable digitalization by 2013 National Broadband Policy recommendations in process, to be announced soon

15 Content Code & Self Regulation Downlinking and Uplinking Policy of Government 92% are single TV homes in India Parental Control in digital cable homes Pending Broadcast Bill mentions about considering the leveraging of the contents for various viewer segments including adults in the digital addressable system Advertisement code and Programme Code,the acts should be for Broadcasters /Content providers not for delivery platform like Cable Today the cable act makes a penal action and seizure of equipments at Cable head end,instead of penalising the content provider ( no such rule for DTH?!) We have over 500 channels and more to come in,the content code penalty implementation should be for provider,and not for the carrier! Self Regulation guidelines for TV sector has been announced by MIB News Content Regulations, which have been proposed under self regulation, need to be fully and lawfully implemented All contents of GEC should be categorised with viewing age bar,as is done in almost all developed and developing countries

16 Digitalization: Present Revenues of Broadcasters Pay Channels + FTA Channels + Ad Revenue model Subscription Model Combination of both Content Reselling on multiple platforms Other revenue streams SMS and events Ad Revenue model Content Reselling Other Avenues like SMS and events

17 Key Steps for Digitalization and Questions before implementing Sunset Digitalization of over 100 million homes. The backend headend and the up gradation of networks The cost of STBs? Overall digitalization costs? Funding issues for entire digitalisation Do we segment the socio economic class of subscribers (SEC) and plan a complex implementation? Do we create a Government Fund for digitalization? Do we need price ceilings at all for pay channels? Can we shut off analogue All India on a particular day? When can the digital revenue ( subscription) start? What should be the time plan for complete sunset and switch off date?

18 Plan of Sunset Clause for Analogue Cable Option I TRAI recommendations Analogue Cable sunset time frame recommended by TRAI as : 1. Phase I: In four Metros Delhi, Mumbai, Kolkata and Chennai, by 31st March Phase II: In all cities having a population of over one million, by 31st December Phase III: In all other urban areas (municipal corporations/municipalities), by 31st December Phase IV: In the rest of India, by 31st December This means each subscriber of cable of all Socio economic segments have to receive a STB At minimum cost of Rs per STB, the cost for converting 50 million home is Rs. 10,000 crores and for 100 million homes Rs. 20,000 crores for STBs alone There is also a cost for backend digitalization and upgrading the networks. The overall effective cost may be well over 40,000 crores This may lead to utter chaos as subscribers will wait till the last date to convert from analogue to digital,as has been witnessed on Dec.31,2006 Ideally phase wise mechanism with gradual building up of a digital environment, will ensure a more efficient and acceptable digital regime

19 Suggestions for Way Forward Analogue Cable Sunset..

20 Option II Suggested plan Way Forward Digital Addressability Phase wise of city clusters A method where pay channels earn their due: Suggest no price caps for pay channel in digital However, appropriate Price control for FTA bouquet of basic tier Phase I : Pay channels mandatory through STB and FTAs through analogue in year 1 Phase II- FTAs and Pay channels both through STB,with a final sunset date in that particular city within next months

21 Option II - Suggested Way Forward Rationale Free pricing will ensure that revenue flows to all the stake holders in the percentage sharing already laid down This money coming into the system will ensure that the FTA segment can be converted to digital by subsidisng the boxes further in the future. (when sunset for analogue gets in) From year ,sunset clause will be enforced in the same manner as in phase of By 2018,India will be totally digital This process can be voluntarily speeded up, as with subscription revenues increasing, both broadcasters and MSOs will try to ensure that the FTA analogue segment gets converted to digital in quick time, even if they have to give the Boxes free Cities may go in for partial or complete digitalisation earlier than their scheduled dates. Today cable digitalization has practically stopped because of paucity of funds

22 Suggested Way Forward..Rationale - Option II This will ensure viable business plan for the existing FTA Broadcasters and New Entrants due to the availability of choice and spectrum Non-CAS area pricing will become a non issue gradually Legal disputes between Broadcasters and MSOs will reduce the Cable act need not be modified immediately for sunset of analogue Absolute and affordable choice for the consumer DTH/IPTV penetration will improve because they do not have to compete with analogue cable but with Digital Cable and VAS services This will further speed up the digitalization process Notification should be done in one go with a phase-wise plan for various city clusters,as decided by MIB.Till the time Cable act change is notified,the phase I ( of pay channels through STB) can continue The entire notification document of MIB can be immediate

23 Option III TRAI s recommendation over a Longer Duration.. The Phase I can start after all the process issues raised earlier are completed and MIB creates a policy platform Proposed first phase can start from October 2011 and the sunset for the metro cities can be then by September 2012 The 2 nd phase can start from October 2012 and the sunset of analogue can be by December 2013 The next two phases can be considered after the General Elections, which will be likely in 2013 end /beginning 2014,as requirements of code and law and order will be enforced The remaining phases can be post General elections,i.e. from 2014 to 2017 By above time frame,the entire cable will be converted into digital by 2017, which is also Doordarshan deadline for digitalization

24 Thank you