The Sun Rises on New Era of Digitization

01 Nov,2012



By A Correspondent

Okay, there are the hiccups. The plea to push digitization in Chennai was successful with the Court extending the date to November 5. In Mumbai, the plea was rejected even as local cable operators are gathering in the afternoon to decide on the next course of action. They may even go in for an appeal to the Supreme Court.

What the stakeholder body bosses say:

Man Jit singh

Man Jit Singh, President IBF and CEO, Multi Screen Media

This has been the biggest step in the broadcast industry. Not only is digitization good for broadcasters as it will bring subscription revenues in line but will also enable us to launch new channels, the carriage fees will be lower; but it is also good for consumers. This is the chance for consumers to get different content, it is also a chance for them to get broadband connectivity, which will bring a great information revolution. It is great for MSOs as they will get fair revenues from customers after having invested in the boxes. FDI is allowed too, so the MSOs can look for investments. For LCOs, ARPUs will go up when they offer services like cable modems and broadband connectivity. Government will get more taxes. It is going to be a fantastic phase.

Arvind Sharma

Arvind Sharma, President AAAI and ASCI and chairman and CEO of India subcontinent, Leo Burnett

Digitiation will be a big leap for everybody involved, either as an advertiser, as a businessman, as an agency. So all of the stakeholders are looking at the day with the hope that all will go well.

Roop Sharma

Roop Sharma, President, Cable Operators Federation of India

We all were waiting for digitization. But i have mixed feelings for the day. We have not been able to deliver what we had promised the consumer. There is no transparency, the electronic bill system is not in place, and moreover, the required number of boxes have not been seeded. What can one say? Chennai has extended the deadline. Mumbai will now be moving to Supreme Court for the extension of deadline.

In Kolkata, the opposition is kind-of state-sponsored with Chief Minister Mamata Banerjee objecting to the mandatory digitization and the impact it has on the poorest of poor.

In Delhi, there were some objections raised, but they appeared to have fallen on deaf ears.

The result: mandatory digitization in three metros is here. And at long last there is going to be some order in the broadcast business. One is not very sure whether those who are very elated about the move will be so in future. Because transparency comes with its own set of problems. Especially for those who have been used to the inefficiencies for far too long.

See also:
Shailesh Kapoor/TV Trail: Channel Brand: The Digitization RealityThe Anchor: 5 problems and that you and I will face thanks to digitization


So, who gains and who loses by the digitization:

Consumers: Will they gain? Yes and No. It’s great for those who can afford it, but for the lowest common denominator already burdened with rising salaries and falling incomes, it’s going to pinch.

Broadcasters: Content-makers will now get the money they ought to get as they will know how many people are subscribed to their channel, but no longer will they be able to give the spiel of millions of viewers watching their channel without the relevant proof.  They will save some of the carriage fees paid to Multiple System Operators (MSOs)

MSOs: Monies coming from carriage fees will take a beating, though it won’t vanish entirely as some revenues from placement etc can be made. Their incomes could rise with better reporting from the local cable operators.

LCOs: While quality of content will mean greater number subscriptions to niche channels and hence more commissions, the overall revenues will reduce as the set-top boxes will mean zero unaccounted connections (unless of course there’s pilferage)

Distribution Bouquets: MediaPro with Star and Zee channels in its fold will be the biggest gainer as will be IndiaCast with the Network18 and allied group channels. However, others smaller group but with key channels like, say, Times Now could also flex their muscles.

Advertisers and Media Agencies: They will now have a better idea of the reach and may be able to negotiate harder, but there may be a few hiccups

Hiccups there will be for all. The next few months – possibly till end-December – will see a state of uncertainty for stakeholders. The fight for mandatory digitization may have been won, but the battle has just begun.

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