MxM Mondays: Are stakeholders ready for Phase 2 of Digitization?

07 Jan,2013

 

By Ananya Saha

 

Even as the first phase of digitization has been lauded as a success, two (Kolkata and Chennai) of of the four metros (Delhi, Mumbai, Kolkata and Chennai) are yet to achieve 100 percent digitization. As per the notification, 38 cities with a population of more than one million are to be digitized before March 31, 2013. Are the stakeholders prepared? Presenting a cross-section of views (in alphabetical order of their last names):

 

Phase II: 38 Cities that need to
be digitized by March 31, 2013
1. Bangalore
2. Hyderabad
3. Ahmedabad
4. Pune
5. Surat
6. Kanpur
7. Jaipur
8. Lucknow
9. Nagpur
10. Patna
11. Indore
12. Bhopal
13. Thane
14. Ludhiana
15. Agra
16. Pimpri Chinchwad
17. Nashik
18. Vadodara
19. Faridabad
20. Ghaziabad
21. Rajkot
22. Meerut
23. Kalyan-Dombivli
24. Varanasi
25. Amritsar
26. Navi Mumbai
27. Aurangabad
28. Solapur
29. Allahabad
30. Jabalpur
31. Srinagar
32. Vizag
33. Ranchi
34. Howrah
35. Chandigarh
36. Coimbatore
37. Mysore
38. Jodhpur

 

Anand Chakravarthy, EVP- Marketing and Business Head – BIG CBS Networks

Kolkata was slow but it is almost there now. Chennai has had its issues. Delhi and Mumbai, which are bigger markets and have far bigger number of households, have been able to get there. As a broadcaster, and as a third-party observer, enough time has been given to everybody in the distribution space to get their planning together. The date 31 March was proposed two-and-a-half-year back. I think that is enough time for distributor to get their act together, and to recognize opportunity not just for broadcaster and advertisers but as an opportunity for themselves. I think the big MSOs have seen the opportunity and they have done what was required in Mumbai and Delhi. In all the markets in Phase 2, you have real distribution players. Our sense of ground is that most of the distribution players are clearing by starting to export STBs three-to-four months back itself. I believe that in key markets like UP, MP, Gujarat, Punjab, digitization will happen as scheduled may be a couple of days up and down possibly. The ground realities are always going to change closer to the date. My assumption is that it will close between March 31 and April 30.

 

Phase I of digitization has been a great enabler for our channel, especially the English channels in the four metros. Both Love and Prime have grown significantly. With the HSM markets getting digitized, we realize that numbers will grow given that there is a large number of audience out there. Digitization removes the distribution advantage that large bouquet channels have. In terms of reach, any advantage that your competitor has will get nullified due to digitization. And that will help in greater viewership and reach for few channels like ours. As we get to reach more markets, share will automatically improve.

 

In accordance to DAS regulation, all broadcasters have made certain business plans keeping in mind that digitization will happen by a certain date. If by chance, there is fairly long delay in implementation, it will impact all broadcasters’ plans. All PnL’s made in accordance to this deadline will get completely changed. It is important that the time frame is adhered to and any delays are reduced as possible. Not only broadcasters, it will impact MSOs who will get higher revenues from LCOs since every subscriber will count. For advertiser, our channels do not only imply ‘reach in top eight metros’ since we will be available across country. Thus, advertisers get a larger footprint.

 

If the deadline is adhered to, it will be a game-changer for everyone in the industry.

 

Anuj Gandhi, Group CEO, IndiaCast

As broadcasters, we are ready for Phase 2 of digitization. If you see, DAS Phase 1, it was in November that most of communication and other work got done. This time, getting the agreement between stakeholders, which was a challenge in Phase 1, is not there. Broadcaster- MSO deals have been set for Phase I, so the same has to be duplicated for Phase 2. Similarly, there has been precedence when it comes to announcing the packages. It is much easier, thus, play in that sense. The bulk of consumer awareness happens mostly in the last 60 days or so. As far as communication is concerned, IBF has written to all broadcasters. Some of the news channels are running the scrolls in these 38 cities. So, the awareness is already on.

 

The challenges might be on the financial and hardware side for the MSO.

 

Ashok Mansukhani, President, MSO Alliance

Yes, the deadline is achievable. There is a great consumer demand, and there is a great desire to catch up with the metros. The only question is the availability of STBs, which has to be organized in terms of funding, infrastructure and customs permissions. Otherwise the target is definitely achievable. Most of the MSOs have already submitted their plans to the government and have taken the necessary funding from their promoters or shareholders.

 

Roop Sharma, President, Cable Operators Federation of India

The addressability issues of Phase I are yet to be solved. Phase I has been a failure, how do you expect Phase 2 to succeed? Digitization is not only about installing STBs, it is about digitizing the processes as well and it is has not happened. As we move towards, Phase 2 deadline, the LCOs are not being invited to the meetings. The government is protecting the interests of private players. Why is the government not revealing the taxes collected through digitization in the metros?

 

Uday K Varma, Secretary, Ministry of Information and Broadcasting

I think it is well on track. The beauty of digitization is that it is market-friendly. We have got the basic data. We are holding regular meetings with the stakeholders. We are reconstituting the taskforce, which will oversee the whole thing. We are quite sure that we will be able to meet the phase 2 deadline. I am satisfied with the progress. There are many cities and towns in phase 2 of which 70-80 percent is already digitized. This is quite a large number where digitization has taken place already. It is not a step that has to begin afresh.

 

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