MRP Presentation - Distribution 16 th July 2013 Industry Overview - - PowerPoint PPT Presentation

MRP Presentation - Distribution

16th July 2013

Industry Overview

Industry Overview - Digitization

– STB Penetration » DAS I – 95%

• Chennai still analog

» DAS II – 80%

• Coimbatore, AP still analog

– Concerns » MSO back-end / infrastructure still not ready » No packaging / addressability for consumers. » 40% CAFs still not received from susbcribers. » Hence, no subscriber reports to broadcasters. » MSO’s business model with LCOs continue to be same. » No increase in ARPUs on ground. » Unavailability of institutional finance to MSOs. » MSO Alliance – Big cartel

Digitization Update - Broadcasters

DAS II – Industry Average

• Subscription fee – increase of 10% - 15%.
• Carriage fee – reduction of 10% - 15%.
• Low ARPU’s and poor back-end infrastructure of MSO’s has resulted in fixed fee

deals rather than CPS for all broadcasters

 MSO alliance acting tough & negotiations taking far longer time compared to

previous renewals.

 Digicable completely lost the market share due to lack of funds, big loss to all

b’casters.

 Huge benefit for small / niche channels – PIX, AXN, MIX, ANIMAX in terms of all

across availability.

 Cash crunch – collection outstanding pilling up.  I&B / TRAI planning to target aggregators with strict regulations.

Industry Overview - DTH

• Digitisation - Huge opportunity assumed but no real gain actually.
• DTH not competitive enough against MSO offerings
• Huge hardware cost differential with MSOs (฀ 1,500 Vs ฀ 500)
• DTH content offering costlier against that of MSOs.
• 15%-20% Churn
• Bandwidth continues to be a constraint for platforms. New channel

launch almost impossible.

• Reliance Big TV- De-growing platform, likely sell out to SUN Direct.
• T Sky to incur ฀ 1000 Cr to swap MPEG4 hardware.

MSMD Update

MSMD Update

• DAS II
• 15% - 20% growth in subscription revenue
• 15% - 20% reduction in placement fee.
• Deals concluded with preferred LCNs for most of our channels.
• Analog
• 10% growth on Non DAS base.
• Dedicated work force on ground for LC1 markets.
• 70% of renewals completed.
• TIMES Channels
• Strong resistance from MSO alliance

MSMD Budget - FY 14

• Achieving this year’s budget - A big challenge.
• Most of the assumptions not coming through -
• Smooth roll out of DAS –
• 30% increase in subscription ?
• 30% reduction in carriage ?
• IPL exclusive on SIX
• Survival of Digicable & Reliance DTH ?
• Tough call / deactivations for DAS I renewals – A must for desired revenue
• bjectives
• Managing growth and payouts from State owned networks in Punjab and Tamil

Nadu – Big challenge

• Manage the carriage/placement of channels within limited budgets – Big

challenge

MRP FY 14-18

Year-wise Subscription

(INR Crores)

Including all channels of MSM (incl SPENI)

163 200 191 208 210 255 340 447 533 684 847

100 200 300 400 500 600 700 800 900

02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13

REVENUE TREND - MSM

REVENUE 23%

• 5%

9% 1% 21% 33% 31% 20% 28% 24%

210 255 340 447 533 684 847 940 1033 1189 1401 1661 200 400 600 800 1000 1200 1400 1600 1800 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18

PROJECTED REVENUE TREND – MSM Upto FY 18

RVENUE

Assumptions

• Market / Ground will stabilise in the next 15-20 months.
• Complete digitization with addressability by FY 16.
• Carriage fee to come down in phased manner.
• ARPUs to grow for Cable as well as DTH.
• MSM channels to be in top 3 in respective genres.
• IPL exclusively on SIX.

Strategy

• Move from fixed fee deals to CPS deals for some MSOs
• Aggressive stands – May have to compromise on the

placements of channels

• Strengthening of SIX content – New acquisitions ICC,

WWE etc.

• We will have to start evaluating stakes on ground –

MSO / DTH. Both STAR & ZEE have huge advantage.

• Aggressive marketing.
• Keep the TEAM motivated.