Determinación del estado nutricional de los niños

Entity Wish-list Comment

MSOs Incentives and

support from the Government

• Providing infrastructure status to the cable industry will enable easier MSO access to domestic funding critical for successive phases of digitisation.

• Custom duty on set top boxes has been doubled to 10 per cent. MSOs indicate that has been done in order to provide a boost to the indigenous manufacturers.

• MSOs prefer that instead of MSOs subsidising the subscriber for the increase in STB cost, government provide these local manufacturers incentives and subsidies to enable them to be more cost-competitive vis-à-vis imported boxes.

• Reduction in custom duty on digital head-end equipment and STBs will provide a boost to the digitisation initiative.

Rationalise taxes • The DTH industry is subject to multiple taxes. The tax levies on DTH industry includes an average of 10 per cent entertainment tax, 10 per cent in license fees, and an additional 10 per cent customs duty on set-top-boxes.

• Rationalization of taxes is expected to provide a boost to the industry enabling providers to invest in infrastructure development and subscriber acquisition.

Timely access to transponder space

• Timely access to transponder space has been cited as a key concern.

• Allowing DTH operators to buy transponder space in the open market will enable faster access to transponder space and eliminate capacity constraints.

Reduction/

removal of customs duty on set to boxes

• Approximately 95 per cent of customer-end equipment (STB and antennae) are imported.

• DTH providers would also like to see a reduction in custom duty on digital head-end equipment and STBs.

TRAI has completed a decade of media regulation but has a long way to go on creating a level playing field for independent media companies. Content disaggregation is a welcome first step. It needs more powers to enforce its diktats.

- Ashok Mansukhani Whole Time Director, Hinduja Ventures Limited

Though improving ARPU and increasing scale has led to an improvement in economics for most DTH operators, DTH industry has been around for more than 10 years with not a single player making bottom line profits. It is high time government takes care of issues around parity with digital cable and high rate of taxation.

- Rohit Jain Deputy Chief Executive Officer, Videocon DTH

The stage is set: FICCI-KPMG Indian Media and Entertainment Industry Report 2014

© 2014 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Entity Wish-list Comment Broadcasters Delayed

implementation of 12 minute ad cap

• The 12 minute ad cap should be implemented only after subscription revenues from digitisation started accruing.

• The ad cap for genres such as News and Sports has to be different from that of GECs. Also the ad cap for Free-To-Air and Pay channels should be different.

Remove cap on channel prices

• TRAI expects broadcasters to declare the retail prices of their channels and broadcasters are allowed a maximum annual increase in retail pricing, which is linked to the inflation index.

• Also, while increase in retail pricing has been theoretically cleared, the regulator has so far approved such hike only twice so far and the third increment has been pending with the regulator.

Mandate Cost Per Subscriber (CPS)

• In the DAS regime, the government has regulated the revenue share between LCOs and MSOs but not mandated CPS. The government needs to be stricter with MSOs to implement the CPS like DTH operators.

Though the cap on advertising minutes is in theory good for the broadcasting industry in the long term from the perspective of quality control, the cap needs to get implemented only once the benefits of digitization start to come in. Also the cap on advertising minutes has to be different for FTA and pay channels.

- Gulab Makhija Chief Financial Officer, Independent News Service Private Limited (India TV)

Cap on wholesale prices in the digital system and an incomplete implementation of digitization leads to inefficiencies in monetization for broadcasters & platforms. Pricing should be market driven while discounts and bundling should be regulated, to give the power of choice truly to the end consumer. KYC, CAF, a robust Subscriber management system will bring in transparency, fair revenue sharing, and growth of the TV industry.

- Asheesh Chatterjee Chief Financial Officer, Reliance Broadcast Network Limited

MSOs have shown good performance in rollout of STBs. However, there should be a level playing field between Digital Cable & DTH. Going forward, CPS (cost per subscriber) should become the currency for the TV industry as CPS deals are critical for subscription revenues to grow for the broadcasters & Digital Platforms.

- Gurjeev Singh Kapoor Chief Operating Officer, Media Pro Enterprise India Private Limited

© 2014 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reser

Entity Wish-list Comment

MSOs Allow bundling

of channels by aggregators

• Channel aggregators should be allowed to bundle channels of multiple broadcasters together, at least till the benefits of digitisation start flowing to the broadcasters in the form of higher revenue share.

• While there is a‘must provide’clause for broadcasters, there is no ‘must carry’ clause for distribution platform owners.

Improvement in TV viewership measurement

• Stability in TV ratings and a holistic measurement system that allows for tracking the performance of niche channels as well.

• Acceptance of CPT metric instead of the CPRP metric to arrive at advertisement rates is critical since a CPT metric based system better represents the new C&S households added every year.

Issue licenses to new channels

• The MIB should approve new channel launches. There are more than 200⁵⁸ channels pending for approvals at the MIB.

Content producers

Higher investment in content

• As digitisation progresses further, content producers would like see higher investment in content.

• Limited availability of quality personnel across the value chain constrains the ability of the television industry to innovate and create disruptive strategies for rapid growth.

Ownership of IP rights

• Content producers want to own the IP rights of programs so that they can monetise the content better, especially on online platforms and international markets.

• Also owning IP rights would create enough entry barriers, leading to consolidation in a fragmented industry.

47

If TRAI wants to restrict ad inventory, it should also look at other aspects of the broadcaster business model. There is a perception that channel aggregators may now have less power to negotiate for higher subscription revenues and bring down carriage fees. TRAI had earlier promised to intervene if carriage fees were unreasonable, and had once indicated that a reasonable level would be INR0.5 per subscriber per channel per year. In actual fact, carriage fees are ten times that level, and this is an area where TRAI needs to act.

- Vikramaditya Chandra Group CEO & Executive Director, NDTV Limited

Post digitisation and the panel expansion into the LC1 towns the ratings have just not stabilised with major fluctuations seen week after week.

The GEC genre saw a 20 per cent drop in its overall share, the English movie genre saw a huge increase initially and then a sudden drop, Cricket ratings have seen a huge drop over the last one year. With increased coverage the sample size seems to be small leading it to be instable. The industry is waiting for BARC to happen soon as with the panel size of 20,000 meters from the beginning and with a new robust technology we should get more accurate ratings.

- Rohit Gupta President - Network Sales, Licensing & Telephony,

Multi Screen Media Private Limited

TV content production industry is heavily fragmented today. Currently there are no entry barriers. IP rights and access to key talents can create those barriers. If TV production houses wish to retain IP, they may have to share the business risk.

- Indranil Chakraborty Chief Operating Officer, BIG Synergy Media Limited

58. MIB slows down licensing TV channels, Cable Quest, 5 December, 2013

The stage is set: FICCI-KPMG Indian Media and Entertainment Industry Report 2014

© 2014 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The broadcast industry continues to undergo major transformations.

Digitization may mean more avenues to reach and engage the consumer – be it traditional or new media. Notwithstanding, the fundamental economic forecast of Broadcasters worldwide remains one of flat revenues and growing costs. India will be no exception to this, as Broadcasters like enterprises in other sectors have to embrace technology for driving outcomes like greater efficiencies, lower cost of operations and new revenues. With content becoming digital files, one of the default choices of technology for Broadcast industry has been Media Asset Management (MAM) to help store and manage the digital content. MAMs are like what database management was to digitized information two decades ago.

Learning from technology evolution and adoption in other sectors, it is imperative that MAM is only an essential start. Just as the world of enterprise applications came into being helping digital transformations, M&E sector is waiting for a similar technology revolution.

Over the last decade, the Indian Broadcast industry has grown in scale – with new channel launches and enhanced digital distribution. With the increase in the number of channels (GEC and niche genre specific channels alike), the scale of business operations has grown manifold. To get a sense on the scale, national networks like Zee and Star produce between 9,000 to 12,000 hours of fresh content each, every year, which is about 3 to 4 times what the entire film industry in India produces in a year.

Not counting for the production staff, it is estimated that at least 20 to 35 individuals are involved in the orchestration of the various processes for every episode as it finds its way from the Production House to the actual Broadcast play out. This orchestration cannot continue to remain manual in the midst of this scale dovetailed with global expansion (both TV distribution and content syndication) and TV Anywhere initiatives fundamentally driving the need for digital transformation.

Digital Transformation amongst others, have meant bringing together the 35 stakeholders across the digital content supply chain to collaborate on a single technology platform for every episode, every day. This translates in to over a million B2B transactions within Linear TV business for a TV network. This calls for going beyond MAM to managing the orchestration of the various creative business processes.

Just as traditional enterprises embraced enterprise applications like Enterprise Resource Planning (ERP), a new class of applications, deemed Media ERP have become essential to manage content, digitally mediate the various internal and external stakeholders within the content supply chain, and interwork with the other IT systems within M&E organizations. This virtualization holds the key to manage the scale, complexity, speed and efficiency dimensions.

This transformation also calls for combined Media and IT skills within Broadcast networks.

So long as there were physical media in the midst, the industry traditionally has been very slow in adopting MAM solutions citing lack of clarity on the Return on Investment (RoI). With the migration to HD and the digital consumer, MAM adoption became imminent. Leading independent software MAM vendors like Dalet, Avid’s Interplay MAM, Viz Ardome and Cinegy, and traditional system integrators like IBM, Accenture, HCL and Cognizant were engaged in implementing these solutions for M&E companies.

Such implementations called for upfront high capital expenditure and met with little success resulting from the fact that MAM is still not solving key business problems. Prime Focus Technologies (PFT)

launched CLEARTM, a Media ERP platform in 2008, which today runs revenue and time critical content operations for the world’s biggest broadcast networks like Star, Zee, Bloomberg and Disney, and content owners like BCCI and EROS to name a few. CLEAR was built as a Cloud-based platform, and offered to clients on a SaaS (Software as a Service) basis allowing Broadcast Networks to ‘pay as you go’. The other players who have similar Cloud platforms include Tata Communications’ Mosaic and Airtel.

This transformation within the Broadcast industry also brings along fundamental changes to post production industry. The zeal for making better content would also mean better sound and picture quality for productions. Virtualization calls for integrated processes and world class infrastructure within production, translating in to modern digital infrastructure and TV Hubs that need to be created to cater to the demand. PFT created True North, a unique TV hub to realise this vision for the industry.

Digital transformation has also meant Broadcasters building Direct to Consumer platforms. The digital consumer has thrown open new complexities for Broadcasters to deal within the IT and online video domain. Star India’s digital foray in 2012 to woo the sports fan is a good example of a broadcaster embracing data and video in the presentation of a consumer experience. We will see more such endeavors that will redefine the landscape of TV business.

Broadcasting revenues in the US are expected to remain flat over next 5 years while operating costs are expected to rise at a faster pace due to proliferation of screens. Compared to the West where the Broadcast Operations and Engineering (BO&E) spend as a percentage of revenue is 9.3 per cent, Indian broadcast players spend approx. 4.5 per cent today. By proactively endorsing virtualization of content supply chain operations, enterprise digitization and media process outsourcing, India’s broadcast industry can escape the challenges that have bedeviled the US and greatly benefit from enhanced efficiencies, greater organizational agility and sharper focus on the creative product.

The Indian subcontinent with around 150 million TV households, present a lucrative market for broadcasters. And broadcasters in turn require the best of technology innovation to remain competitive as screens multiply epidemically. Globally the market for media ERP solutions and media services is estimated to be about USD10 billion. In India we size the market for broadcast segment alone at roughly INR10 billion and growing steadily.

In order to harness opportunities of the multi-screen revolution, broadcasters require a strategic partner with deep domain-specific insights, utmost flexibility and IT expertise for digitally transforming the business of content. Such a partnership can help them build sustainable businesses in the long term while remaining focused on the core product and core constituent – creative content and the omnipresent consumer across devices, apps and platforms.

Unless otherwise noted, all information included in this column/ article was provided by Ramki Sankaranarayanan. The views and opinions expressed herein are those of the authors and do not necessarily represent the views and opinions of KPMG in India.