Monday, August 1, 2011

It’s a distributor’s game! The world over!!

Working in the Indian television Industry (which is one of the fastest growing media businesses the world over) I have been privy 1st hand to some amazing rummage within the business.
The ITI (Indian Television Industry) has grown from one C&S channel in 1999 to 750 odd C&S Channels & as we stand today on the cusp of new technologies like HD & 3D it has indeed been a long journey where the roads have been travelled hastily.

As people within, undertaking this journey looking back & operating today, one thing stands out starkly.
The role of DISTRIBUTION in this mix!

For years distributors have held broadcasters by their b@lls on issues related to subscription & revenue. In fact there was a time in past when under-subscription from cable operators was almost a given surety. Fed up of being treated this way the broadcaster approached the GOI who introduced CAS & set-top boxes.

Enter the Direct to Home (DTH) business model.

The DTH model was introduced to bring more accountability & transparency on the consumer side of things, so that broadcasters could track all the homes to which their signals beamed to & have an equal slice of the revenue. While DTH has largely address this problem, the below-the-table might of DTH players has once again raised its ugly head.

The scene now is that there is limited transponder capacity. For those who are not in the mix, let me explain!
The DTH boys need capacity to beam channels. The more satellite capacity they have, the more capable they are to carry more no. of channels & that gives them tremendous leverage over competition!
Now, other than DISH TV (the ZEE TV led business) none of the players have enough/ sufficient satellite capacity! So in turn (& get this!) they charge the broadcasters to be present & beam to viewers houses! So now, we’re back to square one, with no apparent benefit derived from migrating to a more transparent model.
It’s in some ways ironical to note that we are not alone in this problem!

Recently Al Jazeera English started on cable in NYC! However, six months after widespread protests erupted in the Middle East, (which they covered beautifully) the Qatar-based Al Jazeera has not gained distribution on any major cable or satellite systems in the United States. The channel’s supporters say they feel it has been blacklisted; the distributors say they have to contend with limited channel space.

Al Jazeera English was lauded by the United States government and even by a few competitors for its broadcasts from Egypt and other Middle Eastern countries earlier this year. But it is finding out that cable and satellite distributors like Comcast, DirecTV and Dish Network wield an enormous amount of control over the channels that viewers in the United States can and cannot see. “It’s all about leverage in this business, and they don’t have any,” said Paul Maxwell, the head of a cable industry consulting firm.

Al Jazeera does not have a parent company with powerful assets, as the News Corporation did when it used the huge popularity of Fox News to gain channel space for a spinoff, Fox Business, a few years ago. Nor does it have proof that millions are clamoring to watch, as most Americans have not been exposed to the channel.

Reflecting what some distribution executives said on condition of anonymity, Mr. Maxwell suggested that the dearth of evident demand was the main reason for Al Jazeera’s being shut out. Still, he said, “I think it should be carried; there is a public interest reason for it.”
And that is the precise point! There is a public interest! The public is the end user & its voices & demands/ suggestions need to be incorporated.

What we are seeing is a unique situation where the customer is no longer king, where the medium has become more important than the message & most important of all…a situation where the medium is shaping the message, hampering its creativity & stifling it.

This doesn’t sound so good for the business!! But then yet again, TV professionals are known to be a resilient bunch! We’ll find a way out…

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