Cable TV carriage fees head south

Carriage fees have been a bane of the Indian television industry. Most broadcasters have been groaning and moaning how they have been choking up their capital, preventing them from investing in content, especially news channels.

Now throwing some light on the trend in carriage fees is five year old television media and distribution audit company Chrome Data Analytics & Media which has just released its Chrome Dii R3 (Distribution Investments Index - Round 3).

Chrome Dii,says the company, has been worked out while tracking deals done by broadcasters over the past year, with information gathered from across various sources including broadcasters as well as distribution platforms. After eliminating high variance deals, an average of six solo deals per cable network were studied for their investments for S band and UHF.

Jeffrey Crasto...

"For the digital scenario, Chrome Dii indicates a benchmark carriage to be available on the basic tier that is channels under BST (mandated FTA channels) along with the first tier of pay channels," says Chrome Data executive director Jeffrey Crasto. "The study is inclusive of both new launches/new deals done in the last one year and existing deals expiring in April/May 2013."

Adds Chrome Data founder & CEO Pankaj Krishna: "Digitisation was expected to be a harbinger of correction leading to nullification of carriage fees. As per TRAI, they had anticipated the Chrome Dii to come down to Rs 1, however though there has been a significant drop; it has not come down to Rs 1.As compared to R2, Dii has come down from Rs 20 to Rs 11.6. "

.. & Pankaj Krishna have attempted to demystify the burden broadcasters have to bear

In its third round, the Dii has revealed that north India has emerged as the costliest region with a whopping 16.7 crore in carriage fees for 100 per cent availability across Basic + S band for new channel launches and 13.3 crorefor renewals of existing deals whereas central India is the lowest with 3.11 crore and 2.73 crore for Basic + S band for new launches and renewing existing deals respectively.

While a different image is revealed if the Dii (cost per contact for the television channels) is studied, Chrome Dii R3 data shows the cost (renewals, S-band) per contact (household) is the highest in west India with an average of 17.6 followed by Central at 14.4. The national average for renewals stands at 11.6.

Out of a total universe of 47 million households in Class I India, 42 million are C&S Homes. Chrome Dii study tracks 31 million homes, 2 million remain uncovered and balance 9 million are DTH!

Source: Chrome Data Analytics & Media

C&S Households	89%	DTH	74%
Non TV Households	11%	Chrome Dii	21%
		Balance	5%

Chrome Data says that its Dii R3 was pre-subscribed by eight leading TV networks. And it is an addition to the other services that it offers (covering1800+ cities and towns) Chrome Track 2.0, Chrome DPi, Chrome Dii & Chrome SES, Chrome AV, Chrome LC1, Chrome NE and Chrome Language Feed.Some 132 channels subscribe to its various services.

Some interesting facts according to Chrome Dii R3 -

Carriage Fee Cost
	Existing		New Launch
REGION	Basic + S BAND	Basic + UHF	Basic + S BAND	Basic + UHF
CENTRAL	273,75,000	194,70,000	311,95,000	235,30,000
EAST	376,65,000	281,25,000	404,65,000	340,00,000
NORTH	1330,33,300	1118,71,800	1673,03,300	1343,67,800
SOUTH	549,50,000	466,67,000	625,65,500	527,32,500
WEST	1099,80,000	1014,80,000	1320,00,000	1195,00,000
Grand Total	3630,03,300	3076,13,800	4335,28,800	3641,30,300

* To cite an example as per the above data, comparing how much a Hindi News channel would spend for 75 per cent HSM availability as per Dii R3 as compared to Dii R2 - it would pay 75% of (Rs 36.30 croe minus Rs 5.49 crore for the south) = Rs. 23.1 crore as per Dii R3, whereas it would have paid Rs 38.2 crore as per Dii R2 - a saving of over 39 per cent! But has the overall pie reduced, not really! As there has been an increase in network bandwidth, hence the number of takers has increased.

North emerged as the costliest region with Rs 16.7 crore for 100 per cent availability across Basic + S Band and Rs 13.4 crore for 100 per cent availability across Basic + UHF for New Launches. Renewals of existing deals for Rs 13.3 crore for Basic + S Band and Rs 11.2 crore for Basic + UHF.

The study also provides a benchmark for carriage fee efficiency with respect to the investment indices that is Chrome Dii that is cost per contact (see tables below). Chrome reveals that the Dii (renewals, S-band, household) is the highest in West India with an average of Rs 17.6 followed by the Central at Rs 14.4. The national average for renewals stands at Rs 11.6.