Interview: Gaurav Gandhi, COO, Indiacast UTV, on the recent standoff with Dish TV

“The issue at hand is very fundamental and we are absolutely clear that we will not waiver from our stand of not paying carriage fee to Dish TV. They have hardly grown in the last two years and they have one of the lowest ARPUs in the business. They now believe the answer to all of their problems is carriage fee!”

BestMediaInfo Bureau | Delhi | January 30, 2014

Gaurav Gandhi

Beginning with the recent standoff between IndiaCast UTV and Dish TV, did any of the two parties really benefit?

The issue at hand is very fundamental and we are absolutely clear that we will not waiver from our stand of not paying carriage fee to Dish TV. While Dish TV has made the changes in packaging, etc., it is very evident from the three weeks of ratings we have got that there has been absolutely no impact on our viewership across channels. It goes to prove a couple of things: one, Dish TV has negligible impact/weightage on ratings as a platform – and that is an even stronger reason that no one should be paying carriage to Dish TV; two, when you have quality content and channels, minor disruptions like this will not impact the business.

On the other hand, it will be interesting to see if there has been any impact on Dish's subscriber acquisition or churn due to this. Our market reports indicate that there has been a significant negative impact on their new customer acquisition.

What really is the issue that led to this standoff?

The real issue is that Dish TV as a platform is plagued by both subscriber growth and ARPU issues. They have hardly grown in the last two years and they have one of the lowest ARPUs in the business. They now believe the answer to all of their problems is carriage fee! But we are clear that we will not be paying carriage to Dish or any other DTH platform.

What long-term impact is the standoff likely to have on the industry?

Dish TV's move of focusing on carriage rather than on subscriber growth and ARPU is extremely regressive and if not checked in time, will surely impact the industry as a whole.

What about the fact that IndiaCast UTV will now have to rely on Dish TV for fair reporting if your channels are available on a la carte basis on the platform?

Dish TV needs to be fair and transparent about retailing and reporting the subscribers. There are options available under law that we will exercise to get our rightful dues.

Is the carriage fee issue something new in the DTH domain considering the huge money being charged from new channels for coming on any specific platform?

There are a few instances where some channels may have paid a few platforms one-time fees for launch (more as a bandwidth support fee). Some free-to-air channels also pay carriage on DTH.

However, pay channels are not paying carriage fee to DTH players on a recurring basis. And no other DTH provider relies on carriage fees as a serious revenue stream – they all focus on content and consumer which is their core business.

You must have faced similar issues while launching 'Rishtey' on various platforms? What platforms is it available on at present and what are the expansion plans of 'Rishtey'?

We haven't faced any issues with the launch of Rishtey! The channel has been successfully launched on DTH and digital cable and it was part of our deals with the platforms. The channel has shown tremendous traction already and in the next few weeks it will climb rapidly.

Reducing carriage fee on cable platforms may be a big relief but is ARPU growing in a manner as you expected or there is still a lot to be done?

ARPU has actually grown of Rs 50-100 at the household level since cable digitisation kicked off. However, the benefit of that is yet to come upstream via the value chain. The MSOs and the LCOs need to get their sharing model in order, consumer billing by MSOs needs to start and packaging needs to kick in for the entire chain to receive benefits of ARPU growth.

In view of TRAI's consultation paper on regulating the roles of content aggregators, what's your reaction on the proposed actions by TRAI?

We have submitted our response to the consultation paper and shared our views on the subject.

We see a constant rise in net income beginning third quarter of FY'13. What are the major factors behind this turnaround?

While I cannot comment on the overall financials of the group, I can safely say that distribution revenues have been growing significantly for us quarter-on-quarter. We have also seen a steep fall in carriage for us since digitisation began. Additionally, our international business is now fairly large and contributing handsomely to the P&L

How long, in your opinion, will it take to reach a stage of actual billing? What figure are you looking at post that?

It is imperative that the situation is sorted soon and gross billing commences. Further delays will not only result in loss for the broadcasters and MSOs but will also erode the confidence among the stake holders for phase 3 & 4.

How is your international distribution business doing and what growth prospects do you see in international business based on the experience so far?

We have had phenomenal growth in our international business. Not only has the business reached serious size and scale in four years – we are now among the top 3, and are the fastest growing – it's in a very healthy and robust state with sizeable distribution, ad-sales and syndication revenues. Our channels and content now reach 125+ countries.

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