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Tuesday, April 16, 2013

Broadcasters threaten to snap signals to MSOs

This story first appeared in DNA Money edition on April 5, 2013.

Cable television subscribers may bear the brunt of delays in finalising commercial agreements for Phase II digitisation between broadcasters / aggregators and the multi-system operators (MSOs).

With not much progress happening, some broadcasters may switch off the signals to some MSOs on account of contention over fee amount and piled up dues.

MSOs are large cable operators that distribute channels to local cable operators.

Atul Pande, CEO-sports business, Zee, said that the broadcaster is having issues with Hathway Cable and Datacom Ltd, which is not only refusing to pay them the right fee, but has also not made payments for the last 6-7 months.

"We have no option but to switch off the signal to Hathway or black the screen. Unfortunately, this will lead to a lot of consumer discomfort, but there is no other alternative," said Pande.

As a result, football fans may miss the UEFA Champions League on Hathway network as it faces a blackout of Ten Sports channel, which broadcasts the event. 

Despite repeated attempts, Hathway officials did not offer a comment.
Pritesh Mistry, a football analyst, said, "The sporting event has a huge follower base in India and not being able to watch the matches will be very unfortunate thing to happen for the fans."

While commercial agreements between broadcasters and MSOs for Phase I digitisation are being implemented, doing the same for Phase II, which involves digitisation in 38 cities, is turning out to be a huge challenge.

Gaurav Gandhi, chief operating officer, IndiaCast Media Distribution Pvt Ltd, said the delay in commercial deal making for Phase II digitisation is not because of the broadcasters or aggregators.

"There are a few MSOs who are either unwilling to come to the discussion table or are trying their best to let the status quo continue. This is impacting the implementation of Phase II digitisation," he said.

Industry sources said there have been instances of some MSOs trying to use strong arm tactics to pressurise broadcasters in doing deals on lines of the analog regime deals -- both on subscription and carriage.

The MSOs fraternity, however, feels there is no serious disconnect between broadcasters and MSOs over negotiating the deals.

"This is a time for both parties to work together to create a good ecosystem as opposed to behaving like business partners at war. This is first time wherein there is flexibility in terms of options for the customer to choose from. There is real viewership and price to be discovered," said M G Azhar, COO, DEN Networks.

Follow Ashish K Tiwari on twitter @ashishktiwari

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