We are in the middle of evolution of the television industry: PIX's Sunder Aaron

With the new rules for digitization of the television industry being recently announced by the Telecom Regulatory Authority of India (TRAI), there is a lot of buzz both within and outside the industry. While on the supply side people are concerned in the way this will affect their revenues and growth; on the demand side, consumers are thinking in terms of variety of channel offerings and their pricing. So obviously it’s a mix of feel good and concerns. To know what lies ahead for the various groups, Adgully spoke to Sunder Aaron, Business Head, Sony Pix on various aspects. Following is the interview.

Adgully (AG): With the slow but gradual phase out of cablewallas happening (compulsory set-to boxes in four metros from July1) how do you feel this development will benefit all concerned?

Sunder Aaron (SA): Absolutely, everytime there is an initiative in any market, it is always there to benefit. I mean it is going to lead to a lot of good for consumers, because they are going to be able to select the channels specifically that they want. It will also widen drastically the quality and variety of the services. This is going to allow other specialised channels to come in. Variety is something that is really missing in the Indian market right now or we have hundreds of channels. We are missing some good premiere channels and niche-interest channels. Digitisation will solve this problem. Consumers will get other services like broadband and even IP telephone services will be available to consumers, all at very reasonable prices. Again, it is really in the consumer hands; they can control what they decide to subscribe to. So, pricing-wise, cost-wise; it should work out that you get exactly the way you want.

AG: How will it help TV ratings measurement and advertisers?

SA: Yes, I think so. Digitisation will mean more transparency. Measurement is really up to TAM. It has nothing to do with other technology or the cable operator system to be honest with you. In general you will get a more transparent system and so it can only help. Well, it will give them an opportunity for advertising as well through different channels. Variety of media is always good for advertisers. They can be very focused or targeted about who they are addressing. I am sure that is going to excite a lot of advertisers. You have a lot of interesting services and new channels that will speak to a very specific audience and that targeted viewership is highly attractive to a lot of advertisers.

AG: Are you satisfied with the new TRAI tariff structure and rules for digital cable TV? Is it a win-win for all the parties? How?

SA: Ofcourse as a broadcaster we have a bias towards the sharing ratios you know which should be a little light. It should be a little bit favourable to the operators. But generally, I think it is a good step forward in a lot of ways. I wish there was a little bit more forbearance when it comes to pricing for our channels ; but I think what they have done with the selling of the basic tier is good. I know that they are trying to control cable.I wish they would have obviously eradicated carriage fees. So it is a bit of troubling but atleast they are trying to probe up. I think there is going to be benefits for everybody. As I mentioned, it is great for consumers, it is great for operators because it will allow them to offer lot more services, lot more products and many more ways to make money to be honest with you. And it is good for broadcasters it finally adds transparency and hopefully will give a fair share of the revenues going forward. Hopefully, this will help.

AG: Do you think the government is doing enough? Is it in line with what is prevalent in the developed countries, mainly USA?

SA: That is a good question. I think the government is doing a lot but definitely there is more that can be done. If you go to any café, you see that there are pirated signals. Clearly, the authorities have not shut these down. And that is a concern because obviously with July 1st looming, the question is how fast and how stringent will the authorities be about enforcement. So, that is important and I hope they stick to that. Also, I think the government missed an opportunity to create tax concessions for operators who wanted to purchase set top boxes from abroad . I think that would have been good or the government could have somehow made it easier for manufactures here to create setup boxes.

AG: Beyond the four metros, how do you see the scenario panning out? What more needs to be done ?

SA: I expect there will be a lot of action on July 1st.It is possible there may be a little bit of a delay after that; you never know. If that happens then obviously across the country there will also be a delay. But you know it really depends on the appetite of the enforcement agencies to ensure implementation. If the non-digital systems are forced to shut down, then I think that will work well for the rest of the row and over the three years.

AG: Some of the broadcasters are not happy and are planning to move court. Your comment?

SA: Are you talking about news broadcasters? I am glad that somebody is bringing that up because carriage fees should be sort of acceptable. That is fine. Let us see what happens. At the end of the day the good thing that the government did is that they are trying to control that.

AG: Your comment on the issue of carriage fees which the MSO’s are not happy about.

SA: They get so much of money out of broadcasters. I am surprised that they have complained but naturally, no matter what happens they were going to have to complain because it kind of requires a lot more transparency and the fact that they cannot just establish carriage fees. The whole thing of carriage fees really hinders the development of television.

AG: Personal comments on the issue.

SA: I won’t call it a fiasco. We are in the middle of evolution of the television industry. This is a very profound step because television is so popular here; more popular than films. It is the greatest form of entertainment for India. This is not a transparent industry and yet there is so much money and now we are trying to make it more transparent. But the bottom-line is that digitization will lead to far better services for consumers, ultimately operators will be able to make a lot more money monetizing their systems and alternately programmers will get a fair stake; so I think it is good for all parties involved.

As I said, everybody does not get exactly what they want. The operators know that their regime of carriage fees is going to at the very least be reduced by a significant amount so they are not happy. The local cable operators are concerned about the money and the hold that they had on markets. Broadcasters are eager to get as much as they can considering the many years of not getting a fair share. They wanted to be much more transparent.

I think the government will be very careful and make sure the consumer will get a fair share. In India, by far we have the most average cost of cable television every month than any other country we would want to compare ourselves to. The incredibly low cost of cable television and the incredibly great value that Indian consumers are getting will hold. If anything it is going to become better because new interesting services; not just television channels will be made available and widely available to consumers. So, digitization is good on that.