DAS (digital addressable system) is here to stay. Despite the shortcomings, the hiccups in the implementation of the first two phases, the government has announced that it will not extend the deadlines of December 31, 2015 for phase III areas and December 31, 2016 for phase IV, when the entire country is expected to be digitised. After complete switchover, cable TV services will be available only through set top boxes in India.
We, at the Indiantelevision.com are starting a new section – ‘The Impact of DAS’ through which thought leaders, experts from the television ecosystem will share their thoughts, ideas, and say their piece on the subject. We are beginning with the impact of DAS on the sports broadcasting ecosystem.
Our expert for the section is Neo Sports EVP programming Mautik Tolia.
Excerpts:
How big an impact has phase I and II digitization made when it comes to subscription revenue?
Digitization has been a big step forward not just in terms of revenue but in providing secular access to viewers to more sports events, apart from just cricket. As India moves more and more to a multi-sport fan universe, digitization will continue to play in important role in increasing the popularity of all sports. Combined with the increasing market share of DTH platforms, which in turn enhances the reach of sports networks without whimsical interruptions (which were a constant feature in the analog domain) we at neo sports see other sports climbing to a 40 per cent share of revenue universe in 3 years time.
From sports broadcaster’s point of view are you happy with the two phases of digitization?
Doubtless there have been roll out issues and delays in implementation but on balance digitization has been a positive. It will be some time before more sophistication is achieved in packages and tiers, which will steadily take us to a CPS billing norm. Transparency in billing remains a challenge but we believe that too will be resolved in the next 2-3 years.
Is the sports broadcasting industry in a subscription positive scenario? Or we are still ad dependent?
From a 90:10 ad: subscription ratio 10 years back, the sports broadcast industry has probably moved to a 70:30 maybe even 65:35 ratio. This may even be 60:40 or 55:45 in the case of some networks. Due to significant ad spend on cricket, especially IPL this ratio will inch its way to maybe 50:50 in 3 years for the industry as a whole.
Are sports like Football, Badminton which are hugely popular but have very little room for advertisement profitable assets for broadcasters?
Aside of Cricket, the dominant sports are football, tennis, golf, hockey, badminton and motor sport. Except for Football and Badmnton, others have adequate ad break potential. At Neo Sports we believe that it is more a question of focus, ability and experience when it comes to monetizing sports other than cricket.
With phase III and IV scheduled do you see a substantial inclination in subscription revenue?
We see further momentum in subscription revenues, reach and secular access for all sports in phase 3 and 4.
How can a non cricket sport or a sport with least ad room turn profitable for broadcasters in India?
The profitability conundrum is more a function of irrational acquisition prices and lack of focus on monetizing all sports. We have seen at least one sports broadcaster recently pay over the top for rights that were being jettisoned by another and for which there may well have been no other takers. Ill informed and panic buying has resulted in lack of profitability for some. At Neo Sports we believe that intense discipline is required both with acquisitions as well as in monetizing assets. Wise spending may not make a sports broadcaster no 1 but there are plenty of sports rights constantly available, the universe of sports fans is rapidly expanding, advertisers are increasingly willing to spend on sports other than cricket and affiliate platforms understand that tens of millions of viewers are tuning into other sports – hence there is room for multiple sports networks and increasing opportunity for revenue and viewership expansion.
