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Cellcast’s Channel Plans; Average ARPU Rs 50; Will Seek Funding

Why is Cellcast launching a 24×7 TV interactive TV channel instead of launching more TV shows on other channels? Cellcast CEO Pankaj Thakar, in conversation with MediaNama, said that they have a large portfolio of content which they aren’t able to put on air because of inventory issues. “GEC channels have their own compulsions, and we don’t currently have a show on prime time, which we would like to do.” Cellcast’s 24×7 Channel will have 12-14 hours of live programming, and the rest will be music, repeat shows. Cellcast will also look to do multiplayer gaming through SMS and IVR, Thakar said, and games like interactive Soduko.

Launch Plans

They’re hoping for a launch in the first quarter of the next financial year, but Thakar says, realistically, it could take until Q2. At present, Thakar says, the company’s various properties have a cumulative user base of over 70 million, and adds 10-15 million new users every month. It currently runs 6 unique TV shows and if simulcasts are also taken into consideration the number goes up to 10 with 8 hours of daily programming.

Distribution; Free To Air Initially

The company will seek to distribute the channel across Cable and DTH equally, despite distribution (carriage) costs for DTH and Cable being different. Thakar says that distribution costs would amount to around Rs. 20 to 30 crores. The channel will be free to air initially and depending on the audience base it might be made a pay channel in a couple of years. Cellcast will target the HSM or Hindi speaking markets initially and later focus on regional markets.

Funding Requirements; Financial Performance

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Cellcast will seek more funding, and will look to enter other Asian Markets next year. All of Cellcast Asia Holdings’ revenues are from India – CAH reported revenues of $8.4 million for the 2009-10 fiscal and a profit of $2 million. The year before, the company had reported a loss. What drove this change? Thakar said that in 2008-09, Cellcast was spending on setting up infrastructure for SMS and IVR, and had limited shows on air. With the infrastructure in place, they’ve been able to expand their portfolio.

On PlayWin

Cellcast, in its initial days, used to provide programming for Zee group owned TV channel PlayTV, which shut last year. How will Cellcast’s channel be different? “Our portfolio is diverse,” Thakar said. “We’re doing astrology, matrimony, and have 15 different products going on air. PlayTV had more game shows.” Thakar declined to comment on factors related to why PlayTV didn’t succeed.

ARPU, Monetization & Show Performance

The average ARPU for Cellcast though is Rs 50, according to Thakar. Interestingly, consultancy services based shows like Astrology generate the most ARPU for Cellcast, with people consuming more minutes, and the ARPU for some astrology shows going as high as Rs 70. According to Thakar, people consume more minutes for these services generating better ARPUs. Thakar states that revenues will be mainly generated from participation and is shared with operators: participation currently helps recover airtime expenses. However, Cellcast will explore advertising integration, wherein instead of slots for commercials, entire shows will integrate the advertiser’s message. This integration will also be extended to IVR and SMSs, as SMS tags and quick jingles. Mobile apps for the shows will be branded.

On performance of shows, based on the time slots, Thakar said that astrology and matrimony based services work better in day time slots and game shows, auction and shopping based shows work well either in the evening or late night.

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When quizzed about the percentage of the premium SMS that goes out to the mobile operator and the rise in margins with the rising cost of SMS, Thakar refused to reveal the details. “Well that is something between us and the operator and I can’t tell you that. We have been maintaining a very steady charge of Rs 10 per SMS for the last 5 years so no question of varying margins.”

3G And Sumo.in

Not surprisingly, Cellcast considers 3G to be a catalyst in the growth of interactive television: “Everybody wants to see themselves on television and wants their 1,2,3,4,5 seconds of fame and video calling will enable that. Suppose if you’re using an astrology service you can call in and be there on television and the astrologers can actually see them and even face read. Its more credible and believable to see people real time and boost these services,” says Thakar.

Cellcast used to run a user generated content site called Sumo.in (based on Cellcast UK’s Sumo.tv). Thakar said Sumo was shutdown because of bandwidth problems, and they’ll use Sumo on broadcasts once 3G comes in. “Maybe not in the immediate future but in couple of years we will see that 3G will definitely add value to TV and b2b interactions.”

(with inputs from Nikhil Pahwa)

Related :
Cellcast Plans 24×7 Interactive TV Channel; Cellcast Asia FY10 Profit $2 Million

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