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Dish TV In Talks With 2 DTH Operators To Form JV For Carriage Fees

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India’s largest DTH operator DishTV is in talks with two other DTH operators to form a joint venture which will work on content and carriage agreements with broadcasters, DishTV CEO R C Venkateish has told TelevisionPost.

Venkateish said all the three partners will own equal stake in the joint venture, although he declined to disclose the name of the partners with whom they are currently in talks. Citing a source close to the development, the publication says Dish TV is currently in talks with Videocon d2h and Airtel Digital TV, although the CEO’s of both companies haven’t commented on this to DTH.

This essentially looks like a counter measure from DTH operators to combat against channel distribution companies, in a bid to reduce its content costs and demand higher carriage rates from broadcasters, and to us, it appears as if cartelization from the carriage side is being countered by a cartel on the distribution side.

Venkateish claimed they currently receive a “meager carriage revenue” and pay more to the broadcasters as content costs, despite a significant subscriber base. Last month while discussing Dish TV’s quarterly results (pdf), Dish TV managing director Jawahar Goel had also noted that it was about time broadcasters either revisit the favourable terms (including carriage fees) provided to MSOs or else extend the same terms to DTH platforms as well, since they currently generate more than 60% of its subscription revenues from DTH platforms.

As of now, broadcasters have to pay a specific carriage fee to DTH operators to distribute its channels on the respective DTH platforms. However in a bid to reduce this carriage fee, several channels formed distribution joint ventures to negotiate content and carriage fee agreements with DTH operators. For instance, TV18 and Viacom18’s content asset monetization joint venture IndiaCast had formed a joint venture with DisneyUTV group company UGBL earlier this year, to aggregate and distribute 35 TV channels from the TV18, Viacom18, Disney UTV, Eenadu Group and A+E Networks|TV18 to various platforms.

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MSM Discovery or TheOneAlliance, a joint venture between Sony Multi Screen Media & Discovery Communications, had also inked a distribution deal with Times Television Network earlier this year while STAR DEN Media Services (a 50:50 JV between Star India and DEN Networks) had formed a 50:50 JV with Zee Turner Limited to jointly distribute channels in May 2011.

A joint venture between DTH operators will probably provide them more muscle in content and carriage negotiations with broadcasters, which might lead to lower content costs and higher carriage fees.

TRAI regulations: What’s also worth noting is Telecom Regulatory Authority of India (TRAI) is currently working on a regulation against these channel distribution companies and had released a consultation paper in August 2013, which aimed to control the monopolistic distribution of television channels from broadcasters to these operators.

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