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On Snapdeal’s home shopping channel plans: TV vs Web, Carriage Fees

(by Vivek Pai and Nikhil Pahwa) E-commerce service provider Snapdeal has entered into a 50-50 Joint Venture partnership with the cable TV distribution network, Den Networks Ltd. to set up a shopping TV channel. The TV channel will operate as a marketplace for selling unbranded and branded merchandise, services and third-party vouchers, to television home shopping audiences. While further details about the service were unavailable, the channel will presumably be available to all Den network customers. The network currently operates in Delhi, Karnataka, Uttar Pradesh, Gujarat, Rajasthan, Maharashtra, Kerala, Haryana, Jharkhand, West Bengal, MP, Bihar and Uttarakhand and claims to reach an estimated 13 million households. Snapdeal is not the first online retailer wanting to appeal to the TV home shopping audience. In April, Naaptol had announced looking for funds for launching its own 24-hour television shopping channel. The company had said then it expected to close the deal in three months, but no further developments have been reported on this front yet. Previously home shopping TV channel ventures including HomeShop18 and Star CJ had branched out into e-commerce, with Homeshop18 launching its website in January 2011 and mobile apps in 2013 and Star CJ going live with its website in February 2011. Why a joint venture? Perhaps to offset carriage fees. Carriage fees were the money extorted by TV distribution companies to carry channels on their network, for subscribers who are paying for subscription, which has now been legitimised by the Indian telecom regulator TRAI. It is a significant component of…

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