The government's efforts to digitize cable television in India are paying off with Phase I having gone through satisfactorily. As per Ministry of Information and Broadcasting (MIB), Phase I has seen 100% digitization in Mumbai, 97% digitization in Delhi, 85% digitization in Kolkata and 86% digitization in Chennai as of Oct. 30, 2012.
Digitization will lead to a change in prospects for the media industry. The current structure of the media industry, where majority of the revenues are taken away by the Local Cable Operators (LCO), has led to suppressed profitability levels for other players in the value chain. Under-reporting is to the tune of 80% to 85%, according to Edelweiss Securities.
''With the advent of digitization, under-reporting levels will decrease substantially and prospects will improve meaningfully for players in the value chain - broadcasters and multi-system operators (MSO) who will now get their full share of the revenue pie. This will lead to a quantum jump in the profitability of players, especially broadcasters,'' the stock broker opined.
The biggest beneficiary of digitization will be broadcasters. On one end, their subscription revenues will increase and on the other hand carriage and placement charges will drop. Negligible capex will be involved in the process. On the contrary, MSOs and DTH operators will have to incur capex for financing set-top-boxes and putting up digital infrastructure, it said.
"Content will be the key and it lies in the hands of the broadcasters. No matter what medium the consumer chooses to watch - DTH / Cable / Online / Mobile - what ultimately matters is the content," it concluded.
Source
''With the advent of digitization, under-reporting levels will decrease substantially and prospects will improve meaningfully for players in the value chain - broadcasters and multi-system operators (MSO) who will now get their full share of the revenue pie. This will lead to a quantum jump in the profitability of players, especially broadcasters,'' the stock broker opined.
The biggest beneficiary of digitization will be broadcasters. On one end, their subscription revenues will increase and on the other hand carriage and placement charges will drop. Negligible capex will be involved in the process. On the contrary, MSOs and DTH operators will have to incur capex for financing set-top-boxes and putting up digital infrastructure, it said.
"Content will be the key and it lies in the hands of the broadcasters. No matter what medium the consumer chooses to watch - DTH / Cable / Online / Mobile - what ultimately matters is the content," it concluded.
Source
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