Dish TV sees revenue boost from carriage fees

[icar]

Dish TV India Ltd (DSTV.BO: Quote, Profile, Research), India's top direct-to-home (DTH) satellite operator, expects new revenue of 500 million rupees ($11.7 million) this financial year from charging broadcasters to carry their channels on its service. Dish TV plans to charge carriage fees of 40 million rupees as contracts with broadcasters start coming up for renewal this year, Managing Director Jawahar Goel told Reuters on Wednesday, with the revenue from the charges to triple to 1.5 billion rupees in the fiscal year starting April 2009.
\"It's an ongoing process. We do not want to disturb the relationship with anyone. We will continue to fulfil the obligation and afterwards we can negotiate,\" he said.
Earlier, Dish, majority owned by the Essel Group which controls broadcaster Zee Entertainment Enterprises Ltd (ZEE.BO: Quote, Profile, Research), posted a net loss of 1.15 billion rupees on gross operating revenue of 1.36 billion rupees for the March quarter.
It closed the 2007/08 fiscal year with 2.5 million subscribers. Rival DTH operator Tata Sky had 2 million subscribers in May.
Dish TV's board also approved raising 11.4 billion rupees through a rights issue, which Goel said would be used for marketing and subsidising subscriber start-up costs to increase customer numbers.
Subscriber revenues are growing about 5-7 percent every month, which equated to a doubling of revenues of an annual basis, Goel said. And that growth meant he was not concerned by competitors in DTH satellite television.
\"There is room for everybody ... You can see this category adding 800,000-1 million subscribers every month, so from a 4-5 million environment, you can grow to an 80 million environment in the next five years,\" Goel said
Mobile phone operators Reliance Communications Ltd (RLCM.BO: Quote, Profile, Research) and Bharti Airtel Ltd (BRTI.BO: Quote, Profile, Research) plan to launch DTH services over the next few months.
Dish will increase the channels it offers to 350 channels this year from 185 channels now, with the extra capacity to come after a group firm launches a satellite later in June.
\"The subsidiary of this company has got a licence to launch and operate a satellite. The satellite launch date will be last week of this month,\" Goel said. (Editing by John Mair)


India Dish TV sees revenue boost from carriage fees | Reuters

 

[appus]

that is the reason Indiavision is taken off from DishTV. Poor people didnt have 4 Crores to pay !Now we will see more Good channels missing from DishTV.

 

[saurabh_g]

Highlights:

DISH TV CONSOLIDATED REVENUES OF RS 4161 MILLION, UP BY 116% FROM THE PREVIOUS YEAR
QUATERLY REVENUE OF RS 1364 MILLION UP BY 21% FROM THE PREVIOUS QUARTER
AVERAGE SUBSCRIBER ADDITIONS OF 95,000 PER MONTH DURING Q4
DISHTV BOD APPROVED CAPITAL RAISING OF A SUM OF Rs. 11400 MILLION THROUGH THE RIGHTS ISSUE

4Q FY2008 - Highlights
v 285,000 new subscribers added during Q4 and 1.04 Million in FY 2008
v Gross subscriber base stands at 3.0 million as on March 31, 2008
v Net Subscriber base stands at 2.5 million as on March 31, 2008
v Overall Pay Gross DTH market Share of Dish TV stands at 59% in 3 market operator scenario
v Significantly improved Brand Health Scores due to new marketing campaign
v Expansion of front end service network to 90 towns
v More content - With 185 channels, Dish TV offers the maximum number of channels in comparison to any other DTH service provider
v Distribution strengthened – Now present in over 4,500 towns through 38,000 dealers and over 575 Distributors
v Bandwidth charges from Broadcasters will be one of the new Revenue stream in 2008-09
v Gaming will also became a paid service in the current year
v Key ARPU drivers will be higher Channels offerings, launch of niche channel bouquets, VAS being charged from the subscribers and all promotion to be on higher tier package
v Lower License Fee from 10% of GR to 6% of GR as recommended by TRAI will result in higher financial performance in 2008-09
v Expansion of Dish Care Centre, service franchisee, Dish Shoppe and Collection Agency will receive lot of attention and focus in this year
» Dish TV - India's first DTH entertainment...

 

[icar]

Excerpts from CNBC-TV18’s exclusive interview with Shubham Majumdar:
Q: Do you agree with the market’s concerns that if we go through a rough economic patch, sources of advertising revenue might dry up for many of the media companies is that a legitimate concern?

A: A lot of investors are concerned at this point especially with the growth slowdown, GDP, economic activity and inflation heading upwards. We have tried to put our minds on this issue and we believe that advertising intensity and the economy is not going to go down. We have a very strong secular uptrend in advertising revenues that we are seeing in the industry and this is really being bolstered by new sectors like telecom, financials, insurance, real estate, education, travel and tourism and so on and so forth. They are starting to come up with big advertisers on television and print going forward. If you just look back two-three years, these sectors didn’t exist and that’s the new sources of advertising revenues that you are seeing coming up.

We continue to believe that we will have a 20% to 22% of advertising revenue growth especially for television in the calendar year 2008 based on our conversations with large media buyers and advertisers.

Q: So you are saying that these concerns are overdone and the market might have punished some of these stocks disproportionately highly?

A: There are two clear trends emerging. One is the traditional heavy-duty advertisers which were FMCG, soft drink companies, automobile companies so on and so forth clearly cutting down on their ad spends. Some of their financials will tell you that they are showing a flat YoY advertising or marketing growth forecasts going forward. But, what is making up for the shortfall in revenue streams from these companies is the new crop of companies that are actually emerging. If you also look at the PIE, it is growing very strongly this year, strongly in the general entertainment channels segment, which are heavy duty advertising platforms.

You have seen 9x, NDTV Imagine come on in this year and you are going to see the Turner Miditech entertainment channel coming in, also the TV18 Viacom Colors Channel is coming in this year. This compares with only kids or news channels, which were being launched in 2007 calendar. The addition of new channel platforms is also going to grow the market as blockbuster properties like IPL has done extremely well. This leads us to believe that the economic slowdown and the inflationary concerns are not likely to hit the advertising revenues in a big way in this year and in the coming years.

Q: What about something like a Zee, which has long been the bell-weather of the industry, it’s had a very bad performance in the last few months, only pull back in the last one-week or so. How do you rate Zee from here on given the kind of news flow you are picking up from the general entertainment space?

A: There are two reasons mainly for the Zee pullback. One is obviously the macro concerns, which have brought down the markets and concerns on ad-revenue growth slowing down. The other is fairly specific to Zee, which is the entry of NDTV Imagine, 9x and the impending launches of two more entertainment channels in the course of calendar 2008. The competitive intensity in the business is clearly on the rise but we have tried to do some work on this and what we can see clearly is the fact that the number one- Star and the number two- Zee are poised fairly high in terms of viewer ship and advertising revenue share that they are garnering.

There is a major churn in the deck of Number three to Number six players, where the market is constantly evolving and churning between Sony Entertainment Television which has historically been number three and you have the new challengers which is NDTV imagine and 9x. So, every single week or month, one is displacing the other depending on what kind of shows and promotional budgets they are putting on air.

There will be a huge amount of churn in the number three to number six spaces and there is a lot of action happening there. But the numbers 3,4,5,6 are way below in terms of viewer ship relative to where Star or Zee is now. Unless the number one and number two do something seriously wrong in the coming years, they should be able to maintain their viewer ship and advertising revenue share. There is going to be an upward pressure on content budgets and a pressure to put on higher quality and richer programming at the end of Star and Zee.

Q: So would you buy Zee at Rs 240 or is it expensive?

A: We have got an outperform rating on the stock at Rs 260 worth of a target price and we do clearly believe in our outperform rating. One of the big drags on Zee, which had pulled down the stock, was the management’s decision to launch the flanking youth-focused channel, Zee Next. It is a clear huge drag on the overall profitability of Zee and this is a property, which needs funding and budgets to be pumped in the next three-four years before it breaks even.

Clearly with Zee Next hived off into a separate entity, this drag will likely go away from Zee entertainment. The management is yet to come out very clearly on the exact corporate structure. We need to see that to figure out whether Zee Next’s cost are going to show up in Zee on a constituted basis or not. If it does, go out from Zee entertainment and there will be a Rs 1.2 billion to Rs 1.5 billion EBIDTA uplift in Zee Entertainment. That will take the EPS up from the current Rs 9.4 a week currently forecasted for Zee in FY09, up to Rs 11 plus for FY09. That’s a big uplift and similar is the case going forward for the next two years as well. So, the Zee Next hives off and the corporate structure will be a key to the stock performance from here on.

Q: On the distribution side, is Dish TV’s numbers for the full year slightly behind or below of what you have expected and would you still stay on with that story?

A: On the distribution side of the business, it’s really getting interesting. Over the next one year you will see a huge amount of uplift in distribution revenue outlook especially on the back of the DTH platforms growing from here and on the back of launches of respective DTH platforms by Reliance and Bharti.

The Dish TV’s subscriber base and revenue growth wasn’t uninspiring. A revenue growth of 115% YoY in FY08 was clearly very strong and beat our estimates marginally on the positive side. The disappointment was on the cost side especially by selling, distribution and subscriber acquisition costs. Cost management will be the key going forward. But, as far as Zee or the broadcasters are concerned what is clearly heartening is the fact that subscribe acquisition run rate are continuously accelerating. The topline growth of DTH broadcasters is on the rise, strongly at 100% plus YoY. Given that, broadcasters revenue shares are linked to DTH companies owned revenues or top-lines. Therefore, we will clearly see a strong follow through from the DTH revenues into broadcaster’s revenues.


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