TV18 seized operational control of Viacom18
India’s richest man Mukesh Ambani’s RIL rode the telecom, media and technology convergence wave better than most. The billionaire kick-started the year with a bang as he intensified TV18’s stake to 51 per cent by acquiring 1 per cent of Viacom18’s equity from Viacom Inc. for a cash consideration of $20 million. Viacom and Viacom18 also extended their brand and content license agreement by 10 years. That’s not all, RIL also pocketed a small but significant five per cent stake in content powerhouse Eros International.
Consolidation in TV distribution
The Indian market wasn’t exempted from the global merger frenzy. The coming together of two large DTH operators - Dish TV India and Videocon d2h – was finally concluded in 2018, creating the largest DTH service provider in the country with a subscriber base of about 29 million. One of the biggest attractions for Dish TV as the acquirer was Videocon’s significantly higher average revenue per user (ARPU). Significantly, the combined entity’s ARPU was Rs 207 in the second quarter as opposed to Dish TV’s standalone ARPU of Rs 144 pre-merger. The deal also helped Dish TV position itself better when it came to negotiating with broadcasters.
Uday Shankar named Disney APAC boss
A blockbuster deal that came through this year was the $71 billion acquisition of 21st Century Fox assets, including Star India, by Disney. After a long and sustained bidding war with Comcast, the Mouse House got its hands on much of the Murdoch empire. Late in the evening of 13 December came the announcement that Uday Shankar would be taking over as chairman of Star and Disney India and president of the Walt Disney Company Asia Pacific. Under the new structure, has multiple Disney executives reporting into him. Having run circles around Disney in India, Uday now shoulders the responsibility of entertaining more than half the world’s population. More TV disruption guaranteed.
Jio unveiled ominous FTTH plans
From formally launching FTTH service Jio GigaFiber to acquiring majority stakes in two large MSOs to speed up the rollout, the Mukesh Ambani-led Reliance Jio was definitely the centre of attention in 2018. Reliance Industries Ltd (RIL) made an investment of Rs 2,290 crore for 66 per cent stake in Den and Rs 2,940 crore for 51.3 per cent stake in Hathway. It will save RIL the cost of reaching out to customers as well as making the last mile connectivity easier in its ambitious bid of seizing control over India’s wired broadband business. As the Jio juggernaut marked its entry into India’s multi-billion-dollar cable TV and DTH businesses, traditional players eyed the development with a healthy mix of skepticism and optimism.
OTT streaming gathered momentum
When it came to content, OTT platforms captured the zeitgeist of 2018. Premium digital video content was relentlessly rolled out by the likes of Amazon Prime, Netflix, ALT Balaji, Hotstar, Voot and Zee5, keeping the audiences hooked at all times. Naturally, the band of programmers at some of India’s biggest broadcast networks felt the heat as a new wave of content competition hit India. Heads of Hindi GECs pulled out all stops in order to stay ahead of the game and keep their viewers happy. Thankfully for them, the cord-cutting trend, prevalent in several countries, didn’t grab India’s undivided attention. However, the sheer scale and quality of OTT content audiences were exposed to this year should be a cause for worry entertainment channels.
Stalwarts made intriguing moves
It was also a year of full surprises for the Hindi GECs, especially on the leadership front. Top-notch industry executives decided to call it quits including veteran Colors CEO Raj Nayak who dropped the bombshell of his Viacom18 exit after a distinguished seven-year stint with the media and entertainment conglomerate. Another prominent personality Discovery India and South Asia head Karan Bajaj also called it a day. Industry insiders believe the bespectacled Bajaj timed his exit to perfection, stepping aside when it mattered most. Both of them haven’t hinted at what gigs they are likely to take up next. Another heavyweight - Deepak Rajadhyaksha - who was heading Zee TV, turned to Viacom18 with his mantle being handed over to the broadcaster’s English cluster head Aparna Bhosle.
Regional forces staged forward
As far as content consumption was concerned, regional content too made its mark this year. While Hindi language consumption remains the country’s preferred choice, growth was fastidiously led by regional content. Backing this up with some facts, it was reported that the daily tune-ins on TV by the HSM led to 68.4 per cent, whereas in the South market it led to 78.3 per cent. Simultaneously, the advertisement expenditure in FY18, Hindi GECs declined by nine per cent as compared to an increase of 5.4 per cent in on regional channels. This was in line with growing investments made by broadcasting majors in the expansion of their regional offerings.
Television business retained rhythm
Channels continued to be launched in 2018 with almost all networks rolling out new offerings in regional languages - a trend which began over 2016 and 2017. Colors Tamil, Sony Marathi, Star Sports 3, Zee Keralam among others were unfurled for viewers by the major players. What's keeping broadcasters buoyant is the annual expansion in advertising continues unabated at about nine to 10 per cent annually. So, though traditional pay TV is not dead yet and will continue to grow in India as the saturation point is still far from over (BARC India estimates there are about 197 million TV homes in India over 100 million still to be covered), traditional media players have realised OTT and other forms of digital delivery of video --- professional or user-generated --- will continue to grow and put pressures on ARPUs and other numbers as more Indians take to smartphones and devises with broadband infrastructure slowly improving and cost of data plummeting in the short term.
Tariff order turbulence
TRAI’s new tariff regime, proposed first quarter 2017, continued to cast a shadow in 2018 with confusion relating to some aspects (like a 15 per cent cap on discounts to consumers for TV channels) lingering on like an unfinished record playing out discordant notes. While TRAI has sought clarification from the Supreme Court on the discount issue (the next hearing is sometime in January 2019), it has simultaneously cracked the whip on broadcasters and distribution platforms to fall in line with its new tariff regime by end of the present year.
Major overhaul in the offing at ZEEL
Subhash Chandra and family along with its advisors met in Mumbai over the Diwali weekend to undertake a strategic review of its businesses in view of the changing global media landscape. It was decided to undertake a strategic review of Essel's shareholding in ZEEL with a view to maximize value for the business. The proposed transaction to divest up to 50% of Essel's holding to such a strategic partner. Essel appointed Goldman Sachs Securities (India) Ltd. as their investment banker and US and European based LionTree as an international strategic advisor for this exercise. Essel expects the outcome of the strategic review to be concluded by March/April 2019.
