The Mumbai-based satellite TV channel distribution company, Satellite Management Group (SMG), has signed distribution agreements with two European channels, TV5 (in French) and DeutscheWelle TV (in German) for the Indian market. SMG is owned and managed by Sudeep Malhotra and Dinayar Contractor, the duo who bring out cable TV magazine Satellite & Cable TV.

The new distribution agreements are part of a four-channel bouquet which includes Italian sports channel RAI and European Music channel MCM. The four channels have leased a transponder on Asiasat 2 and are being delivered as digitally compressed free-to-air channels.

As part of the initial promotional thrust SMG is giving away 50 digital receivers to cable operators who sign on for TV5. This will be followed by another giveaway of 50 receivers for DeutscheWelle TV. The two channels are being targeted at embassies, hotels, and deals for TV5 have already been signed with operators in Mumbai.

Among those who have agreed to air the channel are: Bi TV, UCN Space Vision, Shri Bhawani Cabletel, and 7-Star. The deals will give the channel a penetration of 750,000 households.

SMG is also on the verge of signing distribution arrangements with another two US channels and is offering cable television consulting to a Kenyan cable TV network. The company is looking at a turnover of over Rs 1 crore from its distribution and consulting activities.

Pay TV lessons

ESPN's run-in with cable operators and the subsequent ejection of the sports channel from their network's channel bouquet has several lessons for programmers. Among them:

Don't take cable operators for granted, they are not going to give in to any programmer's incessant demands. Work instead with them as partners and hear them out patiently, don't come down on them heavily.

Draw up a pricing strategy that doesn't make cable operators feel like they are being overcharged. Rs 3 and Rs 6 may look cheaper than the cost of a soft drink to programmers, but to a cable operator paying makes for nuisance value as he doesn't know whether he will recover it fully. Cable operators are the conduits to viewers and hence can't be circumvented unless programmers are willing to use another delivery mode.. * Don't go pay TV unless you need to. It's early days for pay television in India. Wait for addressability to come in. Discovery is a case in point: it has encrypted but it is not yet pay.

Addressable systems are eventually going to come in. The Hinduja-run InCablenet believes that it can have one running by December 1997. But expect it to take a couple of years for it to be on a roll though the country may end up having 10 pay TV channels by early next year.

Use the period between now and the Broadcast Bill to educate television viewers about the need for subscription television and the role that cable operators have to play in this area. Also inform viewers about the various equipment that are needed for pay television.

InCable gets it right

It's action time at InCablenet. The cable TV network finally seems to be getting its focus right on business. Promotions are on for programming and the network is drawing up entry strategies for another 14 cities. InCablenet has also given up—or is trying to give up -- its old practice of appointing distributors to expand its distribution network. InNetwork COO Ashok Mansukhani points out the company is now taking the joint venture route with cable operators. It is also distributing its cable movie channel CVO through select cable networks in other cities.

InCablenet is going to commence online transmission of Bombay stock exhange quotes, apart from a daily 15-minute new capsule on the city at 9:45 pm called InTime. According InNetwork senior vice president (business development) S.Ravindran the network is working on providing internet access via cable TV and a test project using cable modems has worked out successfully transferring data at 2MB-3MB per second. "We've tested the service and it works over a 10 km radius. We are however waiting for the legalities to get cleared before providing the service to subscribers."The network is also gearing up to provide databases via cable to corporate customers in the Nariman Point area in south Mumbai. Meanwhile, its foe-turned-friend Siticable has taken the affiliate route, appointing cable operators in some cities to further retransmit Siticable channels. Siticable general manager Sunil Khanna says that Siticable now has a presence in 3.2 million homes in 83 cities.

Zee's Q&A

The Zee Telefilms annual report is out and, going by the looks of it, the company apparently hasn't been impacted by the slowdown and cash crunch in the advertising business.

Printed on glossy and expensive art paper the first half of the annual report has a question and answer section in which certain key controversies and issues relating to the network are answered. The section is splayed with photographs of stills of Zee's most popular programmes. To a question relating to the state of the relations between the two partners (Murdoch and Subhash Chandra) the answer is as follows.

Quote: "Most of you by now have seen that these were the blinkered visions of some disgruntled sections who wanted to plant fabricated media stories to hurt our public perception. Broadcasting is one business; programming and marketing another. Your company's business earnings come from programming and marketing. How could the relationships among shareholders of the broadcasting venture affect the business of your company."

It's pretty clear why shareholders are still wondering whether the question has been answered or not.

That all is not hunk-dory between Murdoch and Chandra becomes evident from a statement that appears a little later in the report: "There have been reports of a leading English channel turning into Hindi and its resultant effect on Zee TV, Zee Cinema or EL TV. It is more than six months and by now you would have seen the results." A cheap potshot by any yardstick.

Other questions which have been answered similarly are: What are the external factors that could affect your business? What is the competitive advantage of Zee Network? There have been rumours that the mass exodus of people from Zee would hurt the future business of the company? (sic) An excerpt from the last question's answer reads as follows: "Every organisation has to renew itself to cope with the future challenges...although the media poured contempt, yet is by now well established that we have only grown stronger. The more fires and ordeals you pass through, the stronger you emerge....Every restructuring entails some pain but in the process we have acquired more vigour and vitality. The happenings at Zee have proved that no individual is bigger than the organisation even as Zee respects individual initiatives."

A pleasing aspect of the report is the insertion of an investor response coupon relating to the company's dividend warrants. The response coupon will allow the company to collate information on whether investors have received their warrants over the past four years. But a key question is will Zee send fresh dividend warrants to investors who have not received theirs in the past?

For the record, Zee Telefilms reported a total income of Rs 102.44 crore (Rs 90.08 crore in 1995-96) with a profit after tax of Rs 28.82 crore (Rs 23.02 crore). Ambience Space Sellers, its subsidiary, had an income of Rs 54.90 crore (Rs 51.15 crore) with a profit after tax of Rs 13.27 crore (Rs 7.38 crore). A 45 per cent dividend has been declared for the year.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.