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30 March, 2015 14:52 IST
Broadcasters will be the biggest beneficiary of digitization: Edelweiss
Source: IRIS | 28 Nov, 2012, 10.08AM
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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.

TV18 Broadcast, ZEE Entertainment and ZEE News are its top picks.

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.

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