STAR and Zee Disband MediaPro Indian TV Venture

STAR and Zee Disband MediaPro Indian

Will digitization benefits offset loss of bargaining power?

HONG KONG – Indian television leaders STAR Den and Zee Turner are to disband their three year old MediaPro Enterprises joint venture.

The JV had packaged and represented the channels of the two groups selling them to cable MSOs and satellite platforms.

New regulations recently drafted by the Telecoms Regulatory Authority of India (TRAI) do not allow a company to bundle channels from more than one operator. The two companies said that they will now set up their own affiliate sales functions.

They also said that they expect recent rule changes allowing channels to increase their prices by 27.5% in two stages will increase subscription revenues.

“We had created this JV to address various anomalies in the analog market, curb piracy and introduce transparency for the benefit of all stakeholders. I must say that we have been very satisfied with the outcome of the partnership. In the past three years, with DAS getting implemented, India is truly on the path to digitization,” said Zee CEO Punit Goenka.

Indian media commentators are now speculating as to whether Star, Zee or Turner will emerge strongest from the split, though the answer is likely to depend on both the relative strengths of their channels as well as their new commercial structures. How much the platform operators gain from the split is also moot.

TRAI moved against aggregators as it feared that the biggest were becoming too strong and that in order to carry the most popular channels MSOs were forced to take packages that also included weaker networks. According to TRAI the top three MediaPro (representing Zee, Turner, Star India and DEN), MSM Discovery and IndiaCast UTV (representing Viacom, TV18 and Disney’s UTV group channels) had 59% of the market, which it estimated at 239 pay-TV channels.

When it launched MediaPro had 68 channels. TRAI recently said that it accounted for 21 of the top 50 channels.

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