Wednesday, February 07, 2007

Solutions to Key Talking Point 5

Hi guys,

Here comes my analysis of the situation. My answers are at logger-heads with all comments. So if you disagree after reading my answers, lets have a discussion.

Note that the audience of cable channels and DD are almost mutually exclusive. Most people who have cable, though they get DD, do not watch it these days (Anybody contesting this??:). Hence the ordinance gives an opportunity to the right holders to reach an audience that they never reached before, and also they get paid for it (Additional 75% of DD ad revenues)

1. The revenues from current broadcast will not go down since the audience has remained the same. Will get additional revenue (75% of DD Ads) by sharing it with DD. Hence the total Ad revenue goes up

2. Current cable subscribers who subscribe channels only for certain events will drop out and hence may be harmful to some extent. Boquet offerings like Sony, Zee etc who give a bunch of channels may suffer lesser
They will still retain many viewers because of post match analysis, highlights, other sports etc
On the positive side, they get to reach a wider audience and hence more ad revenue.
The above points may balance out slightly towards the positive side for the right holders

3. No, since it gets hardly any Ad revenue for the whole day telecast. Considering that it cud have sold those slots for better Ads. Note that DD still will gets good Ad revenue since it reaches an audience that other channels wont. Plus it gets lot of Govt Ads too
It will benifit if it puts the feed only in DD sports, which is languishing completely

4. Since overall it looks positive for the cable industry, the future biddings would go up.

5. No. You dont want DD to turn a mirror of other sport channels. DD will suffer in the long run.

Additionally, the cable industry may want to insist that they shud be given rights to sell the Ad space rather than DD doing it. With a strong stake, they will be able to sell higher.
Also understand the difference between wider audience Vs target audience that I have described in detail in the comments section of the case. Click here to go

In short, plus for people, plus for cable, negative for DD. So it is a political master stroke. It takes a little revenue out of DD and invests it in the political future of Congress.

Parting shot (In support of my take)
If it were to have a negative impact, cable guys would have protested or gone to court. The very fact that they have not done it shows it is positive for them :)

Click here for the questions



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