Monday, 5th May 2008

SPORT SHORTS

* The International Olympic Committee (IOC) has awarded Japan Consortium the broadcasting rights for the Vancouver 2010 and London 2012 Olympic Games. The Consortium, an association between NHK and NAB (The National Association of Commercial Broadcasters in Japan), has an ongoing relationship with the IOC. The sum of the broadcast rights fee amounts to 32.5billion yen (US$312million). TheConsortium was selected on its capacity to reach the widest audience, across a variety of broadcast platforms, including free-to-air television, subscription television and digital media, internet and mobile phone. The agreement also includes sub-licensing options for broadcast rights to specific platforms. Television Asia Plus, 5th May 2008

* Over 1 million viewers have logged on to TVB.com's official Olympic website to see live streaming of the Torch Relay in Hong Kong, causing a temporary jam. Unlike MSN, Google, Yahoo! and other major online portals, TVB.com is the only media that offers live streaming of the Olympic for global online users. Coca-Cola signed on as the most prominent global Olympic supporting brand in leveraging TVB's marketing dollars by helping it gain more publicity overseas. Other sponsors are the HK government, Oriental Watch and Blue Girl. Approximately 70% of the sites viewers are local and the rest from North America and Southeast Asia. Growing audiences in Greater China will also be a focus. Marketing-interactive.com, 2nd May 2008

* The Philippines’ Globe Telecom has launched 3G mobile TV. The service, using technology provided by US-based NMS Communications, will cost P5 (US$0.11) per minute. Subscribers can watch either live or made-for-mobile, looped, channels. Made-for-mobile channels air pre-recorded series, re-runs and video clips strung together. Non-live channels are refreshed up to three times a week. Live channels available on the service are GMA and ABS-CBN, as well as CNN International. Made-for-mobile services are comedy and lifestyle service The Hub offers clips up to five minutes long; and a sports service. Globe Telecom is the second-ranked mobile operator after incumbent telco PLDT’s subsidiary Smart. Rapid TV News, 4th May 2008

* hanarotelecom's IPTV service hanaTV has reached a subscription base of 900,000 to lead the South Korean IPTV market in subscriptions, ahead of rival KT's Mega TV service which registered 567,230 subscribers as of March 2008. Quarterly revenue for Q1 2008 from hanaTV came up to KRW21.3billion (US$21.3million). hanarotelecom posted Q1 2008 revenues of KRW493billion (US$491.5million), a 9.3% increase year-on-year and a 0.9% increase quarter-on-quarter. Revenue growth was attributed to increase in subscriptions to voice and IPTV services, as well as 'solid' growth of corporate businesses including leased line and IDC. Further, hanarotelecom drew 1.83million subscribers to its 100Mbps broadband services as of end-March 2008, accounting for over half of the company's total subscribers. Television Asia Plus, 5th May 2008

* Subscribers has commenced collective legal action against Korean telco hanarotelecom for the alleged unauthorized sale of subscribers' personal information. 20 employees, including hanarotelecom's former CEO are facing charges of transferring 83.5 million pieces of personal data including addresses, social security numbers and telephone numbers to some 1,000 telemarketing firms between January 2006 and December 2007. The damages sought is in the region of KRW1million (US$1,000) and the cost of the lawsuit is KRW10,000 (US$10) per person. Law firms across the country are in the process of gathering victims through online communities. Hanarotelecom contends that it specified in small print that customers' personal information may be used for marketing purposes, the police argued against marketing firms to be listed on the telco's service contracts with customers. Television Asia Plus, 5th May 2008

* India’s telcos want regulators to intervene to force channels to charge less for their content, much as it did for DTH operators recently. Led by Bharat Sanchar Nigam Ltd (BSNL), which offers IPTV services, telcos want the Telecom Regulatory Authority of India (TRAI) to order channels to charge IPTV operators half of the fees they charge cable operators. That was TRAI’s ruling in the DTH sector. But TRAI is in the middle of a consultation process into how it should regulate IPTV. Any scrutinisation of channel fees is unlikely before the regulator has even decided how it should regulate the new technology. India has a limited number of IPTV services, with BSNL and MTNL the main operators. Rapid TV News, 4th May 2008

* Online recruitment portal JobStreet and A1 Team Malaysia have formed a partnership to cross-promote each company’s brand. The JobStreet.com logo on the rear of the Malaysian A1 race car will be featured on global television coverage of the A1GP World Cup of Motorsport events in Shanghai, China and Brands Hatch in the UK which is estimated to attract around seven million viewers. In Malaysia, the race is shown live on Star Sports and the highlights are shown on RTM, and the team gains widespread pictorial media coverage across the country for its participation at each event. Meanwhile, the A1 Team Malaysia banner advertisement at Jobstreet's website will link through to the team's own website, a regularly updated ‘virtual home' for the Malaysian entry in the A1GP Series. Marketing Malaysia, 2nd May 2008

* Fox Sports has revealed it will broadcast live and exclusive coverage of next month's football friendly between Hyundai A-League club Melbourne Victory and Italian Serie A TIM giant Juventus. The game, which will be played at the Telstra Dome on May 30, is expected to include Juventus captain Alessandro Del Piero, leading striker David Trezeguet and former World Player of the Year Pavel Nedved. In May, Fox Sports will also broadcast coverage of the deciding weeks of the Barclays Premier League and the Coca-Cola Championship, the AFC Champions League and Australia's friendly against Ghana. Sports Media, 2nd May 2008

* MP & Silva acquired the exclusive media rights to the Fédération Internationale de Volleyball (FIVB) Women’s and Men’s World Olympic Qualification Tournament in Tokyo, Japan from Dentsu. Under the agreement, MP & Silva acquired the exclusive ‘LIVE’ and delayed media rights to 56 Olympic Qualification matches – consisting 28 matches for each gender category – for all television, mobile and broadband television. It acquired the rights for some part of Europe & the Americas, Oceania and Asia. Japan’s women’s team will face Thailand, South Korea, Dominican Republic, Puerto Rico, Kazakhstan, Poland, and Serbia for four final spots, while the men’s competition will feature Japan, Australia, Thailand, Algeria, South Korea, Iran, Italy, and Argentina, battling for two final places. Sportbusiness.com, 2nd May 2008

* Promotion to England's football Premier League is worth at least £60 million and is the biggest financial boost a football club can receive, according to analysts at global accountancy firm, Deloitte. The Championship teams who win a Premier League place get £30 million from TV rights, plus £5 million from extra sponsorship and merchandising deals each season. Even those who are relegated after one season receive £24 million over the next two years, taking the total to about £60 million - more than the Champions League, which can net English clubs £30 million. League One football clubs winning spots in the Football League Championship next season will also receive a 30% increase in revenue. Already-promoted Swansea City and two others can expect to receive a financial boost worth £1.4 million according to Deloitte. Sportbusiness.com, 2nd May 2008

* Manchester United is the most valuable football club in the world, according to Forbes magazine's latest rankings. Manchester United, which came second in a list compiled by accountants Deloitte in February, topped the table ahead of Real Madrid. Forbes value United at £905 million ($1,800 million) and Real at £646 million ($1,285 million), with Arsenal at £603 million ($1,200 million) in third. Liverpool is up to fourth from 11th in the 25-team list. David Beckham replaced Ronaldinho as the world's highest-paid footballer after joining the Los Angeles Galaxy, earning £25 million per year ($48.9 million). Sportbusiness.com, 2nd May 2008

* French mobile phone operator SFR has acquired the exclusive mobile rights in France to soccer's 2008 European Championships. The financial details of the deal, which include the rights to all 31 games at the competition, were not disclosed. SFR customers will have access to highlights, including goals. The firm, an official sponsor of the French national team since 1996, had a similar deal in place for the 2006 World Cup. French media group Vivendi owns 56% of SFR and the rest belongs to mobile phone operator Vodafone. Euro 2008, which runs from June 7 to 29, is to be co-hosted by Austria and Switzerland. Sportcal.com, 2nd May 2008

* Euroleague Basketball and leading facilities and live sports and entertainment organization AEG announced a long-term partnership on a range of basketball-related programming, presentation and development initiatives. Central to the partnership is the hosting of Euroleague Final Four events in arenas owned or operated by AEG as well as providing services to Euroleague clubs regarding venue management, sales, and content optimization, in addition to the design, development, and construction of new world-class arenas. Euroleague Basketball also plans to host the 2009 Euroleague Final Four in AEG’s new O2 World arena in Berlin (opens Sep 2008). AEG and Euroleague Basketball plan to have the 2010 or 2011 Euroleague Final Four at AEG’s O2 Arena in London. AEG will also host future events in other company owned or operated facilities across Europe. Euroleague Official, 3rd May 2008


MORE NEWS

Elsewhere/New Media: Mobile Net Extends Reach of Sites

Nielsen, a US media research company, has reported that mobile internet has extended the audience reach of many net sites by an average of 13% over home PC traffic alone in the US. For some categories, such as weather and entertainment, the extended reach has been even greater at 22%. The cross-platform insights have come from TotalWeb, a new report from Nielsen. TotalWeb has integrated data from Nielsen Mobile and Nielsen Online to show the audience for more than 200 leading Internet sites across the PC and mobile internet space.

Nielsen's data also show that for many internet publishers, mobile internet has increased the overall size of their audience. For games and music sites, the rise has been 15%. Interestingly as per reports, social networking sites do not show much benefit as their rise has been three% only. Also, sports sites have risen by 10%.

Nielsen Mobile VP mobile media Jeff Herrmann said, "The data demonstrate that the mobile internet can not only increase the frequency of visits to a website, but also grow the overall size of the pie. Publishers can now monetise their total cross-platform audience, and advertisers will better understand the efficiency and incremental value of mobile Web traffic." According to Nielsen, 87 million US mobile users subscribe to mobile internet services, and more than one in ten mobile subscribers (13.7%) actively uses mobile internet each month. Indiantelevision.com, 3rd May 2008


ARTICLES, COMMENTS, INTERVIEWS & OPINIONS

India TV broadcasting — Subscription Revenues Yet to Take Off
Shanthi Venkataraman comments on The Hindu Business, 4th May 2008

As broadcasters get ready to roll out new genres of programming content, they may find themselves running up a slippery slope. Securing the viewer’s attention is becoming increasingly difficult with new channel launches threatening to shake up the hard-earned market shares of incumbents.

New concepts such as the Indian Premier League appear to have stolen ‘eyeballs’ from family soaps with great fanfare. Viewership is fragmenting and big advertisers, who now have access to multiple platforms to reach out to their target group, are playing hardball. To top it all, international giants such as Time Warner, NBC Universal and Walt Disney now want a larger piece of the television pie too. The intensifying competition is only to be expected in a booming industry. However, the problem is compounded by the fact that channels, including ‘pay’ ones, remain significantly dependent on advertising income to cover their costs.

Subscription revenue, which would help cushion any adverse turn in advertising spends, has been growing at a slower than expected pace. The subscription growth of listed companies has been in single digits, or at best low double digits, heavily overshadowed by advertising revenue growth. Pay revenues of leading broadcasters were projected to grow at annual rates of 20% and above between 2007 and 2011, on hopes that the adoption of CAS (conditional access system) and entry of DTH (Direct to Home) operators would address the problem of under-declaration of subscribers by cable operators. However, the process of digitisation has been slower than expected.

Slow progress of CAS
It’s been more than a year since CAS was mandated in select areas of the three metros of Delhi, Mumbai and Kolkata (CAS areas account for less than 20% of the overall cable households in each of these cities). But its implementation has been slow. This is despite TRAI’s (Telecom Regulatory Authority of India) efforts to ensure a smooth transition to the new digital regime.

Subscribers opting for CAS, in all likelihood, pay a lower monthly cable bill, thanks to the cap on channel price at Rs 5 per month per subscriber. Moreover, a digital format allows viewers to pay for channels they actually want to watch. Yet, the adoption rate of CAS as of December 31, 2007, was under 30% in the three metros overall (40% in Mumbai). High upfront costs, inertia to shift to a new format and preference for free-to-air channels are some reasons cited for the slow adoption rate. Sections of the industry claim that some households have not opted for CAS because they continue to receive pirated pay channels.

DTH, a silver lining
One likely explanation is that a large number of households have opted for DTH (Direct to Home) over CAS. Dish TV and Tata Sky now cater to over 4 million households, while the number of CAS set top boxes installed in the three metros was a little more than 4 lakh as on December 31, 2007.

The greater success achieved by DTH in acquiring customers has been the prime driver of subscription revenues over the past year. DTH operators, with their deeper pockets, appear better placed to subsidise set top boxes and are able to ramp up a subscriber base faster than local cable operators, who need to invest significant sums in upgrading their networks to digital transmission. However, 5 million digital households is just a fraction of the 70 million cable and satellite market.

Subscription picture
Broadcasters remain positive on subscription revenue growth. The entry of Reliance Infocomm and Bharti Airtel into the DTH market may fast-track the pace of customer additions. The recent extension of CAS to cover the entire area of the three metros and the promise of extending it to 55 more cities over the next couple of years has also raised hopes that subscription revenues will improve. For now, however, the proportion of subscription in overall revenues remains at 10-20%, for most listed companies.

Zee Entertainment derives about 40% of its revenues from subscription, thanks to its large international subscriber base. International subscription is a revenue stream that is yet to be tapped by broadcasters. But with the exception of general entertainment category, this stream is unlikely to make up for the slack on the domestic subscription for broadcasters.

In the near term, the price cap on channels is also likely to limit the revenues on the domestic subscription front; broadcasters’ share of the monthly subscription fee per subscriber is Rs 2.25 per channel in CAS areas. TRAI has also recently urged broadcasters to offer their channels to DTH operators at half the prices at which they are offered in non-CAS areas. They are also required to offer channels on a la carte basis.

Clearly, these issues will be ironed out over the long term. Cable home penetration is still growing, more DTH players will broaden the market, and consumers are increasingly willing to spend more on entertainment. But in the medium term, broadcasters will have to continue to tune their programming to advertisers.

Ad dependent
Broadcasters continue to plan new channel launches, betting on a growing advertising pie. Advertising spends as a percentage of GDP is less than 1 one% in India, half the global average. Advertising spends, particularly on television, have increased at an impressive rate over the last two years. Many see Indian advertising at an inflection point. As Indian per capita income crosses the $750-mark, advertising spends are expected to gallop. The concern right now as far as television is concerned: Is advertising spends growing fast enough to accommodate the expanding number of channels? Even if it were, there are still other challenges.

Television broadcasters pitch their medium as the most cost-effective, considering that it reaches out to more than 100 million households (70 million are cable and satellite homes). Advertisers have also accommodated advertising tariff hikes over the past couple of years, for the same reason. However, competing mediums such as outdoor media, radio, the Internet, sports advertising, and in-theatre advertising are also vying for their attention.

Rating worries
The lack of adequate rating systems that capture audience preferences for programming also make it harder for advertisers to justify their investments. Advertisers rely on TRPs (Television rating points) to determine a programme’s program’s popularity with the audiences. Yet, the industry is increasingly dissatisfied with the current rating systems of the two rating agencies.

The sample size used by these firms to measure a programme’s popularity is considered inadequate, as it does not capture a large part of rural audience preferences. Moreover, as the number of channels increase, viewership is fragmenting. A study by rating agency TAM reveals that while the number of channels watched in a digital set-up is as many as 28 (as against 15 in an analogue set-up), the overall time spent on viewing has not gone up.

The numbers game
The lack of accurate information on audience preferences forces both broadcasters and advertisers to play the numbers game. Broadcasters tailor-make their content to reach out to as many viewers as possible. The result is a lot of repetitive, formulaic programming and spiralling costs of content; the rising cost of movie acquisition rights being a prime example. The absence of a strong “pay” television market also leaves little room for niche channels.

There is space for new genres of programming, such as lifestyle and youth channels, that allow advertisers to focus on a target group. But so far, focused genres such as infotainment channels and children’s channels have managed to garner only 3-4% of the advertisement pie. so far. Whether the latest genres will have greater success in attracting advertiser interest remains to be seen.