sports channel business plan
TRANSCRIPT
1
June 2011
Sports Channel Business ProposalSports Channel - Business Model
Prepared by me in 2011
Manish Poddar [email protected]
The Growth Engine of India
The largest youth population in the
world; ~ 66 % of the total population
(more than 808 mn) is below the age of
35.
Population 1.18 trillion
An enduring and domestic
consumption led Economy
Media & Entertainment Indian Economy
Rising disposable
income and the propensity for households to
spend on entertainment
activities
India is only the 14th largest E&M industry and set to become a 100
billion USD Industry in next
few years
Television and print dominate the
advertising segment in India,
with over 80% share of revenue
Emergence of alternate
sporting ICONS beyond cricket
India to be hottest Global Sports
Market
Sports
IPL success has shown other
sports the way encash to the
goldmine
3
2007 2008 2009 2010 2011P 2012P 2013P 2014P 2015P
516652
1275
211 241 257 297 341 389 455533
630
Total Industry size Television Television Industry
INR
Bn
Total size of Industry of M&E is INR 650 Bn in 2010 and expected to be doubled ( INR 1275 Bn in 5 years time
Television Industry accounted 45% of the total M&E Industry size in 2010 and expected to be doubled (INR 630 Bn) in 5 years time & likely to represent 49% of the total M & E industry in 2015.
12% CAGR Estimated Growth 16% CAGR
M&E & Television Industry
Television Industry Has shown continued
Growth in reach
India is the world’s third largest TV market with almost 138 million is growing optimism in the industry. There will be great demand TV Households (HHs) next to China and USA.
Has grown tremendously over the last two decades, with an average growth rate is double digits.
Added almost 100 million viewers in 2010 to reach 600 million viewers and crossed the 550 channel mark from 460 in 2009.
New Players are entering the market with niche offerings like food channels and more channels in English Entertainment Space.
Viewers are able to access niche content easily on DTH platform even in smaller markets. Cable & Satellite (C&S) penetration has reached close to 80 % with the soaring growth
show by the DTH platform. New Technologies like (HD), STBS and delivery platforms like mobiles are rapidly evolving,
creating further opportunities for innovation and growth.
4
Opportunities
India is one of the largest media consuming markets in the world; however, the size and scale of industry is limited when compared with global M&E Industry.
Majority of companies are still small in size or profits when compared to other growing sectors like Retail, Telecom or Information Technology. However, the medium has many drivers in place for growth in the years ahead.
India is the only country in the world with 88 million 2 non TV HHs indicating the potential for growth in the market.
There are still more than 250 channels awaiting approval as there is growing optimism in the industry. There will be great demand for satellite bandwidth with the introduction of HD channels, the HITS platform,
existing DTH channel expansion plans, new channel launches, and VSAT services. The consumers in India are less amenable to paying for content, compared to counterparts in other countries
representing a gap which can be addressed. In creating further opportunities for innovation and growth. advertising, only 10 percent of advertisers on print
advertise on television currently and a portion of the remaining 90 percent still could be tapped for further growth of the medium.
M&E & Television Industry
US Philipines Malaysia Indonesia China India
4.83
3.33 3.3 3.022.6 2.55
Average Time Spent Consumer is King
Indian consumers pay USD 3.5 per month on pay TV compared to USD 15 by Americans as our nation has traditionally not been used to paying for media content.
52010 2011 2012 2013 2014 2015
68 67 66 64 60 56
56
812
18 26
28 38 48 56 64 71
0.5 0.8 1.3 1.8 2.3 2.8
Analog Digital DTH IPTV The penetration for digital cable and DTH is expected to increase at a much faster rate than was anticipated earlier.
The total numbers of DTH subscribers to be added in 2011 are expected to be ~10-12 million as the industry is adding almost a million subscribers each month.
MSOs have plans to make large investments over the medium term in setting up digital network infrastructure and acquiring interests in smaller MSOs and LCOs
2006 2007 2008 2009 2010 2011p 2012p 2013p 2014p 2015p122 140 158 169 194 222 253 298 350 41661 71 83 88 103 119 136 157
183214
183 211 241 257297
341389
455533
630
Subs rev Ad rev Total
Growth in Revenue
Growth in Digital Subscriber
The share of broadcasters in the total subscription pie is expected to go up from the current levels of 21 percent of the overall subscription revenues in 2010 on an average across platforms to 30 percent in 2015 .
The share of subscription revenues in the top line of the broadcasters is expected to increase from the current level of 28 percent to 36 percent by 2015.
Facts
Facts
Expected to perform well in the next five years
Growth in the number of TV Channels
Introduction
Source: TAM, Other include channels which are not captured by TAM
UTV Action
TVI Discovery Turbo
In Mumbai FOX, FOX Crime
Sun -2 Star World HBO Delhi Aaj Tak Baby TV
Raj -2 Star News Star Gold DD Urdu Nat Geo HD/ Wild/
JJ TV Surya TV B4U Makkal TV Adventure/ Music
GEC AXN Sun News Manorama News
E TV Punj World Neo Sports
Gemini DD Sports Colors
PTV FTV NDTV Imagine
Yes Alpha TV 9X
DD1/2 ATN DD4 - Discovery CVO Ani Plan ET Now
DD Reg Zee TV 16(Reg) Sony Vjjay TV Jaya TV Warner Brothers
Cable Star Plus Asianet ESPN TNT Raj+ Lumiere Movies
CNN BBC World Sun Tv Jain TV NEPC Home TV ATN Ben Large number of
Prime Sp DD (Info) Udaya TV ABNI NBC NGC Awaaz Regional GECs
MTV Money TV CNBC 10+ ETV NDTV Profit and news
Venus Aastha Zoom channels
Zee Cinema Gurjari Star One
El TV Lashkara Hungama
NDTV 24X7 Pogo
NDTV India5 11 1329
55
6675
130
170
200263
308
363
461
550
0
100
200
300
400
500
600
1991 1992 1993 1994 1995 1996 1999 2000 2002 2004 2005 2006 2007 2009 Aug-10
Growth
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Content Provider BroadcasterContent
Aggregator or Distributor
DTH
IPTV
MSO LSO
User
Broadcasters 550 Channels
Broadcasters and MSOs losing in a big way due to non addressability in Analogue cable system
Channel Aggregators
DistributionPlatforms
Cable
DTH7 Operators
MSOs6000
LCOs60,000
Pay TV households
Mediaries in Value chain
No intermediariesIn the value chain
Revenue Mix
Revenue Mix
Revenue Mix
Revenue Mix
Advert65%
Sub35%
Advert65%
Sub35%
Others5%
Carriage /placement
50%
Sub40%
Others10%
Sub100%
Approx 66% of total pay TV household End consumers not traceable hence the system suffers from
massive underreporting (approx 85%) of subscribers by LCOs Broadcaster/MSOs suffer hefty loss of subscription revenue
Digital AnalogueEnd consumerstraceable hence fair distribution of subscription revenues
End consumerstraceable hence fair distribution of subscription revenues
Indian Television Industry Value Chain
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Broadcasters – Channel Strategy- MSO
For a broadcaster dependent on advertising revenue, ensuring reach is critical because higher reach implies greater access to the subscriber base – thereby providing an opportunity for the channel to improve its ratings.
Carriage and placement fee provides the broadcaster access to an MSO’s network. Due to the bandwidth constraints in the analogue transmission mode, the MSO “allocates”
certain frequencies to the highest paying channels - phenomenon can be interpreted in simple economic terms as a “demand-supply” mismatch.
With supply remaining unchanged at around 80 channels and the total number of channels having risen steadily to around 550 – carriage fee reflects the entry barrier posed by analogue transmission.
Lower Carriage Fee o Certain channels that have a steady demand in the market may pay lower carriage feeo The composition of the bouquet that the channel is part of and the relevance of that
bouquet to the MSO. Higher Carriage Fee
o a genre has high competition amongst channels (and new channels continue to enter the market), then carriage fee is likely to be higher for that genre- because competition creates pressure on the number of frequencies allocated by the MSO to any particular genre. It has been observed that carriage fee is a phenomenon predominantly observed in metered markets.
The key parameter in calculating market shares in the case of broadcasters is the channel’s Gross Revenue Point, which takes into account both its reach and viewers’ stickiness.
A prime slot placement of a channel enables good reach, while good quality content ensures stickiness or viewer loyalty. Prime slot placement is particularly important for mass viewership
channels (e.g. GECs) to be able to sell advertising slots.
Decision Criteria
For Carriage
Fee
Rationality
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Industry Practice - Placement Strategy
UTV Channel: FTA kind of arrangement with MSOs whereby UTV does not charge subscription fee from MSO , therefore,
does not pay carriage fee
Placement Strategy adopted by Present Broadcasters
Bouquet:Broadcasters form a bouquet of channels and or become part of a bouquet to pay lower carriage fee.
Newer Channel: Considering that a brand new channel will have to pay at least four times. A channel can also mix and match its repertoire to optimize reach and cost. If a broadcaster signed a new deal for
its presence on S-band, it would have paid Rs 74 crore a year for the pan-India presence between October 2010 and February 2011. For UHF-bands, that figure dropped to Rs 46 crore. However, no broadcaster opts for a 100 per cent penetration and 60-70 per cent penetration is good enough for a national footprint. Therefore, the channel would have paid between Rs 44-51 crore for a 60-70 per cent penetration. That leaves some more room for the MSO to accommodate more broadcasters. For instance, a music channel launched last year, got 3 per cent of S-band and 74 per cent of UHF in the Hindi speaking markets for Rs 23 crore for a year.
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Broadcaster- Sports Channels In India
Sports are doing very well in India, which gives the impetus for broadcasters to explore content for such niche channels.
Industry Outlook Sports Marketing, which includes both marketing and sports events and sponsorships to market both teams and non-sports products, is today a business worth INR 20bn in India (out of which cricket alone accounts for INR 18bn).
Growing Viewership and RevenueWith the growth in sports viewership, the number of advertisers in the sports genre grew at a CAGR of 32% from 2005-2007. Consequently, the size of the sports genre in terms of advertising revenues stood around INR 7bn in FY2008 as against INR 5bn in FY2005.
Emergence of other sports The market is slowly moving from one-sport market towards multi-sport market. The major factors for the change is launch of several new sports channels in India, acquiring and marketing properties across other sports, internationally and Indian sportsmen doing well internationally in sports other than cricket. For instance, Indian now has its own Formula 1 team and Grand Prix is expected to make its debut in India in 2010 or 2011.
Profitable Venture New pay TV channels have carved out for themselves profitable market positions on the back of sports content which in turn has driven up TV rights values
Agencies and Content For the agencies representing and investing in rights these are boom times with sports content increasingly seen as essential to driving commercial revenues.
Driven by Sport R
ights
Worldwide Sports broadcasting industry is driven by subscription The growth of 13% in market size which was expected for 2010 revenues, and the same model is expected to be seen in India.
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Sports Channel Revenue Potential
Genre Viewership % Ad Revenues Power Ratio (Ad % /Viewership%)English General News 0.40 3.56 8.95English Business News 0.19 1.15% 8.06Sports 3.17 16.15% 5.1
Command higher ad revenues in relation to their viewership.
English News and Sports have very high power ratios compared to mass genres like GEC, Movies, etc. owing to advertiser's preference for quality of reach in terms of focused male audiences .
Ranked 3rd in terms of Power Ratio.
Indonesia South Korea India Hong Kong Singapore Malaysia UK USASports 8%(11) 9%(22) 2%(13) 17%(42) 13%(20) 9%(14) 5%(34) 11%(75)
Share of genres for different countries (number of channels)
Comparing the Indian television industry with other countries, India lags behind others on the number of sports.
Sports is a powerful category but the target audience is largely male and the viewership is seasonal depending on the event calendar
2006 2007 2008 2009 2010
3.8
3.2 3.32.8 2.9
Viewership share (%) by Sport
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DD Sports
DD Sports was launched on March 8, 1999 and become the only ‘Free-To- Air’ Sports Channel in the country Domestic: Besides showing live important sporting events like cricket, football, tennis etc., DD Sports
showcases Indian sports including Kabaddi, Kho-kho etc. International: In addition to the international sporting events, important national tournaments of
hockey, football, athletics, cricket, swimming, tennis, badminton, archery, and wrestling are also telecast.
Other Programmes-Also telecasts news based programmes, sports quiz and personality oriented shows.
Ordinance on sharing sports feeds with DD &AIR
Makes it obligatory for broadcasters to share live telecast signals of sports events without their advertisements with the public service broadcasters like the Doordarshan and All India Radio by entering into a commercial agreement
Doordarshan Sports Channel
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Ten Sports Channel
Taj Television Limited is a full-service television concern, based in Dubai Media City with eight regional offices across the sub-continent. Taj was established in January 2001, and is owned by Zee
Channels: Its portfolio consists of the Ten Sports, Ten Cricket and Ten Action+ channels, digital studio facilities and integrated transmission services for various broadcast clients.
Viewers: Ten channels are the most watched sports channel by far across the sub-continent. Recent viewing data shows that the channel enjoys over 50% share of viewing of sports channels in India and the pattern is repeated across the region.
Employees: Taj Television Limited employs nearly 150 highly skilled and experienced professionals from all over the world.
In India: All the channels from Taj Television are distributed exclusively to cable operators in India by Taj Television India Pvt. Ltd and are available with the leading DTH platforms.
Figures (In lacs) FY 2007-08 2008-09 2009-10Gross Income 817.3 1463.1 1786.31y-o-y growth 79% 22%Expenses (including Dep.) 1244 1293.3 1731.05y-o-y growth 4% 34%EBIT -231 169.8 55.26as a % of Gross income -28% 12% 3%
3 years Financial Figures
Taj Television(India) Private
Limited
The distribution company shall become 100% subsidiary of Zee Entertainment Enterprises Limited.
Rights: The company has exclusive rights to distribute various channels owned by Taj TV Ltd, Mauritius including for ‘on-air’ advertisement on various channels.
Revenue from distribution comprises of distribution of Ten Sports and Zee Sports channels in India
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NEO Sports Broadcast Pvt. Ltd owns and operates two channels i.e. NEO Cricket The number sports channel as per the annual half hour cumulative ratings for sport channels,
TAM viewership data for calendar year 2008, 2009 and 2010 (Source: TAM People Meter Systems) and NEO Sports – the dedicated sports channel.
NEO Sports offers sports like Football, Tennis, Golf, Motor sports, Badminton to the Indian sports lovers. This includes German Bundesliga football league, US PGA TOUR, ITF Davis Cup and Fed Cup events, WTA TOUR Women’s Tennis, NASCAR , BWF among others.
NEO Cricket is a cricket centric TV channel and currently broadcasted in more than 25 countries covering Middle East, South East Asia and North America including USA and Canada .
Neo Sports Broadcast Pvt. Ltd
Figures (In lacs) FY 2008-09 2009-10Gross Income 35370 40892y-o-y growth 16%Expenses (including Dep.) 54415 74671y-o-y growth 37%PBT -19044 -33779as a % of Gross income
2 years Financial Figures
Bouquet Strategy
The One Alliance, the distribution company of Multi Screen Media and Discovery, has signed up Neo Sports Broadcast for the pan-India distribution of its two channels - Neo Sports and Neo Cricket.
The One Alliance will primarily be focused on managing the distribution of the two Neo channels on analog cable networks.
Neo Broadcast's in-house distribution team will now be reassigned to ensure digital connectivity (principally with direct-to-home operators) grows exponentially.
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FY June-2008 June-2009Gross Income 81724 66551y-o-y growth -19%Expenses (including Dep.) 72447 57804y-o-y growth -20%PBT 9277 8747as a % of Gross income 11% 13%
Figures in (Lacs)
ESPN STAR Sports is a 50:50 joint venture between two of the world's leading cable and satellite broadcasters.
As Asia's definitive and complete sports broadcaster and content provider ESPN STAR Sports combines the strengths and resources of its parent companies – Walt Disney
(ESPN, Inc.) and News Corporation Limited (STAR) – to deliver a diverse array of international and regional sports to viewers via its encrypted pay services.
Paralleled variety of premier live sports from around the globe 24 hours a day to a cumulative reach of more than 310 million viewers in Asia.
ESPN STAR Sports has 19 networks covering 24 countries, each localized to deliver differentiated world-class premier sports programming to Asian viewers.
ESPN STAR Sports’ top quality programming and world-class presentation is beamed from the company's 73,000 square-foot state-of-the-art production facility and earth station in Singapore.
2 years Financial Figures
ESPN Star Sports
ESPN STAR Sports’ bouquet of networks including ESPN, STAR Sports & STAR Cricket Bouquet Strategy
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Pricing of Sports Channel
ESPN Star Star Sports Star Cricket Zee Sports Ten Sports Neo Sports Neo Cricket Bouquet (Average Price) 11.13Alacarta 33.13 33.13 16.05 35.45 26.6Commercial 80 80 75 75Commercial (Public Viewing) 2000
Bouquet 5.00 5.00 5.00 5.35 5.35 5.35 5.35Commercial
Bouquet (Average Price) 5.57Alacarta 16.57 16.57 4.01 17.73 13.3Commercial 80 80 75 75Commercial (Public Viewing) 2000
Bouquet (Average Price) 5.57Alacarta 16.57 16.57 4.01 17.73 13.3Commercial 80 80 75 75Commercial (Public Viewing) 2000
44.17
Non-CAS Area
41.45
22.09 41.45
The Broadcasters will offer the same bouquets to the IPTV operators as are being offered by them for non-CAS cable distribution and DTH Operators at 50% rate of Non-CAS
8333.3
8333.3
8333.3
CAS Area (Digital)
DTH ( Based on G22.09 41.45
The Broadcasters will offer the same bouquets to the DTH operators as are being offered by them for non-CAS cable distribution at 50% rate of Non-CAS
IPTV
Bouquet A-la-Carte
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Sport Channel Bouquet
Broadcaster Bouquet The One Alliance Zee Turener Star Den Network
Coverage National National/Regional National/ Regional
No. of Channels More than 18 31 21
Sports Channel Included Neo Sports Zee & Ten Sports ESPN & Star Sports
Broadcaster Bouquet Sun Distribution ETV UTV GlobalCoverage Regional Regional NationalNo. of Channels 22 11 4
Opportunities to form a Bouquet
Sun Distribution, ETV and UTV Global do not have sports channel in their Bouquet
Sports Channel Bouquet and Alliance Opportunities
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Budget for Sports Channel – Outsourcing Model
Expected Budget to launch a sport channel is INR 290 crores. This does not include the following: o Due to variability: Live production/
content expenses is not included in the below list, which will be extra.
o The Cost of buying rights for sports event is not considered and no budget is prepared as rights of sports varies from each other.
In an outsourcing model - Broadcast operation setup and technology support will be provided by third party under three years of contract.
The company will have to rent office space, hire professionals and pay carriage fee to MSOs.
Limitations
For personnel expenses, office rental and miscellaneous – 15% y-o-y increase is assumed
Carriage fee INR 30 crores/year
Rs 325 crores (All expenses are highly variable)
Items Fixed Cost Year 1 Year 2 Year 2
MIB Security Deposit (Govt. Fee) – Uplinking and Downlinking (The license is for 10 years) 10.1
MIB Consultancy Charges 8
WPC Charges 2 2 2
NOCC Charges 1.2 1.2 1.2SD/ HD Studio, PCR, MCR and Broadcasting Setup, Live Production units – DSNG/OB Vans (Excluding Building, Land etc.) 3000
Total 3021 3 3Variable Cost Year 1 Year 2 Year 2
Man Power 72 72 72
Teleport Service (Up-linking Charges with Bandwidth on MPEG-4) 144 144 144
DSNG Bandwidth Charges 120 120 120
Lease line to Teleport (Reliance, Bharti, VSNL) 48 48 48
Admin and Core Reporter Local Expenses 36 36 36
Light, generator, UPS and Other Expenses 24 24 24
Ground Distribution of the channel in Delhi 250 250 250
Ground Distribution of the channel in Mumbai 300 300 300
Ground Distribution of the channel in Chennai and other South 400 400 400
India Distribution in DTH Platform 500 500 500
Total 1894 1894 1894
Company Expenses Year 1 Year 2 Year 2 Personel expenses - Marketing, Admistration, Finace and Senior Management 900 1035 1190
office rental 1000 1150 1323
Marketing Expenses 1000 1150 1322.5
Miscellaneous 1363 1568 1803
Carriage Fee 3000 3000 3000
Total 12178 9800 10535Total Budget for 3 years
Total Budget for 3 years
Approx. / Actual Charges
32513INR 325 crore
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Department Personnel Number
PR 2
Brand Director 1
GM 1
Brand Manager 1
Support Staff 1
5
Airtime Sales Delhi 1
Mumbai 1
Kolkata 1
Bangalore 1
Support Staff 1
Assistant 1
Secretary 1
2
Total 17
Marketing
Corporate Affairs & International Operation Number of Personnel
4
Department Personnel In cities
Head of Distibution 1Channel Head 4Technical 3
7Delhi
Mumbai Bangalore
Kolkata Ahamedabad
Hyderabad Kanpur
Ludhiana JaipurIndore
Total 25
Representative Office
Assistant
Distribution
Regional Offices
Department Personnel In cities
Production Head 1Technical Head 1Broadcaster Operation Head 1Headline including Broadcasting Operation
20
Head Studio Production 5Assistant 5Support 5
Total 38
Production & Broadcast Operation
Departments Number
Finance Accounts 1Company Sectary 1Personnel 10
HQ 10Total 22
Finance Accounts
Departments Number
Head 1Admin 3Legal 3
HR 4Total 11
General Administration
Total numbers required: 121
CEO
COO Secretary
Secretary
Proposed Organogram Structure
Production & Broadcast Operation can be outsourced
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Permission for Uplinking a Sports channels
Eligibility Criteria
No FDI Limit : The applicant company, irrespective of its ownership, equity structure orManagement control, would be eligible to seek permission
Net Worth: The Company should have a minimum Net Worth as prescribed below:
Period of Permission: Permission shall be granted for a period of 10 years.
Fee: o The applicant will pay an amount of Rs. 10000 as processing feeo After being held eligible, the applicant company shall pay a permission fee at the rate of Rs. 5
Lakhs per channel.
Special Conditions/ ObligationsoThe applicant company shall obtain registration for each channel, in accordance with the procedure laid down under the Downlinking Guidelines notified by the Ministry of Information & Broadcasting separately.o The applicant company permitted to uplink shall operationalize the channel within a period of one year from the date the permission is granted by the Ministry of I&B; failing which the permission is liable to be withdrawn, after affording an opportunity of being heard .
item Required Net Worth
Single TV channel Rs. 1.50 Crore
For each additional TV channel Rs. 1.00 Crore
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The sports channels/sports rights management companies having TV broadcasting rights shall with immediate effect share their feed with Prasar Bharati for national and international sporting events of national importance, held in India or aboard, for terrestrial transmission and DTH broadcasting (free-to-air) under the following conditions:
o The events of national importance shall be determined by the Ministry of Information & Broadcasting in consultation with Ministry of Sports & Youth Affairs, Prasar Bharati and the concerned sports channels/sports rights management companies. In case of cricket events, these shall include all matches featuring India and the semifinals and finals of international competitions
o The above conditions shall apply to all future events including those covered by existing contracts of broadcasting rights. However, in the case of cricket events whose broadcasting rights have been obtained by sports channels/right management companies prior to the issue of the notification in the matter the rights holders will be obliged to share the feed for all matches featuring India and finals of international competitions.
o Prasar Bharati shall transmit the feed, free to air, on its terrestrial channel and carried through the terrestrial network and/or the satellite/DTH mode.
o The marketing of the events’ rights (terrestrial as well as satellite/DTH) will be decided through mutual negotiations between Prasar Bharati and the rights holder. The marketing rights should go to the party which offers to maximize the revenue.
o Revenue sharing formula of 75:25 in favour of rights holders without any minimum guarantee/opportunity cost, should be applied.
Compulsion on Sports Channel on feeding with Prasar Bharati
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General terms and conditions
Guidelines for uplinking from India
Satellites Choice: The company can uplink either in C or Ku Band. Uplinking in C Band would be permitted both to Indian as well as foreign satellites. However, proposals envisaging use of Indian satellites will be accorded preferential treatment. On the other hand, uplinking in Ku Band would be permitted through Indian satellite only, subject to the condition that this permission is not used to run/ operate DTH service without proper license, to which separate guidelines apply. Satellite to be used should have been coordinated with Insat System.
The company shall comply with the Programme & Advertising Codes, as laid down in the Cable Television Networks (Regulation) Act, 1995 and the Rules framed there under.
WPC: The company shall comply with the terms and conditions of Wireless Operational License to be issued by the WPC Wing, Ministry of Communications & IT.
Steps involved in application
Step 1: The applicant company can apply to the Secretary, Ministry of Information & Broadcasting, in triplicate, in the prescribed format “Form 1.
Step 2: Application will be sent for security clearance to the Ministry of Home Affairs and for clearance of satellite use to the Department of Space (wherever required).
Step 3: Demand draft for an amount equal to the processing fee after granting permission and sign an agreement
Step 4: Thereafter, the Company would be issued a formal permission to enable it to obtain requisite license/ clearances from the WPC Wing, Ministry of Communications & IT or approach a teleport service provider in case of TV channels/ uplinking by a Indian news agency.
Step 5: The applicant will pay the licence fee and royalty, as prescribed by WPC Wing from time to time, annually, for the total amount of spectrum assigned to Hub/Teleport station, as per norms & rules of the WPC Wing.
23
Constraints - Budget Planning
Advertising Revenue
Advertising Revenue is not considered to understand cash flow of the company because sports channel advertising revenue vary from time to time depending up sports event.
It also depends up programming structure of the company. Target audience
Programming Content
In the Budget, programming content cost is not included Programming cost depends upon the Broadcasting rights of sports acquired by Broadcasting
channel. Programming content cost of Sports channel are high .
Subscription Revenue
Subscription revenue is also highly variable and its depends upon the following Programming rights Tie-up with Distribution channel such as MSO and DTH Target Audience
Capital Outlay
Could be highly variable as expenses are subject to overall strategy of the company.
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Sports Rights
Possible Strategy That Can Work
New Sports such as GOLF, Formula 1, other niche sports are gaining popularity among people in India
Bouquet Partnering with other big size bouquets will help the channel to penetrate in the regional and
national markets at a lower carriage fee.
Outsourcing Outsourcing non-core activities will reduce the cost. In the present budget, HR department cost
is included
Celebrity Factor
Big names (anchors/reporters, producers and executive producers) may be roped in the sports channel to make it popular before its launching. Stories in print and web media may be pitched to make it popular just before the launch.
Collaboration Collaboration with foreign content provider or sport channels will help the company in content management and availability.
25
Thank you