December 2014

DISCOVERY QUITS ONEALLIANCE


Discovery Communications Has Decided To Exit Its OneAlliance JV With Multi Screen Media

The writing was on the wall for a long time, and the law was nudging it to shut down. Finally in mid-November, news was leaked to the press that Discovery Communications India, was exiting its 12 year old joint venture with Multi Screen Media Private Ltd.

The joint venture is MSM Discovery, which distributed Pay Channels from Multi Screen Media Private Ltd. (MSM), Discovery Communications India and TV Today Networks Ltd. under 'TheOneAlliance' banner.


MSM DISCOVERY

MSM had a 74% stake in MSM Discovery. The balance 26% was held by Discovery Communications India.

India & TV Today did not have any stake in the JV, and has decided - atleast for now, to let its channels be distributed along with the MSM (Sony) bouquet of channels.


MSM Will Continue To Distribute TV Today Channels


 



ALL FALL DOWN

With the TRAI disallowing the bundling of TV channels across broadcast companies, this outcome was almost inevitable.

The break-up of MSM Discovery, to be formally announced soon, brings to an end the old era of un-holy marriages between broadcasters trying to coerce higher revenues and compulsory carriage of channels on CATV and DTH platforms.

MediaPro Enterprises, the goliath giant of such couplings, was the first to end, with Star India and Zee parting ways in April this year.

IndiaCast Media Distribution and Disney UTV, too, ended their January 2013 JV. IndiaCast, a JV between TV18 and Viacom18, became an agent for Disney UTV channels.

The almost 12-year-old distribution JV between Zee and Turner has also tumbled. Taj Television, a wholly-owned subsidiary of Zee Entertainment Enterprises Ltd (ZEEL), now handles the distribution of all Zee and Turner channels.

On 1 April this year, Times Television Network (TTN) and Neo Sports Broadcast exited TheOneAlliance to individually handle their subscription & carriage deals.


CLOSURE DATE

MSM and Discovery are still to declare a specific divorce date. 1 January or 1 April 2015 are the most likely dates for a formal closure.


SEPARATE WAYS

MSM and Discovery have already commenced separately promoting their Pay channels.

Discovery has already commenced distribution deals with DTH platforms. Dish TV is the first negotiated contract.

For other DTH operators where MSM Discovery has a running deal, Discovery informed them that all future contracts will be negotiated directly by Discovery, for its channel bouquet.


DIFFERENCES

Besides being nudged by the law, the MSMDiscovery JV had been facing trouble from within also.

MSM had been taking home a higher than 74% of subscriptions, claiming that it had brought more channels to the table.

MSM continued to add channels and this fiscal had launched its second Hindi movie channel Max 2 and a Hindi general entertainment channel (GEC) Sony Pal.

Based on these new properties, MSM is believed to have asked to raise its revenue share to 88%. This was the last straw for Discovery, who decided to exit.


DISCOVERY BOUQUET

Discovery too has been growing its infotainment bouquet over the years. Today, in India it has a portfolio of 11 channels including 8 Standard Definition (SD) and 3 High Definition (HD) channels. These are Discovery Channel, Discovery Channel Tamil, Animal Planet, TLC, Discovery Science, Discovery Turbo, Discovery Kids, Investigation Discovery-ID, Discovery HD World, Animal Planet HD and TLC HD World.

According to a source, Discovery earned subscription revenue of around Rs. 225 crore as part of its revenue share from MSM Discovery in FY14. It will need to retain atleast this much, without losing substantially to carriage fees.

Discovery has started beefing up its affiliate sales team. In July this year, the company recruited former ESPN Star Sports COO Vijay Rajput as advisor commercial operations.

If rumours are to be believed, a key distribution person who has exited Star TV India, is likely to head the new distribution team at Discovery.