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HBO: In toll TV bet, a different game of thrones

Source : BUSINESS_STANDARD
Last Updated: Fri, Dec 07, 2012 07:42 hrs

pFor the first time in India HBO Asia will be launching two premium movie channels based on the subscription model The company which expects to launch the channels &mdash HBO Defined and HBO Hits &mdash in two months is betting big on the digitisation programme and wants to get the early-mover advantage in the premium segmentppThe company has partnered Eros International for the content of the ad-free channels Hindi movies provided by Eros would form 30 per cent of the content the rest will be from Hollywood studios like Paramount and Time Warner The channels will be available in standard definition and high-definition Those will also have Hindi feed There are plans to have multiple languages feed tooppThe alliance will also develop HBO&rsquos existing formats for India as well as create original content for domestic market and distribution abroadpptable width400 cellpadding2 tbody tr height20 styleheight 15pt td width64 height18 bgcolor95acb3 stylewidth 48ptfont size2 faceTahoma colorffffffstrongTUNING INstrongfonttd tr tr height20 styleheight 15pt td height1 bgcolorccd7dd ul lifont size2 faceTahomaTime Warner&rsquos HBO to launch two premium movie channels &mdash HBO Defined and HBO Hitsspan stylemso-spacerun yes spanfontli lifont size2 faceTahomaThese will be the only ad-free TV channels in Indiafontli lifont size2 faceTahomaBBC Worldwide&rsquos children&rsquos channel CBeebies launched 2 May 2007 was ad free but shut last month as the economics didnt work outspan stylemso-spacerun yes spanfontli lifont size2 faceTahomaOf the 821 TV channels permitted in India 419 are non-news and current affairsfontli lifont size2 faceTahomaTotal subscription revenue for broadcasters projected at Rs 6200 crorespan stylemso-spacerun yes  spanfor 2012 growing at 30 CAGRfontli ul td tr tbodytableppWhile the launch date and pricing are to be finalised Jonathan Spink CEO HBO Asia said they were negotiating with direct-to-home DTH and digital cable players for carriage of the channels &ldquoWe would like to offer the channels in a bundle for around Rs 100 a month per home&rdquo he said When asked if the price was too steep Spink said entertainment in India was very cheap &ldquoThe timing is perfect for these channels as conumers are getting rich and willing to pay for the right content At the same time what they are paying is ridiculously cheap In some Asian markets HBO channels are available at 10 a month Even in Sri Lanka HBO we charge 4 a month per subscriber So I think Rs 100 is the right price&rdquo Spink addedppIn mature Asian pay-TV markets HBO runs five international channels and one Asian channel In India HBO runs one movie channel while Time Warner the parent company also runs a library channel WBppSpink refused to comment on WB but said HBO would continue as an ad-supported channel &ldquoWill we launch more channels in India We have not decided as of yet&rdquo he saidppIndian movie market specially English is a tough one with four major players &mdash Star Movies HBO Movies Now and Pix While Star Movies leads the genre by far there is intense competition among the other threeppSo is this why HBO collaborated with Eros Answers Kishore Lulla executive chairman of Eros International &ldquoThis is a win-win game for both parties The two channels will mainly premiere movies on television for the first time We are creating an exclusive four-six week movie airing window between theatrical release and TV premiere I am sure the consumer will like it&rdquoppOn revenue sharing while Spinks declined to comment Lulla said Eros would get 35-40 per cent of the profit marginspp&ldquoThere is a huge upside for us and our Indian shareholders While we produce 70 films a year Hindi and other regional languages we will give 10-20 to HBO on an exclusive basis for the limited window Our total share from the channels&rsquo net income will be close to 35-40 per cent&rdquo Lulla explainedppEros is expecting that in 2-3 years the total digital subscribers will be 175 million in India and out of which at least 10 per cent will opt fot the two channels &ldquoThe average in other Asian countries is 25 per cent but even if we get 10 per cent of the digitalised subscribers the upside is huge&rdquo he saidppAs per FICCI-KPMG report on Indian Media and Entertainment Industry the subscription revenue for TV channels is poised to grow at a CAGR of 29 per cent between 2011-16 It is expected to fetch broadcasters Rs 17600 crore by 2016ppWhile HBO has finally taken the step of following the same business model that it follows in US and other countries it will still take some time for an Indian consumer who is used to pay Rs 150-200 per month for over 120 channels to pay Rs 100 for just two channels The mind set is the main reason why there are no players following just subscription modelppThe only other channel which was completely subscription driven was BBC Worldwide run kids channel Cbeebies which the company dicided to close last week November 30 after not being able to make moneyppIndustry observers feel there is still time for such channels to succeedp


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