MUMBAI: The deadline set by the Telecom Regulatory Authority of India (Trai) for multi-system operators (MSOs) to sign content carriage agreements with television broadcasters passed on Tuesday with very few deals being inked.

The major cable TV networks have crossed the 21 August deadline carrying the load of inconclusive commercial agreements with broadcasters. Both the parties are engaged in long-drawn bargaining as the settled pricing terms will largely determine the content cost of MSOs and the subscription revenue of broadcasters in digitised India.

A related part of the pact would be carriage fees that the cable TV operators charge from the broadcasters to distribute their channels on their networks.

Crucial for meeting the government‘s deadline of 31 October for ending analogue cable in the four metros of Delhi, Mumbai, Kolkata and Chennai, the inter-connection agreements would determine the retail price consumers would have to pay for watching these channels.

MSOs have said that the slow offtake of set-top boxes (STBs) is primarily due to the absence of deals with broadcasters as they have been unable to create channel packages and their pricing structures. “When we approach our subscribers, we need to tell them what packages they can take and at what pricing. Consumers should know the products and their costs before they decide to buy. This is the basic rule of purchase behaviour anywhere in the world,” said the CEO of a leading MSO who did not want his name to be revealed.

The low STB penetration had led the government to extend the digitisation deadline by four months. Information and Broadcasting ministry had stated in early August that Mumbai looked the most prepared with 50 per cent of cable TV homes already having digital STB installations. But Delhi and Kolkata seemed to be struggling with the rate of STB installations around 25 per cent while Chennai lagged way behind.

Trai had earlier made it clear that in case of failures, it would have to intervene to decide the tariffs and carriage norms. The broadcast sector regulator had indicated that it would not tolerate further delays in inter-connection agreements.

Sameer Manchanda-promoted Den Networks is, perhaps, the only big MSO to have finalised contracts with a majority of broadcasters. Among those who have signed the commercial agreements are Media Pro which distributes the Star, Zee and Turner group of channels; MSM Discovery that has the channels of Multi Screen Media, Discovery and Neo; ESPN Star Sports; and UTV.

“We are comfortably placed with respect to commercial deals with a majority of content aggregators,” says Den Networks chief operating officer MG Azhar.

The only big broadcasting network not under the web of any deal with the big MSOs is IndiaCast, the company that distributes the TV18 group of channels including Colors. The company also distributes the Disney and Sun channels in the Hindi speaking markets.

IndiaCast was recently formed with TV18 having 75 per cent stake and media conglomerate Viacom holding the remaining 25 per cent.

“We will be announcing a few deals in very short time,” says IndiaCast Group CEO Anuj Gandhi.

Outside Den, the other big MSOs have yet to stitch their content deals. These include Hathway Cable & Datacom, Digicable and IndusInd Media & Communications Ltd (IMCL). WWIL, owned by Subhash Chandra‘s Essel Group, earlier said it has signed with Media Pro.

Incidentally, Media Pro is a distribution company floated last year by Star Den Media Services and Zee Turner and has the largest bouquet comprising 70 channels, including flagship Hindi general entertainment channels Star Plus and Zee TV. As both have equal stake in the JV, Zee gets a majority holding. In the old outfits, Star and Den each had 50 per cent stake in Star Den while Zee held 74 per cent and Turner 26 per cent in Zee Turner.

“We are in the last stages of our deals with the broadcasters. We should be able to conclude in the next few days,” says Hathway Cable & Datacom MD and CEO K Jayaraman.

Even IMCL is hopeful of concluding the inter-connection agreements with the broadcasters soon. “We are in deep negotiations. We are hopeful that we would complete them soon,” says IMCL CEO and MD Ravi Mansukhani.

The MSOs and broadcasters are being extra cautious in signing agreements that will decide their business models in the new era of digitisation. “It is important to smell better deals. Commercial agreements are not about speed but about sense,” says the head of a leading MSO on condition of anonymity.

MSM Discovery president Rajesh Kaul is optimistic that there would be no further delays in digitisation. “We have signed up two major cable networks including Den, and a host of other independent operators,” Kaul tells Indiantelevision.com.

Senior executives in Media Pro were not available for comment.

The early trend is to get more into the nature of fixed fee deals, though all kinds are taking place. The sector regulator has not allowed fixed fee commercial agreements between the MSOs and the broadcasters. “There are many kinds of deals taking place. But fixed fee agreements are easier to conclude,” a senior executive said.

Another trend is to conclude deals with the bigger broadcasters first as this will allow the cable networks to bargain with the smaller ones.

MSOs and broadcasters have sent out the details of their progress with the inter-connection agreements to Trai late Tuesday night. It remains to be seen how the sector regulator reacts to the failure by broadcasters and MSOs to meet the 21 August deadline.