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NDTV looks to cable digitisation to hit profitability

Indian broadcaster New Delhi Television (NDTV) forecasts it will become profitable in the financial year beginning April 2012, thanks to the mandatory digitisation of the country's cable TV network.

"Cable digitisation is probably one of the most significant steps that has been taken in a long time," Vikram Chandra, chief executive of NDTV told Reuters.

"We expect a boost to our subscription revenue from this new law but I think the bigger immediate impact will be on carriage fees."

Cable signal piracy and subscriber under-declaration by cable operators has been rife during the period of analogue TV distribution in India.

With a fully digital nationwide cable network now set in statute for the end of 2014, transparency over the true number of customers receiving each channel should enable broadcasters to receive greater subscription income.

Digital technology also offers greater capacity for multi-channel distribution across networks, which should enable broadcasters to pay lower carriage fees to cable operators – currently said to account for between 30-40% of their total costs.

Broadcasters had not received a fair share of their subscription revenue with analogue cable and had to disproportionately depend on advertising to cover the shortfall, Chandra told the agency.

"Our immediate target is to get back to profitability. Last quarter, we hit operational profitability and we are hoping next fiscal year we should be profitable," he said.

The broadcast group's portfolio includes English news channel NDTV 24*7, business news channel NDTV Profit, and Hindi news channel NDTV India.

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