JioFiber freebies may hit multiplexes, DTH players
Premium JioFiber customers can watch movies in their living rooms the same day they are released in theatres.
Ambani shared his ideas at the 42nd annual general meeting of Reliance Industries. He has bundled JioFiber with subscriptions to leading premium video streaming services and intends to introduce a disruptive concept for watching new movies. “Premium JioFiber customers will be able to watch movies in their living rooms the same day these movies are released in theatres,” he announced.
The commercial launch of the service is set for September 5 and the monthly plans start from Rs 700 and go up to Rs 10,000.
While JioFiber has shown a promising proposition, experts feel it will not disrupt the media industry the way Jio had disrupted the telecom sector.
“Pricing (of JioFiber) is attractive but not jaw-dropping and hence, all other broadband players will not have to shut shop tomorrow,” said Rohit Dokania, senior vice-president for research at IDFC Securities. He, however, added that one has to wait and see what is being offered in the Rs 700 plan.
“It is possible that Viacom18 bouquet of pay channels, including Colors, could be bundled free of cost in the basic fibre plan. This seems generally good for broadcasters as they will get another content re-distributor. But we need to keep an eye on the terms of content-sharing agreement and they shouldn’t be dilutive versus existing contracts. We continue to have an outperformer rating on Zee Entertainment Enterprises (ZEE) and Sun TV Network,” Dokania said.
Prior to the launch, there were concerns that JioFiber will bundle TV services with broadband, which will affect the subscription revenues of channels. Such fears are nullified now.
Rajiv Sharma, co-head of institutional research at SBICAP Securities, said that JioFiber not bundling broadband plan with TV services is positive news for TV broadcasters.
“I don’t see any value destruction in TV service. Having said that, there is a strategy of acquiring subscribers through hardware, which will put pressure on DTH players like Airtel and Tata Sky,” he said.
Direct-to-home (DTH) players might be hit as their premium subscribers, who are also paying separately for the broadband services, could be lured away by the combination of high-speed broadband, free unlimited calls and TV services at a comparatively cheaper price.
“Premium DTH players like Tata Sky and Airtel will have a lot to worry as they both have TV and broadband business at a relatively higher price. They may see an exodus. It won’t be very negative for Dish TV though, which has 65% of subscribers in the non-Urban areas,” said a top executive of a DTH company.
However, it is the multiplexes, which might see a loss of confidence from the shareholders’ end because of negative sentiments, feel some experts. “First-day-first-show movie release seems too ambitious as theatres demand an eight-week exclusive window. We will have to see how Jio will circumvent this issue. So, sentimentally, the announcement is negative for PVR and Inox Leisure, but we are not worried yet,” Dokania said.
INOX Leisure said in a statement that producers, distributors and multiplex owners in India have mutually agreed to an exclusive theatrical window of 8 weeks, between the theatrical release of a movie, and release on any other platform. This exclusive theatrical window is a model that is followed internationally, in order to ensure the robust financial viability of all the segments of the sector, and has been replicated in India.
Meanwhile, the announcement showed a little drift from Jio’s strategy stated earlier in terms of content creation. “Clearly, they are not going to focus on content creation themselves, but will go for content partnerships,” Sharma of SBICAP Securities said.
ET had first reported on June 24 that Reliance Jio Infocomm’s content plans, including the acquisition of original Web series and films, appear to be in the slow lane.