DTH will eat into C&S growth by 2010, says Dish TV CEO

“DTH subscribers will eat into a big piece in cable and satellite (C&S) growth by 2010,” says Sunil Khanna, CEO of India’s only direct-to-home (DTH) platform, Dish TV. Although the potential of other alternative distribution systems such as digital cable or IPTV cannot be ignored, Khanna is particularly bullish on the prospects of DTH.

According to UBS estimates, C&S subscribers will grow from 5.3 crores (in 2006) to 7.7 crores in (2010), and DTH subscribers will grow from 20 lakhs (2006) to 1.1 crores (2010). At the same time, the DTH industry’s revenue size will grow from Rs 3,800 crore to approximately Rs 40,000 crore. The estimates include Sun TV and the TATA-STAR venture Space TV.

Khanna is hopeful that by 2010, DTH will eat up a share of C&S population. According to him, the number of present C&S consumers without a set top box (currently all C&S consumers are without a set-top box except for in Chennai – the only city where CAS is implemented) will decline by 2010 and people will move to alternative modes such as digital cable or DTH or IPTV.

Reasons for such bullish expectations are many. First, not all consumers are satisfied with the service provided by cable operators. DTH, on the other hand, eliminates the middle-man. Second, the capacity of the existing carriers is about 65-70 channels, while Dish TV already carries 150 channels and has the capacity to add many more channels. The limited bandwidth of cable television not only reduces the choice for consumers, but it doesn’t even provide a subscription-driven revenue model for niche channels. As per UBS estimates, subscription fees for channels in India is the lowest.

Does that imply that all such unsatisfied consumers are ready to migrate to an alternative mode of television distribution? Media planners aren’t so sure.

A Delhi-based media planner says, “There are serious doubts on how many unsatisfied customers will move to a DTH platform. The reason behind this is the high entry cost.”

In fact, high entry cost has been one of the biggest obstacles in DTH’s popularity. Khanna says, “We are aware of this and have made serious efforts to cross this barrier by lowering our entry cost. The results have been overwhelming.”

He claims that while a month ago – before Dish TV brought down its entry cost to Rs 3,990, which also includes the subscription charges for a year – the ZEE enterprise was selling only 350 activations per day; it now sells 2,000 activations per day. Khanna is confident that the number would grow to 3,000 in a few months.

However, pricing is not the only obstacle in front of DTH. The biggest hurdle for this service is non availability of content. For instance, in spite of a TRAI regulations, the STAR and the One Alliance bouquet have denied content to Dish TV. If this is not sorted out amicably, even STAR’s DTH enterprise – Space TV – will face a blockage from competitors.

Hiren Pandit, general manager, MindShare Mumbai, says, “For most of the Indian viewers, the concept of television revolves around mainly general entertainment channels. And the three channels – STAR Plus, Sony and ZEE is a must for them. So, unless the DTH operators resolve this issue, this platform will not grow.”

Pandit adds, “DTH cannot survive on niche channels as the subscribers for these channels would be very few. In addition, the advertisers’ interest will also not grow without the general entertainment channels.”

But Khanna is hopeful that these differences would be sorted out soon because the government has put a clause in the DTH license that broadcasters who have denied content cannot beam it on any DTH platform.

The availability of the popular general entertainment channels on all DTH platforms will also be a boon for the consumers. An industry expert says, “There is a possibility of a price-war in this condition, which will help the entire industry to grow. The only differentiation could be exclusive rights with foreign channels, for which the consumers will ready to pay a premium price.”

Jagjit Singh Kohli, director, Broadband Pacenet – one of the pioneers of cable television in India – says, “Although other platforms such as IPTV or HDTV are technically far superior, they are still not a commercially viable option in the country. According to him, digital cable television will grow very fast in the near future along with the DTH.

Meanwhile, TAM media Research has also announced that it is technologically ready to meet the new broadcast environment in the country. LV Krishnan, CEO, TAM Media Research, says, “All broadcasting platforms are likely to coexist in the Indian market. The service provider could be a DTH /KU band satellite or broadband through cable/telephone lines. Irrespective of any such delivery platform, TV viewership can now be measured through our digital peoplemeters – TVM 5.”

N Sampath, managing director, PanAmSat India, the global video and data broadcasting services via satellite and fibre, discloses a different picture altogether. He cites the example of DirecTV – the largest DTH distribution network of the world – which in spite of having a subscriber’s base of 8 million and a turnover of $10 billion in a year – is still in red. The cost incurred to run a DTH platform is huge. “How long can the DTH players survive in a price sensitive market such as India is really a million dollar question,” he says. © 2005 agencyfaqs!