DTH ops gear up for HD price war

MUMBAI: India‘s direct-to-home (DTH) operators are gearing up for a cut-throat price war on the High Definition (HD) front, a service aimed at tapping top-end customers in an industry that is plagued by low ARPUs (average revenue per user).

Tata Sky, the joint venture between the Tata Group and Star, has set the ball rolling with the launch of its High Definition (HD) service at a price of Rs 2,599, the most aggressive in the DTH sector.

While Sun Direct is offering the HD set-top-box bundled with subscription package at Rs 10,000, Big TV‘s service comes at Rs 7,490 (HD with DVR technology) and Dish TV‘s at Rs 5,990.

Says Tata Sky MD and CEO Vikram Kaushik, “We were the first to break the Rs 100 price barrier, first to launch a host of customised innovative interactive service, first to launch India’s PVR and now, Tata Sky HD at an unimaginable affordable price point. Nowhere in the world has HD technology been offered at such great value by any DTH operator. Our aim is to make Tata Sky HD part of a colossal number of Indian households across the country.”

The price point will open up the market, limited at this stage by both the high cost of the HD box and the content.
Says Big TV CEO Sanjay Behl, "Though it is just the basic HD box, Tata Sky‘s aggressiveness is a welcome move as the market will expand. There aren‘t many channels available now on HD. But with a pressure on the pricing of the HD box, channels will see a potential to take this route. We, of course, are targeting the upper end of the customers at this stage as we offer HD with DVR technology."

Tata Sky‘s HD offering will include two channels - National Geographic HD and Discovery HD. "We expect more channels like Star Plus, Star Movies HD and popular sports channels to take to the HD format," says Tata Sky CMO Vikram Mehra.

Tata Sky‘s immediate endeavour is to get ESPN, the official broadcaster of the football World Cup. The DTH operator had moved the Delhi High Court but its plea was turned down. Now that it has launched its HD service, negotiations are expected to start.

"We have given our HD feed only to Dish TV for the Fifa World Cup. We are in negotiations with the other DTH service providers," says ESPN spokesperson.

In addition to lowering the entry price, Tata Sky is also lining up movies on demand that it would showcase on HD format. As part of this gameplan, Tata Sky has bought the rights of Hritik Roshan- Barbara Mori starrer Kites which will be shown exclusively on Tata Sky HD.

Says Mehra, “Our objective was to launch the service in a really mass and affordable way. We are going to break open the market with the aggressive pricing.”

Dish TV, however, does not feel that the price war has started and customers have to be cautious of hidden costs. "We are not revising our rates for HD," says Dish TV chief operating officer Salil Kapoor. 
On the content front, however, it is Sun Direct which has the most expansive offering - six channels (Colors, National Geographic, Discovery HD World, Sun TV, two regional movie channels) and an event channel.
So how does Tata Sky plan to push its HD service? During the launch phase, all existing Tata Sky subscribers can upgrade to Tata Sky HD and avail the HD Gold Pack for an entire year, absolutely free. New Tata Sky HD subscribers would be offered the HD Gold pack free for the first two months.

For the HD content, Tata Sky is going to charge an extra Rs 30 per month as subscription fee.

“The DTH model in India is that of subsidising of the boxes and retaining the customers. We are not charging exorbitant amount from our subscribers to view the HD quality content. We are also in talks with content providers and very soon they will offer more HD content,” avers Mehra.

Tata Sky HD will be made available across the country in all leading consumer electronic outlets. The service will support the 1080i picture quality, 16:9 aspect ratio and 5.1 surround sound.

Mehra claims 10 per cent of Tata Sky‘s new subscribers opt for the PVR service and hopes the response to be even better for HD. “We were first in India to launch PVR service and the box comes for Rs 6,000. Still, over 10 per cent of new subscribers buy that. With this kind of aggressive pricing and upcoming Commonwealth Games, which will be aired in HD, there should be better response,” Mehra affirms.

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