Technology

Indian C&S ad market to surpass China by 2017: MPA

MUMBAI: The Indian local cable & satellite advertising market is set to surpass China and lead the Asia Pacific region by 2017 as it settles at $5.6 billion in net revenues, according to a forecast by Media Partners Asia (MPA).


The pay-TV advertising market is expected to grow at an average annual rate of 17 per cent over 2010-2015, driven by the economy, the positive impact of category competition and rate increases implemented by TV networks. 
 
Titled ‘Asia Pacific Pay-TV & Broadband Markets 2011‘, the report said the pay-TV subscription revenues is set to grow at a 12 per cent CAGR over the same period to reach $8.4 billion by 2015, driven by DTH and digitisation of cable networks.


The report also predicted the six-player Indian DTH (direct-to-home) market to overtake the United States next year, to become the worlds largest DTH market in volume terms, with an active subscriber base of close to 42 million, as against a projected customer base of 35 million in the USA.


The report noted that four out of six DTH players will be generating free cash flow after 2015, driven by scale and cost control. The US market has two dominant and profitable groups competing in that market.


Also, total pay-TV subscribers are expected to reach 166 million by 2015 and 190 million by 2020.


MPA clarified that projections measure pay-TV penetration after accounting for households that opt for multiple services (i.e. cable and DTH). On this basis, pay-TV penetration will grow from 79 to 88 per cent between 2010 and 2020. DTH will be the main driver of subscriber growth, digital penetration and HD growth.


However, the active DTH subscriber base (i.e. paying customers only) will grow from 23 million in 2010 to 64 million by 2015 and 83 million by 2020, implying a 44 per cent share of the overall market by 2020.


The main challenges are transponder capacity, high churn, subscriber acquisition costs and limited pricing power.


MPA executive director Vivek Couto said, “India remains Asia‘s largest pay-TV market opportunity in which revenue, cost and capital expenditures are growing at an alarming rate due to various dynamics, including macro growth, competition and digitisation. Encouragingly, revenue growth is trending at optimum levels due to a strong economy a buoyant advertising market and the rapid growth of DTH. Yet, such is the extent of competition, cost and fragmentation that profit margins remain low, even for market leaders. We expect margins and value chain economics will improve in the long term, through digitisation of cable networks, rising subscriber scale, improved cost control and strong advertising growth. Pricing power for pay-TV services will still be modest however, as ARPU growth will remain under pressure due to competitive and regulatory dynamics.”


Three Indian companies - Sun TV, Zee and Star India - dominate the top 10 profit rankings for Asian pay-TV broadcasters. However, distribution platforms are yet to feature in the operator mix due to limited profitability, the report said.


Meanwhile, citing some concerns over the margins, MPA said that margins across the India pay-TV industry value chain are amongst the lowest of any emerging market. It said the reasons of this are cost inflation, competitive pressures, regulation and a reliance on legacy analogue cable networks.


“Margin pressure will remain in the medium term but improve in the long-term as operating leverage improves,” the report said.


Broadcasters generated $2.9 billion in sales during 2010, up 18.5 per cent year-on-year, driven largely by advertising growth. However, average operating margins remain sub-optimal at less than 15 per cent, due to continued cost inflation.


“Competition is intense, as there are 550 channels in the marketplace despite limited spectrum on dominant analog cable networks. As a result, carriage and placement fees continue to grow for new entrants and, in some cases, existing players,” the report said.


According to MPA analysis, the carriage fee pool topped $400 million in 2010, while total affiliate fees for channel suppliers on cable (i.e. excluding DTH) reached only $425 million.


MPA also said that operating margins remain low for market leaders such as Star and Zee (Ebitda margins trending at 20-25%, versus 30-40% in other emerging Asian markets), due to escalating costs across the value chain. This level of cost inflation is unlikely to moderate over the medium term, but operating leverage may improve as affiliate fees grow from digital cable and DTH.


Broadcasters will continue to benefit through advertising growth, DTH expansion, the slow digitisation of the cable pipe, and the expansion of pay-TV audiences.


Competition and fragmentation will remain significant pressures, while affiliate fee growth will come gradually rather than overnight. MPA said it sees total pay-TV channel revenues growing from $2.9 billion in 2010 to $6.3 billion by 2015, with advertising remaining dominant.

Latest Reads

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/12/06/Navanit-Samaiyar_0.jpg?itok=fQLjKjss
HAL Robotics ropes in Navanit Samaiyar as board member and advisor

MUMBAI: HAL Robotics has roped in Navanit Samaiyar as its board member and advisor. Samaiyar has a record of setting up, scaling and transforming businesses across a very wide cross section of industries spanning from IT/ ITeS to steel, telecom, engineering goods, earthmoving machinery, logistics...

Technology Hardware Components
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/11/07/Arnab-Goswami.jpg?itok=VUCIzU8A
Republic TV launches Android app

MUMBAI: Republic TV is on a roll. From rocking the ratings chart in launch week itself to going international, the channel has added one more accomplishment to its kitty. The Republic TV Android app is now live.

Technology Software Applications
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/10/11/STB.jpg?itok=WsiaUBr8
STB cos in India, China enhancing features, providing customised solutions, Technavio enlists top vendors

MUMBAI: The global STB market is characterised by intense competition as the market is saturated in developed countries. The market share of these players is declining because of the entry of new players. The STB companies are enhancing the features of STBs and providing customised solutions to...

Technology Hardware Set-top Boxes
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/10/09/PFT.jpg?itok=VJugic3c
India's PFT Clear Media ERP suite to help US' PBS content delivery

MUMBAI: Prime Focus Technologies (PFT), the technology arm of Prime Focus, announced that its CLEAR™ Media ERP Suite has been selected by Public Broadcasting Service (PBS) to enhance their Network Operations Center (NOC) ecosystem efficiencies and sustainability, with the objective of reducing...

Technology Software Applications
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/10/09/JosephSiino.jpg?itok=doyka7Tg
Broadcasters, OTTs to gain as Via adds xHE-AAC at special rate

MUMBAI: Via Licensing Corporation, a intellectual property solutions provider, has announced the upcoming availability of Extended High Efficiency AAC (xHE-AAC) as part of the Advanced Audio Coding (AAC) patent pool. The expanded patent pool licence will be available at no additional cost to...

Technology Software Applications
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/10/06/Brian_Morris-Colin_Smith.jpg?itok=xVBB0KbV
Tata Comm to deliver Motorsport videos on global devices

MUMBAI: Tata Communications will now deliver video content for Motorsport.tv viewers' all devices over its global network. The two have partnered to power the growth of the network’s internet television platforms.

Technology Software Applications
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/10/06/ChyronHego_0.jpg?itok=qWRkJ4jh
How to create live video content sans pros, convert radio broadcast into visual show

MUMBAI: ChyronHego will be showcasing its live production, automation solutions at Broadcast India show in Mumbai in mid-October.

Technology Software Applications
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/10/03/Arvin%20patel%20tivo.jpg?itok=Ieo7eXfw
Sony renews IP licence deal with TiVo

MUMBAI: TiVo Corporation, a leader in entertainment technology and audience insights, has announced that Sony Corporation, a leader in consumer electronics, has renewed its multi-year intellectual property (IP) licence agreement. The license to TiVo’s patent portfolios covers all of Sony’s...

Technology Software Applications
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/09/30/cable-wire.jpg?itok=vJM4lI00
Digital TV, growing telecom major drivers of coaxial cable growth in A-Pac: Study

MUMBAI: The global coaxial cables market is mature owing to the use of coaxial cables in industries for a long time and the slow or stagnant product innovation.

Technology Hardware Components

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories