The ARPU dilemma

GOA: Cable TV networks need not focus on charging higher subscription rates from consumers in the early period of digitisation but revenue upswing during this period will come from the second and third TV sets, according to Den Networks CEO S N Sharma.

“There is sufficient scope to charge more from subscribers but we need to be patient. We are already burdening the consumer with a hardware (set-top box) price. For the first 6-9 months of digitisation, we (MSOs) will see additional income coming from the second and third TV sets (which is normally an income that the MSOs do not get in analogue cable). ARPUs (average revenue per user) have stagnated for over two decades and we don’t see any immediate change in this,” Sharma added.

The scramble for pushing all the channels on the basic package of cable networks will not help ARPUS move up. “How will they see any rise if the broadcasters want to place all their channels on the basic tier? ARPU is the most significant four-letter word and will have to move up,” said Media Network & Distribution (India) Ltd. managing director and CEO Yogesh Radhakrishnan.

ARPUs is in the hands of the MSOs. “Packaging is very, very key,” Radhakrishnan added.

Videocon d2h deputy CEO Rohit Jain believes that tiering of channel packages that are sold to subscribers would help lift ARPUs. “While DTH had these packages, cable never had them. With digitisation of cable TV, both will now have packages. Once that happens, we will see ARPUs change,” he said.

Broadcasters should also realise that they can’t have the same strategy towards advertising while insisting that subscription revenues should see substantial jump in a digitised distribution environment. “If they want to place most of their channels on the
basic tier because they want reach to protect their advertising interests, then ARPUs will never go up,” Jain explained.

According to IndiaCast Media Distribution Group CEO Anuj Gandhi, there is an anomaly in the existing system. “Let’s face it, the bulk of the revenues will still come from advertising. As a content aggregator, you segment your channels in some way. Mass channels will want to be on the basic tier. Some channels like kids and news will always be on the borderline; these will fight for either placing them on a base or on a lower pack. It will vary between deal to deal,” he said.
Agrees Media Pro Enterprise India COO Gurjeev Singh Kapoor. “The bulk of the strong channels will be on the basic tier,” he said.

The growth of HD channels will boost ARPUs, “We are getting ARPUs of $6-8 from these homes, double that of the SD channels. The break-even cycle for these is one and a half years. But it is just a 2012 phenomena and the base is very small to make any difference in the marketplace at this stage,” said Jain.

Hinduja Ventures president Tony D’Silva said that the battle at this stage shouldn’t be on upping ARPUs. “The success of digitisation will depend on what kind of content the consumer is getting and at what price. Let us roll out digitisation first. We shouldn’t start getting resistance from consumers on pricing issues at this stage,” he warned.

Latest Reads
India, China to propel APAC, beat CAS Europe market share

APAC is expected to overtake the market share of Europe in future due to an increasing demand for digital TV set-up boxes in countries such as China and India. North America and Europe dominated the global CAS market in 2015. APAC region is estimated to mark a growth rate of 12.0 per cent CAGR...

Technology Hardware Set-top Boxes
India lucrative market for 4K UHD STBs: Grand View Research

Here’s a view on the demand for 4K or ultra high definition (UHD) set-top boxes (STBs) in India.

Technology Hardware Set-top Boxes
Infor appoints Dass as south Asian subcontinent V-P

Infor, a leading provider of business applications specialized by industry and built for the cloud, has appointed Ashish Dass as the vice president and managing director for the south Asian subcontinent. Infor software helps eliminate the need for costly customization through embedded deep...

Technology Software Applications
Siti & DishTV opt for Conax conditional access

The Essel group has been using Conax’s tech for sometime now for its Siti Network (earlier known as Siti Cable). Now the group has extended that partnership for another product for both Siti Network and DTH operator Dish TV India. This time it is for the cardless set top boxes that the two are...

Technology Hardware Set-top Boxes
Imagine Communications extends functionality of Selenio One unified transcoding platform to OTT

MUMBAI: Imagine Communications, empowering the media and entertainment industry through transformative innovation, today introduced a high-density adaptive bitrate (ABR) transcoding product built on Selenio One™, the company’s software-defined linear transcoding platform. Selenio One is designed...

Technology Hardware Components
DJI Makes Your Smartphone Smarter with the New Osmo Mobile

DJI, the world leader in creative camera technology, Thursday launched the Osmo Mobile, an extension for smartphones that turns them into intelligent, precision camera systems.

Technology Hardware Components
Prime Focus Tech gets funding from PE firm Ambit Pragma

MUMBAI: Prime Focus Technologies (PFT) – the technology offshoot of media services company Prime Focus - informed the Bombay stock exchange today that it had received its first round of funding from growth capital private equity fund Ambit Pragma.

Technology Software Applications
Three new products developed by C-DOT launched on its Foundation Day

Communications Minister Manoj Sinha today expressed the hope that 100,000 Gram Panchayats (GPs) will be connected through Optical Fibre Cable (OFC) by March next to set up a network infrastructure to serve the rural masses.

Technology Hardware Distribution
Genpact and BITS partner to build talent in the field of analytics

Genpact (NYSE: G), a global leader in digitally-powered business process management and services, today announced a partnership with premier technical education university Birla Institute of Technology and Science (BITS) for offering training programs in the field of analytics.

Technology Software Middleware

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories