DTH operators wooing subscribers into HD

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By Vishaka Chakrapani Posted on : 12 Mar 2014 02:40 pm

MUMBAI: A recent study in the US revealed that nearly 60 per cent of homes in the country have one or more high-definition (HD) TV sets; a significant rise from just 35 per cent five years ago.
 
In India too, HD TV viewing is on the upswing - though not as big as in the US yet - with two DTH operators having recently added a slew of HD channels to their bouquet to take the total tally of HD channels to over 25. So much so, DTH operators are confident that the demand for HD TV will only grow from here onward.
 
“More than 50 per cent of new customers are buying HD TVs and the other 50 per cent, who are buying SD boxes, will after a while come and say that they have upgraded to HD TV sets. Would you have thought of this scenario two years ago?” says Tata Sky CEO Harit Nagpal.
 
Videocon d2h CEO Anil Khera echoes similar thoughts. “Close to 8 per cent of our subscribers have taken HD packs. Interestingly, almost double of these have taken our HD boxes in anticipation of their future transition to HD services,” he says.
 
Not so long ago, Videocon had declared it crossed 10 million subscribers.
 
To leverage the growing interest in HD, DTH operators have come up with innovative techniques including advertisements, pricing and packaging of HD channels to make customers opt for their HD service packs
 
For instance, Dish TV ensures it does not have floating subscribers, so only if a customer opts for an HD pack will he/she be provided with an HD set top box (STB). Customers are not allowed to jump between SD and HD packs.
 
On the other hand, Tata Sky subscribers have to pay just Rs 125 above the pack price to avail both SD channels and the channels in the pack which have an HD version. From 1 November, 2013, Tata Sky has stopped ordering SD boxes and is offering HD boxes at the same price as SD boxes at Rs 2,000 per piece. Currently, it has about 2 million subscribers with an HD connection.
 
Like Tata Sky, Videocon d2h too is offering SD and HD boxes at almost the same price. While an SD box costs Rs 1,990 with a one month free view, the HD box costs Rs 2,000 without a free view. “Subscribers are taking to HD viewing very well. They are increasingly opting for bigger screens at home and HD feeds for a better viewing experience. We expect that in the next few years, HD viewing will account for almost 20 per cent of the total viewership,” says Khera.
 
For Airtel Digital TV, it is about striking a balance between the HD and SD consumers. 
 
More importantly, HD subscribers imply more revenue. “Revenue from an HD subscriber today is almost 10 per cent. However, this has potential to grow up to 35 to 40 per cent of our revenue base in a few years’ time,” says Khera.
 
According to Nagpal, as and when regional channels start broadcasting in HD, the subscriber base may go up. “HD packs increase as channels get added. Initially, only knowledge and sports channels were available in HD. The next level will be with regional channels. Sun Network has already taken the initiative,” he says.
 
With Dish TV, currently, 7 per cent of its revenues come from HD subscribers. However, Dish TV CEO RC Venkateish feels that the price of an HD TV set, which is nearly three times that of an SD TV set, could be a deterrent.
 
While it’s a long road ahead, DTH operators anticipate that the future will see HD TV viewing increase by a substantial amount, thus also increasing Average Revenue per User (ARPU). Khera feels it is possible that in a few years from now, Videocon (like Tata Sky) may stop selling SD boxes altogether.

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