DTH

FreeDish a key driver in FTA channels' growth by '20

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BENGALURU: Telecom Regulatory Authority of India (TRAI) numbers for the six private players in the DTH industry show a very poor growth rate of just 0.96 million and 5.8 million during the quarter and year ended 31 March 2017 (Q4-17, FY-17) respectively. This figure is far lower – less than one-third of the 17.38 million active DTH subscribers added in FY-16. According to an E&Y report titled ‘India’s Free TV’ released in July 2017, among the DTH operators in the country, DD FreeDish has grown to become the largest with estimated 22 million subscribers. This would make it the single largest distribution platform in India today. While there is no concrete data around it, because any customer can buy from a variety of hardware options and commence downlinking the FreeDish feed, DD FreeDish subscribers are expected to cross 40 million in the next 2 to 3 years.

The report says that this growth in subscriber base has caught the attention of both broadcasters and advertisers today. All large broadcasters, including Star, Zee, Sony and Viacom, have launched their FreeDish-based channels. The content on these channels is similar to that on the broadcasters’ general entertainment pay channels but is dated by up to a year or even less. Success of channels such as Zee Anmol (with ad revenue of approximately Rs 800 million) and Sony Pal (with ad revenue of approximately Rs 1,100 million) has led to even further channel launches by broadcasters, which have now launched FTA film channels on FreeDish as well.

Hindi news television, a segment always skewed toward FTA channels, has taken to DD FreeDish in a big way in order to protect its ad revenues and save on the carriage fees charged by distribution companies. Almost all large Hindi news channels are now on the DD FreeDish platform says the report.

The report says that several factors are working together in the current environment in 2017, which E&Y believes will lead to a significant growth in free TV viewership over the coming years. These factors include:

1.    Digitisation of cable TV distribution – DAS IV Given the regulatory push toward digitization, the government of India has mandated the total shutdown of analogue cable transmissions from April 2017. In effect, this will require consumers, particularly those in DAS III and IV markets, to make a choice – opt for more expensive cable TV options, DTH or free TV options such as terrestrial TV or FreeDish. Given that they would have to invest in hardware (a STB and perhaps also a dish), the more price-conscious customers may opt for free television services in the immediate term.

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2.    The proposed new tariff order -With the base price set by the new tariff order at a maximum of Rs130 plus tax for carriage of 100 channels, customers paying Rs150 per month or below will now end up losing access to all pay channels they were receiving. In such an event, they would have the option to either pay more to receive pay channels of their choice or decide that free television would be a better option, given the quantum of quality content on it. Broadcasters’ FTA channel strategy may impact their subscription revenues in the event the move toward free television becomes significant.

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3.    The fast growth of DD FreeDish - FreeDish currently provides over 80 channels and is moving toward 250 channels, many of whom have the same or similar content than pay channels. In addition, recent regulations classifying even more sports events as those of national importance (hence requiring them to be shared with DD) make the FreeDish bouquet formidable competition to pay bouquets.

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4.    DTT on mobile infrastructure- One interesting development relating to mobile television is the advent of digital terrestrial distribution. Since this is a broadcast technology, the key implication will be that consumers whose mobile handsets have the required antenna would not be required to pay any bandwidth charges. Consequently, once the mobile handset ecosystem matures, DTT could also provide a strong addition to free television services.

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