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TRAI tariff order's impact on DD Free Dish's growth

DD FreeDish can garner 50 mn subscribers, FICCI-EY report said

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MUMBAI: Prasar Bharati run direct-to-home (DTH) platform DD FreeDish’s success is evident from the estimated number of subscribers it boasts of. The free-to-air (FTA) DTH service, experts believe, commands close to 30 million subscribers, which could shoot up post TRAI tariff order’s implementation, the 2019 FICCI-EY report points out.

According to the report, DD FreeDish has the potential to breach the 50 million subscriber mark if broadcasters continue to provide pay content on the platform.

Another interesting point worth mentioning here is that the report suggests lower end consumers will increasingly shift to the free platform or even use it for their second television connection as a result of the new tariff regime.

Last year at the Video and Broadband Summit, Doordarshan director general Supriya Sahu stated that FreeDish is not only used by a marginal section of the society but is also evolving as an alternative option for consumers. An older report of consulting firm EY predicted that the number of DD FreeDish subscribers is bound to cross 40 million by 2020.

While the experts Indiantelevision.com spoke to were optimistic about the potential for robust growth, they seemed sceptical about the scale.

Elara Capital vice president Karan Taurani did not agree with 2019 FICCI-EY report's observation about FreeDish, especially the figure of 50 million. Taurani rejected the possibility of a second home connectivity, adding that mobile is going to be the second screen for consumers. He said content consumption increment is happening on digital platforms.

PricewaterhouseCoopers (PwC) partner and leader, media and entertainment Frank D’Souza, however, believes there is some merit to the argument.

“Now the question is how many households who can get multiple connections will choose OTT rather than adding one more TV connection- that is little debatable. But the first argument has merit –lower-end consumers may shift to DD Free Dish. But the question is, will lower-end consumers be able to have multiple connections due to lack of physical space availability?” he asked.

Travelxp CEO Prashant Chothani said the growth of FreeDish has so far been propelled by free content only. Now, however, major broadcasters have pulled off their content from the platform, he highlighted.

The report also says that if large broadcasters continue to keep their content off the platform, television advertising revenues would be impacted and FreeDish’s future will be determined by the number of new channels that sign up on the platform.

“FreeDish generated an estimated Rs 20 billion of advertising revenues. In February 2019, large broadcasters removed their channels from this medium and this could impact our ad revenue forecast by Rs 10-20 billion in 2019,” the report adds.

Earlier this year, Prasar Bharati board gave a green signal to e-auctioning of DTH slots on DD FreeDish which was arbitrarily called off in October 2017. The first e-auction after recommencement witnessed intense competition. Under the revised guidelines, a total of 40 MPEG2 slots were successfully sold while the estimated revenue from the sold slots is Rs. 395 crore.

The FICCI-EY report also adds that regional, news and niche channels, especially those impacted negatively by the TRAI tariff order, are bound to build their audience through FreeDish (subject to auction base prices).

Industry experts, however, see things different in case of niche channels.

“I don’t know how much they will try and do that because the market for niche channels is different and the people who are going to access DD Free Dish – the consumer is different. It may not fit the target segment of such channels,” D’Souza argued.

According to Chothani, niche channels don’t see DD FreeDish as a viable option and are not going to jump on its bandwagon.

In addition to that, he also pointed out that niche channels won’t be negatively impacted by the new tariff order. According to the 4k pioneer, niche channels will benefit from the new regime because consumers won’t shy away from paying for good content.

“One of the fundamental premises of new tariff order is also to bring transparency in the system. Consumers’ habits build over time and also change. If they want to see the content which they were seeing earlier and now they are not getting because of NTO, in due course of time, they may subscribe. If the content is strong enough they will subscribe,” he opined.

Taurani said niche channels opting for DD FreeDish remains a possibility mired in a couple of constraints. Apart from limited slots, what could also deter niche channels from staying off FreeDish is the high carriage fee.

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