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MUMBAI:
A new survey featuring updated forecasts from Hong Kong-based
Media Partners Asia (MPA) predicts that the Indian television
industry will grow at an average annual rate of 16 per cent
to generate more than $11.5 billion in annual revenues by
2012 versus $5.5 billion presently.
MPA
predicts that the total TV industry revenues could ultimately
reach close to $19 billion by 2017.
Subscription
revenues could climb from $3.8 billion at the end of 2007
to reach $7.8 billion by 2012 and $12.3 billion by 2017. Key
drivers include the increasing deployment of new digitised
pay-TV distribution systems through direct-to-home (DTH) platforms
and also through cable networks, as well as the continued
expansion of analogue cable television distribution.
Digital
pay-TV subscribers, including cable, DTH and IPTV could grow
to 38 million by 2012 and 57 million by 2017.
Because
of price regulation as well as intense competition on price,
MPA models slow growth in average monthly revenue per subscriber
with fees climbing from $4.1 in 2007 to $4.9 by 2012 and $6.3
by 2017.
MPA
says TV advertising will be fuelled by economic growth and
increased cable TV penetration but predicts TV’s share
of the overall ad pie to come under threat in the long-term
through the growth of out-of-home media, online and radio.
TV had a 42 per share of the advertising pie in 2007 with
advertising growing by 19 per cent to reach $1.48 billion.
MPA sees TV advertising growing at an average annual rate
of 19 per cent between 2007–12 to reach $3.5 billion
by 2012. TV advertising could ultimately reach $6.3 billion
in net terms by 2017.
MPA
has downgraded estimates on subscription revenues for TV channels
by around $1 billion due to the effects of price regulation
and the emphasis on lower content spend by emerging digital
pay-TV platforms.
Currently,
close to 15 per cent of the TV industry distribution pie is
fed through to TV channels. The
MPA sees this growing to more than 20 per cent by 2012 and
21 per cent by 2017, which still represents a robust revenue
stream in the longer-term with channel fees growing from $0.5
billion in 2007 to reach $1.6 billion by 2012 and $2.6 billion
by 2017.
At
the same time, MPA has upgraded its estimates on advertising
growth due to a robust economy and the long-term effects of
an expanding subscriber base for cable & satellite television.
Advertising
to still dominate broadcasters revenue: Broadcasters generated
$2 billion in aggregate revenues in 2007, a big pie but one’s
that fragmenting rapidly with the launch of hundreds of new
TV channels including new offerings in key ad spend categories.
Distribution costs are increasing along with marketing and
content expense, lowering margins and earnings visibility
not only for new entrants but also certain incumbents.
Nonetheless
the MPA sees the broadcaster revenue pie growing rapidly to
top $5 billion by 2012 and reach close to $ 9 billion by 2017.
This will make India still the leading Asian market for pay-TV
content suppliers and pay-TV channels. Around 70 per cent
of channel revenues will still come from advertising in the
long-term.
TV
Distribution Market: MPA
sees the market for pay-TV growing from 82 million homes at
the end of 2007 to 137 million by 2012 and approx. 164 million
by 2017. This means that household penetration could climb
from 64 per cent in 2007 to 82 per cent by 2012 and 85 per
cent by 2017.
Cable
will have 67 per cent of TV homes by 2017; DTH pay-TV, excluding
DD Direct, 17 per cent; and IPTV, 1 per cent.
MPA
has recalculated its digital pay-TV distribution forecasts,
based on net subscribers as opposed to gross numbers, which
are currently being used by DTH operators. This calculation
incorporates analysis of subscriber churn on both digital
DTH and cable networks.
With
this methodology, MPA estimates the total market for digital
pay-TV (DTH, mandated Cas and voluntary Cas) at approximately
four million subscriber homes (DTH, 3.2 million; cable, 0.8
million). MPA sees this digital base growing to 38.2 million
by 2012 and 57 million by 2017.
This
means that 30 per cent of television homes in India will have
digital TV by 2017 with 55 per cent still on analogue. By
2017, 32.3 million homes will get digital pay-TV through DTH;
22 million through cable; and less than three million through
IPTV.
China, MPA forecasts, will have 185 million digital subscribers
by 2015. But the vast majority of Chinese digital homes will
be subscribers to free-to-air TV channels through utility
cable networks. China is expected to have only 43 million
digital pay-TV subs by 2017, which means that India, with
57 million addressable digital subscribers, will remain the
largest accessible pay-TV market for media owners, distributors
and investors.
Cable:
The long-awaited consolidation and digitisation of India’s
analogue cable infrastructure is facing a challenging environment
as financing for green-field distribution projects is becoming
harder to source and the per subscriber valuations for last
mile local cable operators remain high. Additionally, multi-system
cable operators competing for acquisitions and subscribers
in key overlapping areas, increase the price of valuations.
MPA
further forecasts show digital cable subscribers growing to
12.5 million by 2012 and 22 million by 2017.
According
to MPA, cable TV ARPUs (total) will be $5 by 2012 and $6.2
by 2017.
DTH
: MPA believes that the DTH market will consolidate from
six would be operators in 2008/9 to three platforms in the
long-term. We expect aggressive subsidies and customer acquisition
to drive the DTH proposition and see limits to ARPU growth
in the short-term but no limits to losses. As a result, those
comfortable with long-term balance sheets are likely to prosper:
these include Reliance, Bharti and Tata Sky.
The
company sees DTH growing from a net installed paying user
base of 3.2 million at CYE December 2007 to reach 25 million
by 2012 and more than 32 million by 2017.
MPA forecasts monthly DTH Arpus climbing only from $4 in 2007
to $4.3 by 2012 but thereafter model more significant price
growth with ARPUs growing to $6.7 by 2012.
DTH
operators will be generating $2.8 billion in annual revenues
by 2017.
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