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In
the hilly state of Uttaranchal, which was formed after
breaking up Uttar Pradesh, people these days are a
happier lot as far as entertainment on television
is concerned. Plagued by poor cable TV services, residents
have lapped up direct-to-home (DTH) television with
great gusto. In fact, Uttaranchal, along with Punjab
(populated by cash-rich farmers and NRI Punjabis who
have made substantial investments in real estate),
is one of those states where Dish TV - the brand under
which ASC Enterprises and Zee market their DTH service
- is quite commonly known. "The demand from these
places is quite high," points out a Zee Telefilms
executive.
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| Direct-to-Home
technology - Too much to ask for? |
DTH
has been a technology and mode of delivery that has
been threatening to make an Indian television debut
since the past several years. Since 1997 to be exact.
More than seven years later, the KU-band DTH television
service remains a technology/ service at a very nascent
stage, which, nevertheless, has the potential of providing
a viable option for consumers dissatisfied with the
service dished out by cable TV operators.
There
are four players in the field as of today - ASC Enterprises
(a group company of the Subhash Chandra-promoted Essel
Group) with Dish TV, the Tata-Star combine's Space
TV, NSTPL (a group company of Dr JK Jain-promoted
Jain Studios Ltd) and pubcaster Prasar Bharati. Of
the four, only Dish is up and running at the moment.
While Prasar Bharati's DTH service is set for an April-May
take-off, Space looks likely to launch before Diwali
(earlier a Christmas entry into Indian TV space was
being talked of).
A
slow and cumbersome regulatory process, coupled with
precious time lost debating the standards for equipment
like set-top boxes for a DTH service (why open architecture
does not make good business sense for a DTH operator,
for example, has been an issue hotly discussed with
consensus yet to be reached) has in the past resulted
in interested players either putting their business
proposals in cold storage or having to re-work them.
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| I&B
minister Ravi Shankar Prasad |
Admits
I&B minister Ravi Shankar Prasad, "The clearances
(for a DTH service) do take a lot of time, but it
cannot be helped as there are several sensitive issues,
among them national security ones, involved, which
need careful scrutiny." According to a senior
executive of ASC Enterprises Ltd., the first Indian
DTH licence holder, the final clearance came after
rounds of discussions and clarifications spanning
more than 18 months.
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| Zee
Telefilms vice-chairman Jawahar Goel |
Participating
in an investors' tele-conference in mid-October 2003,
almost two weeks after Dish TV launched, Zee Telefilms
vice-chairman Jawahar Goel had said, "So far
we have installed 15,000 DTH subscribers, mainly in
the non-cable service area, in the north-east (part
of India), in farmhouses where there is no cable services,
or, if there is a cable service, it gives only 10-12
channels."
Though
DTH is being touted as a service that can be made
into a mass product by the players concerned, the
ground reality is that since Dish TV's October launch,
it has remained a niche service with limited penetration,
optimistic claims notwithstanding. Reason: lack of
aggressive and cohesive marketing and poor after sales
service. Not to mention diversion of attention of
the existing players because of the conditional access
imbroglio.
But
the numbers are certainly there to encourage a DTH
player even in a price sensitive market like India
and despite the steep license fee of Rs 100 million
that has to be paid to the government.
In
India, currently there are slightly over 85 million
television households (NRS 2002 figure was 80 million).
Of this, cable and satellite penetration is in the
region of 44 million households. As per industry estimates
the C&S penetration will reach 53 million homes
by 2006. By 2010, it is estimated that there will
be more than 94 million C&S households making
India one of largest cable markets in the world.
Looking
at the break-up of TV households, about 32 million
have colour TV sets, while a majority of 56 million
has black and white sets. Last year a total of seven
million TV sets were sold, of which approximately
seven per cent were 21 inches or of the "flat"
category. The television market, which has been growing
at a rate of 11-13 per cent annually, is expected
to maintain this momentum, if not up it.
According
to a Media Partners Asia forecast made recently, the
C&S penetration of about 54 per cent offers good
prospects for players interested in bringing new technologies.
The concept of multiple TV homes is gaining popularity
in urban homes (a study shows that 11 per cent of
the total C&S homes in Mumbai are multi TV homes)
and mini-metros are proliferating, a factor that again
should encourage a prospective DTH player.
Moreover,
India is a huge country with geographical diversitie
and there are several regions where the distribution
of population is scattered. A large percentage of
households in such areas is not serviced by cable
TV because of economical non-viability. A substantial
number of households in such areas also have the paying
capacity but do not have access to alternative technology,
apart from terrestrial broadcaster Doordarshan and
its fuzzy signals.
'IN
10 YEARS, DTH WILL COVER 15% OF TV BIZ'
Says Hong Kong-based Media Partners Asia Ltd's (MPA)
director of research and content Vivek Couto, "In
the long term, the (Indian) market will be able to
support a phased rollout of CAS, the expansion of
digital DTH satellite services." MPA also estimates
that in about a decade's time DTH would constitute
about 15 per cent of the total TV business.
But
this figure, some India-based observers point out,
could well be revised upwards. Simply because the
absence of any digital terrestrial service in India
- DD's experiments with digital terrestrial transmission
remains a lab experiment still - the rate of adoption
of a digital service delivered via high-powered KU-band,
and even KA band, transponders may be higher than
estimated at the moment.
In
fact, all the DTH wannabes in India are looking at
capturing around 33 per cent of the total cable TV
market within two years of its full introduction (that
is once Star and DD are fully onstream alongside Zee's
Dish).
One
key factor for DTH to take off in India, unlike in
the West, will be whether the service provider has
access to all the existing channels, or at least the
popular entertainment, sports and movie channels.
For
not every content provider is going to bite the DTH
bullet. Says Narendhra Morar, commissioning editor
of BBC World, "As a content provider, we are
open to join any new technological platform like broadband
and DTH. But before doing that we have to look at
the feasibility of that platform and whether it has
reached a certain critical level of penetration."
While
globally a typical DTH service survives primarily
on niche content, mostly led by adult and movie content
- in India availability of existing cable channels
has become a must for spelling success. One of the
reasons for Dish TV not picking up faster in urban
areas is that most prospective subscribers ask for
a list of channels and get disappointed when told
that Star and Sony channels, plus some smaller ones
like Ten Sports, are still to join the platform.
Still, if the ASC-Zee combine is busy upgrading its
approximately Rs 4 billion DTH infrastructure to accommodate
more channels, the biggest DTH blockbuster is coming
from the Tata-Star combine that is reportedly pouring
in approximately Rs 16 billion in the project for
a variety of services, including tiered TV channel
offerings and interactivity.
Though these are early estimates, the Star-Tata combine
is looking at providing the hardware for just under
Rs 5,000 (inclusive of installation charges) with
the basic tier costing around Rs 300 (all-India average)
for a package of 50 channels that would not have premium
channels (like sports or movie channels).
The
combine is also looking at over 2 million subscribers
in about 18 months time, which would mean that aggressive
marketing has to be done - something that Star has
mastered better than most. With enough experience
gained in building up the BSkyB platform in the UK
(News Corp has recently launched DTH in Australia
too), the effort would be to replicate the same success
in India.
At
the moment, the figures being bandied around by the
Star-Tata combine look fairly comparable to those
of Dish TV (the total investment in the former's case
is however higher) though the latter has hiked its
monthly subscription rates to Rs 220 per month from
Rs 100 after ESPN and Star Sports joined the platform.
What Dish TV still lacks is aggressive marketing.
While
these two players are ready to slug it out openly,
India's pubcaster Prasar Bharati, overseeing Doordarshan
and All India Radio, has aspirations of its own to
become a major player.
Having
already got the government nod for a Rs 5 billion
(over a period of five years) assistance for its DTH
project, DD is optimistic to have the KU-band DTH
platform up and running before the end of next month.
The issue of having the platform on air gains importance
for DD - and the government too - as the service is
pre-dominantly meant for those areas in north-eastern
part of the country where cable is not available and
the terrestrial network's signals are fuzzy. With
elections in N-E of India slated to be held in the
third week of April, an earlier start to DD's DTH
service would mean political advantage for the government
and some other political parties too.
As
Prasar Bharati CEO KS Sarma puts it, "Our DTH
platform would be unique and from the second year
onward, we may also look at putting a monthly subscription
to the service."
While
a DD may not be really worried about breaking even,
that is certainly an issue for the private DTH players.
The present DTH guidelines stipulate that they would
have to go in for a 10 per cent revenue sharing annually
with the government, apart from the Rs 100 million
bank guarantee that has to be given for the license
for a period of 10 years, plus the fact that over
a period of time the whole platform would have to
be moved on to an Indian satellite.
This
is one area which does not worry the ASC-Zee combine
as it has already started beaming via transponders
on the Insat satellite series and has plans to move
on to its own Agrani satellite when it gets commissioned
next year. According to Zee Telefilms and ASC Enterprises
chairman Subhash Chandra, "For DTH, we need about
250,000 subscribers to break even."
Chandra's son Punit Goenka claims that already 100,000
boxes have gone out. What is more important for him
is that the entire programming content is being provided
by Zee Telefilms' wholly owned subsidiary through
Siticable. So, Chandra points out, except for the
cost of uplinking and other sundry expenses, which
is being taken care of by ASC, at cost plus basis,
the "rest of the revenue flows back into Zee
Telefilms through Siti Cable," thus helping Zee
Tele also to maintain a healthy bottomline.
Star
and Tata on the other hand, feel that their breakeven
may take over six years. Simply because additional
expenditure would be undertaken once the DTH platform
goes on air and the service is continuously upgraded.
Even
as the DTH players get ready to fight it out in India,
there is already the threat looming from newer technologies
like broadband. Telecom companies like Reliance in
particular have the potential of throwing to the winds
all conventional business models. As industry veteran
and Hinduja TMT executive vice-president corporate
services Ashok Mansukhani aptly sums up, "The
success of DTH in India would largely depend on many
issues, including whether a Star agrees to come on
to a Zee DTH platform and vice versa. Such issues
would have financial implications too."
Also
read:
Prasar
targets April launch
Can
Star power say Tata to Zee's Dish, DD?
What's
cooking on Dish TV?
The
International Scenario
FAQs
regarding DTH
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