Dish not about to let DTH first mover headstart go Sky way

At Zee‘s office in Noida Film City, on the outskirts of Delhi, which also houses the news, DTH and sports operations with a state-of-the-art playout facility, the atmosphere these days is electric. Meetings are being held all over the place with senior management discussing restructuring, business strategies and increments in hushed tones.

DTH business head and a younger brother of Essel Group chairman Subhash Chandra, Jawahar Goel, despite the surface cool is unable to contain the excitement even as he rushes back for an appointment with Indiantelevision.com from a management meeting.

"These are exciting times," he says, settling down in his plush wood-paneled office. Even as he quickly checks his e-mails on the wi-max enabled laptop, he shoots back with confidence, "In spite of Star and Sony channels‘ absence on Dish TV, we are selling 3,000 connections per day these days. This augurs well for us, though the regulatory environment could have been better."

Concurring with Goel is another senior executive of Essel Group, which is the parent of Zee and sister concern ASC Enterprise that holds the licence for DTH service in India.

"We do expect competition in the middle of (calendar year) 2006, but I feel there‘s space for all players in the immediate future as DTH stands to take away some market share from cable," says Rajiv Garg, chief executive, finance and corporate strategy, Essel.

It is this confidence that a business could be built up even against odds and with looming competition that pumps up the adrenalin of the crack team at Dish TV, the brand name under which the DTH service is marketed.

According to Hong Kong-based media research firm Media Partners Asia (MPA), India is set to emerge as Asia‘s leading revenue generating pay-TV market by 2015 with multichannel video industry (cable, DTH and IPTV) turnover growing from $3.6 billion in 2005 to $7.2 billion by 2010 and $10.5 billion by 2015.

However, projections on DTH vary and depend a lot on progress (or the lack of it) made on the regulatory front (Dish‘s Goel bookmarks this as an important aspect).

For example, MPA feels the Indian DTH market is likely to grow to Rs 45 billion ($ 1 billion) by 2015 on a base of slightly over 11 million subscribers and 7.8 million customers by end 2010.

Contrast this against what others say. According to Sanjeev Prasad, head of equity research at Kotak Securities, the DTH market could grow to only 4 million "pay" homes or $300 million by FYE March 2010, while KPMG projects 8.6 million subscribers by 2010.

But what most agree on is that digital television, driven more by DTH in India, has the potential of changing the electronic media landscape. In such a scenario, Dish TV, the country‘s first private sector DTH platform, stands to have a beginner‘s advantage. That‘s what most people feel.


Dish TV was launched in October 2003 by Essel Group after the Subhash Chandra-promoted ASC Enterprise Ltd, the licence holder, got all necessary permissions.

Since DTH allows users to access a variety of digital television channels directly from the satellite without a local cable service provider, the initial thrust of Dish was in rural areas and those places, like the hilly regions of Himachal Pradesh and interiors of the desert state Rajasthan, where cable TV was a rarity and the terrestrial transmission of pubcaster Doordarshan was fuzzy.

Thus, providing a superior viewing experience to subscribers who had not viewed anything of the sort, Dish TV built up its subscriber base; albeit slowly. The focus now has broadened to encompass urban areas where the spending power is high.

Over a period of time, the penetration of Dish TV has increased significantly in the country. It has close to 1 million subscribers presently and is adding approximately 100, 000 subscribers every single month, says Goel. "I am quite happy with the (monthly) rate of growth. Such a ramp has been witnessed only in few top DTH platforms in the world," he points out.

With existing features like decent quality boxes, which support features like electronic programme guide, parental lock system and multiple audio feed (at the moment FM radio) Dish TV boasts of a capacity of carrying up to 400 channels and also giving the gaming freaks an opportunity to play video games.

However, at the moment, technical constraints and uncertainty on the regulation front has compelled Dish to keep the offering to modest levels at conservative prices. Goel admits that channel capacity cannot be expanded at the moment, partly because of lack of transponder space and partly because selecting niche content for a DTH platform from the global market is not easy.

"If we want to turn into a premium service, we should also have premium content. But clarity on that can only come from the sector regulator (that frowns down upon exclusive content on a delivery platform presently)," he adds.


But from this point onward the task of Dish TV becomes that much more difficult as Tata Sky, a 80:20 joint venture between the Tatas and Rupert Murdoch, gears up to unleash its DTH service in the second half of 2006, signaling stiff competition.

Though Tata Sky, in true Tata style of functioning, is keeping things close to its chest, reports filtering out do indicate that the service would focus on niche content, quality of service and aggressive marketing --- some of which might be innovative like supplying one master DTH connections to high-rise residential complexes that can be then split up as per the local need.

Tata Sky also hasn‘t given up the proposal of heavily subsidizing the set-top box, which will help the service gain entry into households quickly.

Competition certainly there would be, though Dish TV CEO Sunil Khanna puts up a brave front by saying, "Competition? What competition?

On a more pragmatic note, he goes on to point out that a change is taking place in the C&S dynamics in India where slowly analog is giving way to digital mode of delivery and transmission that will be primarily driven by DTH and to a lesser extent by broadband and IPTV.

"If DTH is to play such a big role (in the change), all players have to grow as it‘ll help create market awareness about such a service. Tata Sky or other players‘ entry would only help Dish TV‘s growth," Khanna surmises.

There‘s certain logic behind such utterances. The entry of another DTH player is also likely to coerce sector regulator Telecom Regulatory Authority of India (Trai) to revisit an earlier mandate on making available all content to all platforms.

This mandate has been openly flouted by some broadcasters who have delayed making available their channels to Dish TV on the pretext that continued commercial negotiations

are yet to be concluded. This also means that Dish TV‘s subscribers are unable to get all the content available on cable services at present.

"Trai‘s initiatives have been challenged in the court, while the government has its own reasons to be non-committal on issues like CAS and must provide. It is my belief that for the broadcasting industry to grow exponentially over the next five years, more government and self -regulation is needed," Goel says.

Consumer acquisition and investment on programming and packaging is another aspect that Dish TV needs to address as it‘s going to play a vital role in the Indian scenario.

"The next 12-18 months and beyond will see a land grab in the distribution area, initially kick started by DTH and the launch of Tata Sky. So clearly Dish TV will require more investment in the future, particularly as STB subsidies and programming acquisition costs scale up," says MPA executive director Vivek Couto.

And, Goel partly agrees that customer acquisition and box subsidisation would take a toll on any DTH player as unlike in the DTH‘s developing stages in countries like the US and the UK, exclusive content is unlikely to be THE driving force of such a service in India.

A unique market in every sense, in India it has to be combination of quality of service, good packaging of available and niche content, clever pricing of this content and pushing it into customers‘ homes by absorbing part of the cost of the box or the total hardware needed for a DTH service.

The proverbial beginner‘s advantage may play its role up to an extent in Dish TV‘s growth. Take, for example, the cost of the box itself. While the imported boxes from Korean vendors is costing Dish TV on an average $ 38 (the average price might come down as the demand increases), industry sources say a box is likely to cost Tata Sky between $ 60-$ 65.

"There‘s always a price advantage to the first mover. We had acquired the customer in the beginning when we paid lower satellite space rates. Though we did not experience negative cost of acquisition, things have changed now. Even Insat is unable to provide enough space to all the DTH probables now," Goel points out.

A Dish TV set-up box is now available in the market at an entry price of Rs 2,990 for 75 channels for three months, which also includes the monthly subscription fee for the period. The scheme was started in April.

After this the customer has the option of paying Rs 107 per month for around 75 channels. The prices go up to Rs 300 per month for more than 100 channels, including the radio services. The company had priced its services initially in such a way as to leave some room for manoeuvring later.

It‘s tactics like these that have kept the competition on the edge, compelling it also to review its options. Says MPA‘s Couto, "Dish‘s pricing structure has made Tata Sky revise its own plans. I‘m sure Dish will scale it (the price war) up further and then Tata Sky may respond."

Aware that what the likes of MPA are saying that intelligent packaging of content has some merit, Dish TV has devised various tiers also like Dish Welcome (introductory offer), Dish Bioscope (specially categorized movie channels like Zee Action and Zee Classic) and Dish Goal (for fans of European football).

So, Dish Plus package, for example, comes packed with a wide selection of national and international channels at Rs 125 per month and offers channels like Zee Studio, HBO, TCM, MCM, Reality TV. Dish Bioscope, featuring Zee Premier, Zee Action, Zee Classic and Pakistani film channel Filmazia, costs Rs. 55 per month. News is packaged in Dish News with Zee Business, Euro News, Euro Sports News, NDTV 24x7, CNBC TV18, Awaaz and CNN Headlines News. The cost: Rs 60 per month.

Dish Pick is an a-la-carte package that allows subscribers to pick and choose extra regional channels. Two channels come for Rs 30 per month, five channels for Rs 50 per month and all regional channels come for Rs 100 per month. (All the prices listed here are exclusive of taxes.) Channels included in this package include Zee TV, Sahara One Zee Punjabi, ETV- Rajastan, ETV - UP, ETV - Bihar, Geo TV, Zee Telugu, Jaya TV, Jeevan TV, Akash Bangla, Zee Bangla, Zee Gujarati and Marathi, India TV and NDTV India.


Knowing fully well that it has to continue reinvent itself, not only prices of Dish TV service has been dropped, but the retail networks too are being strengthened, apart from pushing digital video recorders (DVR) as a value added service.

Dish, which presently has about 6,000 dealers around the country, is beefing up its network with an additional 3,000 dealers of HCL, the computer hardware company that is also a distributor of Nokia handsets in India.

As per a yet-to-be-announced pact with HCL 3,000-odd HCL dealers would be responsible for selling, installing and servicing Dish TV hardware at customer end.

"We expect that such non-exclusive deals will help us reach out to more customers and service them better," Goel says, hinting that in the near future other such pacts may be concluded.

Apart from this, the company is also in the process of launching anew its DVR service with focus on Delhi and Pune. Selling at Rs 16,000, a DVR will allow a subscriber to download up to 200 movies, apart from other Dish programming, to be watched at leisure.

"We want to focus on some select cities like Delhi with the DVR offering before making it nationally available. This is a new concept and we want to do some sampling with subscribers," Dish CEO Khanna says.

Towards the end of June, Dish will launch its gaming and middleware facility that will allow DTH subscribers to play not only with games, but also while watching traditional television.

With the help of technology partner Open TV, Dish plans to introduce middleware tech wherein a viewer can access background information about a cricketer, for example, who‘s playing in a match telecast on TV at that moment. (pix-Courtesy DishTV)

However, one of the most exciting things explored by Dish TV is the introduction of pay-per-view concept in India in the real sense where subscribers of pay television have the option of watching a programme for a particular period of time after making payment for the same.

Hoping that the Discovery-Sony Entertainment joint venture One Alliance will come on board soon, Dish is exploring whether exclusive Discovery programming (like excavation of Titanic or a famed Egyptian tomb) can be made available to Dish subscribers on selective payment basis.

"Pay per view is a concept that‘s yet to mature in India. For that content is most important. But we are examining whether we can try out this concept with Discovery once it joins the Dish platform," Goel informs with excitement written all over his place.

It‘s quite apparent that Dish TV is far from being complacent. And, the announcement that at a later stage the whole DTH operation, restructured as part of an over all Zee Telefilms rejig, might be listed on the stock exchange has given the company an impetus to ramp up its activities.

While Khanna is effusive that in the coming months Dish TV will become "more aggressive" on all fronts, MPA‘s Couto feels the restructuring has come at the right moment. "...a spin off could well be the ideal way to induct strategic and/or private equity financing in DTH." After all, investments have to be made if the Dish operations are to be ramped up.

(Rs 45 = 1US$)

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