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IDOS 2014: How can the pay TV industry be made better?

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GOA: India Digital Operators’ Summit 2014 kicked off at The Leela in Goa on 25 September. Opening the conference, Indiantelevision.com CEO and editor in chief Anil Wanvari and Media Partners Asia (MPA) executive director Vivek Couto gave a brief on the state of the TV nation and transition to the broadband digital economy.

Wanvari highlights how the state of the industry was a few years ago and what it has become now after the advent of conditional access system (CAS) and digital addressable system (DAS). Content makers aka broadcasters have been demanding more revenue from the pay TV industry. While the capex and opex for them has been high, the return continues to be low. The MSOs and DTH operators have been investing to expand their headends and build subscriber base respectively. “While it is a good business now, the real question is if each one of us is willing to make it a great business?” he asks.

In order to strengthen the business, Wanvari recommends a few suggestions that could help grow the industry. The first thing is to look at digitisation and pay TV with a changed mindset that it will be beneficial to all. The government could look at setting up a digitisation transition fund that will help educate, train, seed capital and reward people who follow the rules and ensure strict penalties for those who don’t.

Subscriber management system (SMS) should be set up with correct details and billing of the services provided to customers. The government could also look at laying down minimum standard rules for set top boxes (STBs) to ensure quality control. His final suggestion is to leave pricing to the market rather than initiate 10 to 15 per cent price rise every now and then.

Providing a glimpse into MPA’s study on the pay TV industry in India, Couto says that out of the 262 million households in the country only 162 million houses have a TV. In this, 27 million is taken up by the free to air service providers such as Doordarshan and Freedish while the rest comes under cable and satellite.

Couto highlights that over Rs 32000 crore has been invested in digitisation since 2005 with a bulk of the investment coming from the DTH operators followed by the MSOs and LCOs since 2011. Out of this, over Rs 11000 crore in the last 24 to 30 months has been invested by MSOs and LCOs. “India offers scale but limited monetisation,” he says. What digitisation will do primarily is increase transparency, addressability, tax collection and employment. Over 120 million STBs are needed over 10 years and nearly 47 per cent share of the total market will come through broadband.

The tiff between the three stakeholders continues with the LCOs fighting for revenue share, MSOs facing crash crunch and broadcasters worried about increasing carriage fees which the MPA report stated as having increased by nearly 14 per cent in Q1 FY2015.

In terms of scale, India struggles as the country with the lowest average revenue per user (ARPU) but it has one of the best channel services. Couto says that it is time for the industry to move to retail pricing than stick to wholesale tariff because the competition will keep the prices low. The need of the hour is for MSOs and broadcasters to come together and design packages, incentivise upselling, indentify opportunities for sub segmenting and create new genres. The key to which lies in raising prices to consumers.

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