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Indian Pay TV subscription to break Rs 10,000 crore barrier in 2016: MPA

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MUMBAI: It’s heartening news for many in the pay TV industry, the slow pace of digitalization, nothswithstanding.

Subscription revenues for broadcasters in India from cable TV and DTH platforms are on course to cross the Rs 10,000 crore (US $1.5 billion) mark for by end 2016. That’s the prediction of Singapore-based industry research and analysis firm Media Partners Asia (MPA).

On the whole, Asia Pacific Pay-TV And Broadband Markets 2016, predicts that
India’s pay-TV industry is on course to generate $9.4 billion in sales this year.

Of this, the pay TV channels will account for $4.9 billion in aggregate revenue in 2016, up 16 per cent year-on-year. (The rest of the $4.5 billion is revenue that accrues to cable TV and DTH, that is the platforms)

The revenue mix is approximately 70:30, skewed in favor of ad sales. Maintaining strong future growth will require channel operators to manage several structural changes, including the increased importance of rural markets under BARC’s new TV measurement system, changing norms on channel pricing and the rise of OTT video services.

Pay-TV channel advertising revenue should grow by 15 per cent this year, to reach US$3.4 billion, predicts MPA.

Says MPA executive director Vivek Couto: “Future economic growth should remain strong, which will support solid gains in the pay-TV industry. Digitalising India’s 65 million analog subscribers remains a major opportunity for cable, DTH and other emerging pay-TV platforms. Digital cable has done well to attain a 30 per cent share in Phase III areas, which tend to be DTH strongholds. At the same time, changes in the distribution landscape, together with gaps in traditional pay-TV services, are fostering the growth of new platforms. While Reliance Industries has yet to unveil pricing and bundling plans for its broadband service R-Jio, the product could disrupt traditional pay-TV distribution in urban markets. Expanded TV ratings from BARC meanwhile, which gives a better picture of viewing in rural areas, has also helped Prasar Bharati’s Freedish gain traction in Phase III and Phase IV areas.”

MPA says the future looks bright. The report says that India’s pay TV industry will grow sales at 9.a 2 per cent compounded annual growth rate (CAGR) between 2016 and 2021 to reach $14.5 billion in revenue by 2021, increasing thereafter to $18 billion by 2025.

Total pay-TV subscribers are forecast to grow from 152 million this year to 183 million by 2025. Pay-TV penetration, including multiple subs in a home, should remain stable over 2016-25 at 80 per cent of TV homes, although digital pay-TV subs are projected to grow from 93 million to 129 million over the same period. MPA forecasts that 70 per cent of India’s pay-TV base will be digitalized by 2025.

Ongoing cable digitisation will help facilitate a gradual increase in pay-TV monthly ARPUs, from US$3.3 in 2016 to US$4.5 in 2025, although this will be offset by the 30 per cent share of pay-TV subs still accruing to analog by 2025. Cable will remain pay-TV’s largest platform but its share of pay-TV subscribers is expected to decline, from 68 per cent in 2016 to 60 per cent in 2025, as DTH attracts the majority of new subs.

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