New Delhi: The Indian television and cable industry and the Ministry of Information and Broadcasting have taken the first steps required to implement complete digitalization in India. However, the road to digitalization has bottlenecks in terms of distribution, content, technological change and pricing.

The fourth edition of the Indian Digital Networks Summit organized by Indiantelevision.com and Media Partners Asia (MPA) saw key members from the trade, government and regulators discuss issues concerning the growing media sector.

The first session saw an overview of the business by Indiantelevision.com GM Anoop Wanvari and MPA executive director Vivek Couto, followed by keynotes by MIB additional secretary Uday Kumar Verma, Telecom Regulatory Authority of India (TRAI) chairman Nripendra Misra, Star India CEO Uday Shankar and Digital Entertainment Network (DEN) chairman Sameer Manchanda.

Wanvari elucidated: "Close to a billion dollars will be poured into the content space over the next two years to launch new channels and introduce new forms of programming on existing ones. The problem with this is that there is a bottleneck in terms of the pipe with most of the smaller cable TV networks, run by the 30,000 cable operators all over the country having the ability to distribute a maximum of 25-30 channels. Carriage fees are a big burden for these players and will continue to be so, and the figure may rise from 10bn rupees (1,000 crore) plus today to more than double in the next three to four years."

"The television household penetration continues to grow and is driven by factors like incomes, affordability and literacy. Cable will dominate TV distribution with 70 per cent of TV homes by 2013 versus 63 per cent today. Also, DTH pay penetration will climb to close to 20 per cent versus seven per cent at the end of this year," said Couto.

The MIB's Verma stressed on voluntary Conditional Access System (CAS), "while CAS has spread to certain parts of the country and the ministry has also approved the policy of Internet Protocol Television (IPTV), there is a need for complete digitalization which can also be acquired through voluntary CAS. Nevertheless, voluntary CAS can only be successful if the cable operators are given incentives to encourage them to use the addressable system CAS, the prices of set-top boxes are reduced and a demand is created in the market."

"There is a need to create a national digitalization fund which should be made available to cable operators and Multi Systems Operators (MSOs) to encourage them to digitize fast. Also, there is a need to set a time frame for complete digitalization while it might not be too aggressive a deadline, but together the government and the regulator can set a deadline till 2010 for complete digitalization", added TRAI's Misra.

Next, Star's Shankar elaborated on delighting the viewers to win the viewers' support, "The Indian television industry size is disproportionately small and the effective TV media revenue is under 2.5bn dollars. Also, India's advertisement spend is lower than many developing markets like China, Philippines and Turkey. All this clearly show that business margins under pressure and broadcasters' margins are dropping as viewership is fragmenting dramatically. Thus the need of the hour is that broadcasters, government, regulator, advertisers and distributor should focus at winning the viewers' support by focusing on share, rather than growing the pie as well as reactive fixing of what is broken, rather than proactive shaping."

Lastly, DEN's Sameer Manchanda stressed that the future of Indian cable and television industry is the Triple Play service. "India is very much similar to USA in terms of current market size and development. And following the global example, cable in India will transition into Triple Play and will offer high speed internet, digital TV, VOIP, pay per view, value added services (VAS) and video on demand at the same time. The industry is indeed investing into all this transformation."

Therefore, while India is certainly on the road to digitalization the Indian television and cable will take some time to clear the bottleneck.

Source: Indiantelevision.com website, Mumbai, in English 2 Oct 08