Direct-to-home (DTH) players, most of whom have been bleeding till now, could finally be making profits in 2014. But the DTH sector will have to pay a price for that - consolidation will see the number of players shrinking from six to four, says the latest Asia Pacific Pay-TV and Broadband markets 2010 report by research firm Media Partners Asia. "We suspect the DTH market will consolidate from six to four platforms within three to five years, and estimate four will be making money at the EBITDA (earnings before interest, depreciation, taxes and amortization) level by financial year ending March 2013," says MPA executive director . The MPA report says India will become the largest DTH market in the world by 2012, overtaking the United States, and boast of 45 million DTH subscribers by 2014.

In an interview with , Couto talks about the pay-TV market in India, the low average revenue per user (ARPU) of DTH operators and how this could soon change on the back of HDTV (high definition television) and value added services. Edited excerpts:

That will continue to be the trend especially in rural areas and smaller towns that have limited or no cable, thereby tapping new audiences for TV. DTH is therefore the primary audience but there will be a greater share in metros in time to come; only it will be incremental as opposed to seismic. Also, analogue cable will also prove hard to displace in some metros.

Yes and no. The extent of ARPU growth in India is over exaggerated with analog cable, price competition and regulation as it exists. So the scope of ARPU growth is limited. VAS (value added services), HDTV (high definition television) will provide a boost as well as the impact of up-selling to new tiers. We see monthly ARPUs in the DTH sector climbing from less than Rs 150 in 2009 to Rs 220 by 2014.

Yes, it will change gradually. We are positive on HDTV and to some extent, PVR (personal video recording). Bharti's mobile functional DVR (digital video recorder) is a step in the right direction, pay per view (PPV) has plenty usage but very limited profit to ARPU contribution. Nowhere in the world has PPV made a big contribution, it just limits churn. HD is the one to focus on and DVR to some extent. A gradual integration with mobile, telecommunication and Internet will also help.

The government regime on taxation is excessive - it's like carrying a millstone! The regulatory framework on media is one of the must value decimating in the world. The fact that Indian pay-TV and media is what it is today owes a lot to the consumers and the entrepreneurs in this sector.

India's television market is the most dynamic but its infrastructure needs radical improvement.