19 May 2006

Break into your home with DTH

Indian Express
The Financial Times Limited. Asia Africa Intelligence Wire. All material subject to copyright. Indian Express (c) 2006 All rights reserved

The proposed July launch of Tata Sky, the 80:20 direct-to-home, or DTH, television joint venture between the Tatas and Star TV India, promises to be a trend-setter. Not only will it be the first time DTH platforms in India share channels -as mandated by the regulator - they broadcast, Tata Sky's entry will also set the tone for launches by Reliance Bluemagic and Sun TV planned in the next year. The new entrants maybe a little late but are on track to bag riches. In pay TV, a segment almost entirely delivered by DTH platforms as the conditional access system (CAS) is yet to take off, forecasts Hong Kong-headed Media Partners Asia, India will come on tops among Asian markets by 2015 . "On a conservative estimate, we expect DTH households to number 10 million by 2010," says Pricewaterhouse Coopers principal consultant Smita Jha. In revenues, that is expected to be a market close to Rs 2,000 crore annually.

DTH platforms come with two key positive deliverables: one, a better customer experience leapfrogging the hassles of a fragmented and disorganised cable television industry. And, two, superior picture and sound quality made possible by digital technology. If the new DTH operators can get their pricing right, analysts believe, they will find plenty of takers shifting to their offering. Yet, the experience of incumbents public broadcaster Prasar Bharati-controlled DD Direct Plus and Zee Television's Dish TV, both of which have been beaming DTH signals into India for about a year, has not been encouraging. The duo counts two million homes among its subscribers-less than 2% of the country's 110 million television-population today. Dish TV crossed 900,000 subscribers in March 2006, according to Media Partners. It claims to add 3,000 subscribers a day currently and expects to close with 1.5 million new customers over the next year. The free-to-air DD Direct Plus, which has a million customers today, plans to increase the number of its channels by August from the current 33 to 50, says Prasar Bharati CEO KS Sarma. Industry insiders sound a note of caution. Growth in DTH subscriber base, they say, has slowed down. Currently the total DTH subscriber base is growing at 12-15% a month down from the 55% monthly expansion in November-December, they say, adding pricing and content have been the main hurdles. To avail of the Dish TV DTH service, a customer today has to pay nearly Rs 3,100, down from Rs 8890 a year ago; for DD Direct Plus, the payment is Rs 2,000 for the set-top box and dish antenna. The perception of owning a DTH service with limited content- Dish TV that until some months ago was beaming just Zee channels has now added CNN and ESPN-has been another dampener among existing cable subscribers. Dish TV still doesn't have the content of popular cable and satellite channels like STAR and Sony bouquets. "Subscribers have been considering the shift to DTH but with announcement of launch of new services, consumers want to wait," a source said, requesting anonymity. DD Direct Plus officials disagree saying such pickiness is a phenomenon primarily restricted to metropolises. "DD Direct is affordable and popular in both small towns as well as interior India because it both connects the masses and they get programmes in their languages too," says Mr Sarma. This could change when Tata Sky launches. Dish TV, Tata Sky and other newcomers will have to share its content with one another. Tata Sky officials are holding their cards closer to their chests. They won't comment on rumours that the company will miss their launch in July. "They will be delayed by a month or two owing to various reasons including inadequate subscriber base and logistical problems," sources say. An industry insider says Tata Sky plans to offer set-top boxes free to attract customers and has tied up with housing societies in the metros. Though the investment plans of the company are not in public domain, it has enough transponders to beam down 100 channels. It has contracted with Sun Microsystems for its information technology requirements, while it will be supplied digital satellite set-top boxes by Humax, a Korean manufacturer. Tata Sky is also in the midst of hiring over 4,000 people. "Our strengths will be speciality services to the customers and interactive services," Tata Sky CEO Vikram Kaushik told FE in an interview late April. In the DTH industry, such services include video-on-demand, multiplayer gaming and TV shopping. It has also signed an agreement with the Indian Space Reseearch Organization to lease 12 Ku-transponders on the Insat 4A satellite. Reliance Bluemagic, meanwhile, is reportedly working on an IPTV (short for internet protocol TV) strategy to deliver television entertainment to homes through its fibre optic networks. Sun TV has made investments in an affiliate DTH company. The incumbents are not sitting quiet. Dish TV has an agreement with US' Open TV to provide subscribers added features like viewing sports broadcasts from multiple angles and give viewers the option to watch news as well as read the text. The Zee company plans to leverage its huge dealer-distributor network to counter the Tata Sky threat. Prasar Bharati has decided to flex its muscle as well. In a recent meeting of channel heads which are on DD Direct Plus, Prasar Bharati has put a demand on Rs 1 crore per year to be paid by any free-to-air channel which wishes to be part of its DTH platform. "We have shown the market our strength: our ability to reach far and across. Our demand of Rs 1 crore is towards the maintenance and upkeep of running a DTH channel. There are over 50 applications from channels which are ready to pay to be on DD Direct Plus," the public broadcaster's CEO Mr Sarma said recently. For the Indian broadcasting industry fighting to push ahead with pay TV channels and fight underreporting of subscribers, 2006 could well be a turning point. After the failure of the ill-fated conditional access system, they hope, DTH will buck the trend.