Vivek Couto, ED, Media Partners Asia talks about the futur drivers & challenges for the DTH sector in India
B&E: How much is the current pay-TV market and where will it be, say, 5 years from now? Vivek Couto (VC): Projections from Media Partners Asia suggest that Indian pay-TV subscribers will grow from 105 million in 2009 to 149 million by 2014, and 173 million by 2020. This means pay-TV penetration will grow from 78% in 2009 to more than 90% over the long term. Total pay-TV subscription revenues will grow at an average annual rate of 14% over the next five years and 10% over the next decade; reaching $8 billion by 2014 and more than $12 billion by 2020. Revenues from HDTV and VAS (including VOD and PVR) will contribute more than $500 million by 2014, rising to $1.5 billion by 2020. B&E: What are the future drivers for the sector in India and how will the cable-DTH tussle play out? VC: The future of pay-TV in India will be driven by media owners and distributors expanding market share with an eye on profits, rather than at the expense of profits. It's a steep curve for them as well but yes, the margins IF YOU GET IT RIGHT, in last mile cable are superior to that of DTH. But the key risk is that DTH will have large captive installed digital base in a quicker time frame than cable. Basically DTH is readying itself for VAS a lot quicker than cable and has it on tap today. The marketing brand is there. For cable it's emerging but not quite there; the human capital is there; the financial muscle is there, but both DTH and cable will feed off each other. DTH is speeding up cable consolidation and producing something of a business model for cable operators to leverage.
B&E: With a number of players hogging the DTH space, do you think consolidation is inevitable?
VC: We suspect the DTH market will consolidate from six to four platforms within 3-5 years, and estimate four will be making money at the EBITDA level by FYE March 2013. There will be consolidation in the DTH segment and players will start making profits after 2013. 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, HDTV 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.
B&E: How much is the current pay-TV market and where will it be, say, 5 years from now? Vivek Couto (VC): Projections from Media Partners Asia suggest that Indian pay-TV subscribers will grow from 105 million in 2009 to 149 million by 2014, and 173 million by 2020. This means pay-TV penetration will grow from 78% in 2009 to more than 90% over the long term. Total pay-TV subscription revenues will grow at an average annual rate of 14% over the next five years and 10% over the next decade; reaching $8 billion by 2014 and more than $12 billion by 2020. Revenues from HDTV and VAS (including VOD and PVR) will contribute more than $500 million by 2014, rising to $1.5 billion by 2020. B&E: What are the future drivers for the sector in India and how will the cable-DTH tussle play out? VC: The future of pay-TV in India will be driven by media owners and distributors expanding market share with an eye on profits, rather than at the expense of profits. It's a steep curve for them as well but yes, the margins IF YOU GET IT RIGHT, in last mile cable are superior to that of DTH. But the key risk is that DTH will have large captive installed digital base in a quicker time frame than cable. Basically DTH is readying itself for VAS a lot quicker than cable and has it on tap today. The marketing brand is there. For cable it's emerging but not quite there; the human capital is there; the financial muscle is there, but both DTH and cable will feed off each other. DTH is speeding up cable consolidation and producing something of a business model for cable operators to leverage.
B&E: With a number of players hogging the DTH space, do you think consolidation is inevitable?
VC: We suspect the DTH market will consolidate from six to four platforms within 3-5 years, and estimate four will be making money at the EBITDA level by FYE March 2013. There will be consolidation in the DTH segment and players will start making profits after 2013. 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, HDTV 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.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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2012 : DNA National B-School Survey 2012An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
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