dth market - india - sample
DESCRIPTION
"The Direct to Home (DTH) market in India has been growing steadily but continues to be a niche segment. Since its inception, DTH service has established its presence on a pan-India basis and is dominated by the northern and western regions. The growing middle-class and rising disposable income coupled with the rising number of television households over the years has assisted growth. Demand for enhanced viewing experience and various interactive services have been attracting investments in this market. The report begins with an introduction to DTH and its growth story. An overview of the DTH market has been given including figures for the market size, segmented pay television subscriber base and the distribution of DTH across television households. Major geographical regions have been marked. This section also highlights the revenue model adopted by players, the focus areas for players towards expanding revenues as well as the cost structure. The drivers and challenges explain the factors influencing growth of the industry including the growing middle-class and rising disposable income, increasing television penetration and sale of LCD monitors, price war and different package options which has been attracting consumers and the advantage over traditional cable operators. The key challenges identified encompass the acquisition of a share of the cable driven market and facing the new age IPTV, TRAI’s content guidelines, demand supply gap for transponders in a 7 player broadcast market and the cap on foreign investments. Key characteristics of the market has been highlighted covering technological innovations, shift from price war to offering exclusive value added services, combined retail of LCD and DTH connections and partnerships with movie distributors. The major government regulations such as taxation, custom and excise duty as well as tariff regulations have been mentioned. Competition section provides a summary of the competitive scenario including the segmented market share. It also includes profiles of the major players in the market. The section includes a brief company overview, various packages offered, business highlights and interactive services provided by each player."TRANSCRIPT
DTH Market – India
December 2009
2DTH MARKET - INDIA.PPT
SAMPLE
Executive Summary
Drivers:
�Growing middle-class and rising
disposable income
� Increasing television penetration and sale
of LCD monitors
�Price war and different package options
attracting consumers
�Advantage over traditional cable
operators
Market
Drivers &
Challenges
Trends
Competition
�Market is valued at INR XX bn in 20-- - -- and projected to reach INR YY bn in 20-- - --
�Estimated subscriber base of U mn, expected to reach V mn in the next w years
�Current overall share of DTH households among total TV households of India is pegged at a%
Challenges:
�Getting a share of the cable driven market and
facing the new age IPTV
�Trapped in TRAI’s content guidelines
�Demand supply gap for transponders in a 7
player broadcast market
�Cap on Foreign Investments
�Company 1, the first company to enter is the largest player, controlling ~t% market share
�Steep competition has led to a surge in advertising spend to improve penetration
�Due to growing number of players in the market, Average Revenue Per User (APRU) will decline
owing to price war and discounts
�Technological Innovations
�Shift from price war to offering exclusive VAS
�Combined retail of LCDs and DTH connections
�Partnerships with movie distributors
3DTH MARKET - INDIA.PPT
•Market Overview
•Drivers & Challenges
•Trends
•Regulations
•Competition
•Key Developments
4DTH MARKET - INDIA.PPT
SAMPLE
DTH industry in India has looked upbeat in recent years but
remains a niche segment
•Estimated market value of INR XX bn in 20--;
expected to reach INR YY bn at the end of 20--
•In the Indian Pay-TV market, DTH penetration
is only a% (June 09), reaching U mn out of V
mn paid subscribers
•Current overall share of DTH households
among total TV households of India is pegged
at b%
•c% of DTH subscribers reside in rural areas and
towns with a population under 1 mn and is
largely dominated by free-to-air service
•The market has 6 private broadcasting
companies namely Company 1, Company 2,
Company 3, Company 4, Company 5 Free to Air
operator – Company 6
�New entrant: Company 5 in May 20--
Overview Segmented Pay TV Subscriber Base
Distribution across TV Households (HH)
Source:
0
20
40
60
80
100
d2
d1
2006
e2
e1
2007
f3f2
f1
2008
g3g2
g1
2009e
h3h2
h1
2010e
Type 1
Type 2
Type 3
Subscribers in mn
0
20
40
60
80
l1
l2
2006
m1
m2
2007
n1
n2
2008
o1
o2
2009e
p1
p2
2010e
Type 1
Type 2
HH (%age)
5DTH MARKET - INDIA.PPT
SAMPLE
Overall cost structure in the DTH Market and the
breakdown of the subscriber acquisition cost
• Programming cost is the largest cost for a DTH
operator
� Determined as a proportion of subscription revenue that
the operator collects from subscribers
• Growth in subscriber base is expected to lead to a fall
in advertising expenditure to a% of overall revenues
by FY ’--
• Break-even point is estimated to be met in U-T years
Overview
Operators Cost Structure
Subscriber Acquisition Cost
Source:
b%
Cost 1
c%
Cost 2
d%
Cost 3
e%
Cost 4f%
Cost 5
g%
Cost 6
h%
Cost 7
C10P10
C9P9
C8P8
C7P7
C6P6
C1P1
C2P2
C3P3
C5
C4
Cost (INR)
P4
Parameter
P5
SAC is borne by the DTH players affecting their
profit margins substantially
6DTH MARKET - INDIA.PPT
Drivers and Challenges
Price war and different package
options attracting consumers
Advantage over traditional cable
operators
Drivers
The growing middle-class and rising
disposable income
Increasing television penetration and
sale of LCD monitors Cap on Foreign Investments
Trapped in TRAI’s content guidelines
Getting a share of the cable driven
market and facing the new age IPTV
Challenges
Demand supply gap for transponders
in a 7 player broadcast market
7DTH MARKET - INDIA.PPT
Key Trends
Shift from price war to
offering exclusive VAS
Combined retail of LCDs and DTH connections
Technological InnovationsPartnerships with movie
distributors
Trends
8DTH MARKET - INDIA.PPT
SAMPLE
Competition in the DTH market has grown with 6 players on
a subscriber acquisition spree
•Oligopolistic market structure
•Competition is high as market is saturated
with 6 private players and 1 free-to-air
provider namely DD Direct
•Competition here like any infrastructure
industry is about scale and volume capture
•Steep competition has led to a surge in
advertising spend to improve penetration
•With greater number of players in the market,
Average Revenue Per User (APRU) will decline
owing to price war and discounts
•Company 6 is planning to move to a paid
model increasing competition
�Plans on offering 144 pay channels, 4 hi-definition
channels and 50 radio channels
•The scope for new entrants is limited as the
challenge posed by high cost of CPE and the
high costs entailed for leasing transponders
Overview Market Share by Volumes
Source:
a%
Company 1
b%
Company 2
c%
Company 3
d%Company 4
e%
Company 5
9DTH MARKET - INDIA.PPT
SAMPLE
Players in the Market (1/6)
Headquarters H1
Established Oct 20- -
Financials FY ’09: Revenue - INR - - mn; Loss – INR - -
mn
Key PeoplePerson 1 – Chairman
Person 2 – MD
Company Snapshot: Company 1
Corporate Information Packages Offered
D4C4P4
C5
C3
C2
C1
Cost (INR)
D2P2
Packages Description
P1 D1
P3 D3
P5 D5
Business Highlights Interactive Services Offered
• Service 1 – Watch movies any time on demand
• Service 2 - Matrimonial & job search
• Service 3 - Planning tours on TV via Yatra.com
• Service 4 - Downloading mobile services
• Service 5 - TV banking with ICICI Bank
• Service 6 - Active worship
• Service 7 - Astro forecasts and predictions
• Service 8 - Interactive experience of sports/news
• Service 10 - Address regional language needs
• Offers largest number of channels with focus on strong
regional content in linguistic zones
• It began providing up-front subsidy on set top boxes to
acquire subscribers
• Large sales and distribution network - A ‘Dish Shoppees’ to
provide demo’s to prospective users (Jun ‘- -) and wide reach
to B towns and P dealers (Sep ‘- -)
• Received a PE investment of INR T bn through GDR from
Company L in Nov ’- -
• Heavy capex investment has enabled the company to deliver a
high end audio-video quality
Source:
10DTH MARKET - INDIA.PPT
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