TV Still Dominates Among All Mass Media Pay-TV in India To Have A Significant Expansion

Television in India continues to be an important medium for both broadcasters and advertisers, with the unparalleled reach and viewership it enjoys. Even though, TV remains a medium of appointment viewing and is witnessing the rise of digital media consumption due to proliferation of 4G and smartphones, it is likely to remain robust in the near future. Pay-TV industry revenues in India are on track to pass the US$10 billion mark this year, according to the latest forecasts from leading industry analysts Media Partners Asia (MPA), published in a new report Asia Pacific Pay-TV Distribution 2017. Industry revenues are set to expand by 10.6% this year, picking up the pace again after a 6.3% growth rate in 2016. Cable, the dominant platform in Indian pay-TV with 59% of subscription revenue and 67% of subscribers, will expand by 7.0% this year to exceed US$3.6 billion, according to MPA forecasts. Revenues for DTH satellite meanwhile will grow by 13.6% to reach ~US$2.6 billion. Pay-TV advertising, meanwhile, is set to contribute just over US$3.8 billion.

Mihir Shah, vice president of India for Media Partners Asia, said: “India’s pay-TV market has been shaken and stirred by macro-economic developments, from demonetization to tax reform, as well as structural shifts in the marketplace, notably TV ratings for rural areas as well as proposals for a new tariff regime from the regulator. That said, the market continues to offer scale and opportunities for monetization. India’s pay-TV industry will add 5 million net new customers this year, lifting the base to 155 million homes. By 2022, this base will have grown to 173 million homes.

“Although average revenue per user or ARPU is relatively low at US$3.4, this will rise to US$3.8 by 2022,” Shah continued. “Digitalization offers a major opportunity, not only to incumbent cable and DTH operators, but also to new platforms such as DD FreeDish. By the end of this year, there will still be 44 million analog cable homes in India that need to be upgraded to digital networks. We expect 77% of India’s pay-TV base to be digitalized by 2022. On-ground enforcement of the government’s cable digitalization program, together with more foreign direct investment as well as healthy primary and secondary capital markets, will also help drive digital subscriber growth.”

India’s pay-TV market is poised to be the fastest growing in Asia Pacific over the next five years, as revenues increase by a 7.1% annual growth rate between 2017 and 2022, according to MPA forecasts. MPA analysts project pay-TV industry revenues in India to pass the US$14 billion mark in 2022. Revenue from pay-TV advertising will grow by a 10.5% annual growth rate over this time-frame, increasing its share of the pay-TV pie from 38% in 2017 to 45% in 2022. Pay-TV subscription revenue will grow by a 4.8% annual growth rate, with its share of the pie set to fall from 62% in 2017 to 55% in 2022.

India is the second largest pay-TV market in Asia-Pacific, after China, which is expected to generate US$21.0 billion in revenue this year, according to MPA. Japan, a US$6.5 billion pay-TV market, is third. Korea sits in fourth place, at US$5.5 billion, while Australia lies fifth at US$2.8 billion.

46 million households to use free TV by 2020

A significant rise in the number of TV households in India, increase in DD FreeDish consumers, and availability of viewership numbers of rural audiences have created an environment conducive to a rapid growth of free TV market in the country. According to a report by consulting firm EY, the free-television industry (FreeDish and terrestrial) could grow to as many as 46 million households by 2020 compared with about 30 million at present.

“This change in customer behavior will have a significant impact on FTA (free-to-air) and pay television channel uptake, and corresponding spends on subscription income, “says the report titled `India’s Free TV market -A game-changing opportunity’. According to the study, broadcasters have opened up to the idea of providing many FTA offerings. For instance, top four broadcasting networks -Star India, Zee Entertainment Enterprises BSE -0.59 %, Sony Pictures Networks India and Viacom18 -have launched FTA channels in the mass genres, such as Hindi general entertainment and movies. The content on these channels is similar to that on the broadcasters’ general entertainment pay channels but is dated by up to a year or even more. These free channels have opened up avenues to advertisers who could not earlier afford higher ad rates of mainstream general entertainment channels. They can now target the middle-lower income audience in a cost-effective way.

Broadcasters have launched FTA channels primarily to expand the reach in nonurban and rural areas, as the rural measurement proportion of BARC India, the viewership measurement agency, was increased significantly to 50% of its panel size. Today, rural TV viewership contributes 52% of overall TV viewership.

Incidentally, the number of total TV households in India has seen a rapid increase from 119 million in 2011to 183 million in 2017, and it is expected to touch 200 million by 2020. In 2016, the market was split between pay direct-to-home companies (42 million), organized cable TV services (50 million) and other pay cable (56 million), apart from DD FreeDish (approximately 20 million) and terrestrial television (about 10 million).

Asia Pacific Pay-TV Distribution

Asia Pacific Pay-TV Distribution is an annual report published by Media Partners Asia (MPA) covering commercial distribution of pay-TV and broadband in 17 Asia Pacific markets, including analysis of 80 pay-TV and broadband operators with KPIs and P&L. The report provides historical data and five-year forecasts for subs, ARPU and revenue across pay-TV platforms, including on-demand, TV Everywhere, HD and DVR services, as well as for subscription and ad revenue for pay channels. The report also contains a detailed breakdown of channel packaging from pay-TV and broadband operators. The 17 markets covered by the report are: Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Myanmar, New Zealand, Pakistan, Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam.

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