Today’s booming era for television content distribution and flash changes in technology is challenge for it. In television broadcasting, most operators are ensuring sharp picture and HD video quality on attractive price, giving customers the power to choose the channels, offering interactive television environment such as video-on-demand (VOD) and gaming on the multimedia platform.
In India, popular platforms are DTH, cable TV, and terrestrial TV network; indeed there is another technology called over-the-top (OTT) where Internet service provider allows to access content on handheld devices.
The journey of Indian Television industry so far has been very interesting and has witnessed exponential growth. Starting with one channel Doordarshan, liberalisation in 1991 opened the Indian television market. Today there are close to 800+ channels and still counting. With the growing demand for cable from subscribers, there was a huge leakage in tax revenues to the government due to unaccounted or under reported subscribers in the cable distribution.
To curb the leakage, TRAI in 2012 issued a mandate to digitise the entire Indian cable TV distribution in a phase-wise manner. Starting 2012, a new revolution hit Indian TV industry, when the Govt. made set-top boxes mandatory for watching cable TV. At that time, there were mainly two options for the TV subscriber: Either install a set-top box from the local cable operator, or install DTH or Direct to Home via brands like Tata Sky, Dish TV, Airtel Digital, and Reliance D2H. With DTH, users had to install a dish as well, whereas set-top boxes were wired connection from a central hub.
Thus arrived the set top boxes. This was the second biggest game changer in the Indian television market. There was a shift in power and monopoly from Local Cable Operators (LCOs) to Multi-system Cable Operators (MSOs). Simultaneously there was strengthening of Direct to Home (DTH) players in the TV distribution industry, emerging as a competition to the cable players. So the question that looms is can DTH replace the cable MSOs?
After almost 5 years, it is still a mystery, as to which platform: Set-top box or DTH is more popular and provides more satisfaction. Chrome Data Analytics & Media, a data analytics firm has carried out an interesting research, in order to find the best player between DTH and set-top box. And broadly, in terms of penetration, it seems that digital set-top boxes are still winning against DTH operators. This also means that the local cable TV operator proved to be more dominant, compared to big brands like Airtel, Tata and Reliance.
Here are few major highlights from the report:
The rise of DTH players in early phase of digitisation
DTH players have predominantly concentrated in the rural areas where the cable MSOs have limited reach. With the onset of digitisation, DTH players got an entry to the urban markets in the early phases of digitisation. Urban subscribers now have an option to choose either from the set top boxes from the local cable operators or DTH players. In India, there are a total of 6 private and one national DTH players. During this time, we saw an increased marketing and advertising spending from the DTH players in their pursuit to increase their market share in the urban markets.
Cable TV is dominant over DTH
As per the replies received from the sample audience, set-top boxes are clearly more preferred. While 53% of the respondents shared that they watch TV via digital set-top boxes, 47% preferred DTH. Interestingly, out of 53% who opted set-top boxes, 65% were those who had analogue cable connection earlier. Whereas out of 47% who opted for DTH, only 32% had an analogue connection earlier.
Reason behind the switch over to STB
For those who shifted to digital set-top boxes, Govt.’s mandatory order to shift was the main reason, as 69% attributed this as the main reason for shifting. 43% shifted for more channels, and 31% shifted for the better audio-video quality. Only 26% of digital set-top boxes shifted due to a disturbance in analogue signals.
On the other hand, 40% of DTH users shifted because of disturbance in analogue signals, and only 33% shifted due to Govt. order. The number of channels was a reason for only 20% of users. This means, that for DTH users, the quality of TV viewing experience was more important, compared to users of set-top boxes.
What about satisfaction?
It seems DTH services are winning the satisfaction race here. Out of all users who opted for DTH, 96% are satisfied, whereas out of those who are using set-top boxes, only 83% are satisfied. This means that although set-top boxes and cable TV operators have larger penetration, it is the DTH operators which are providing better services.
But, when asked whether they will switch their services: Set-top to DTH or DTH to set-top, then the answer was uniform: No. 98% of users of both set-top and DTH said that they don’t want to switch. Chrome Data Analytics & Media used a sample size of 1071 respondents, across India. While 59% of the respondents were men, 41% were women.
In the wake of the opening up of the earth and skies (literally) to private operators, India is all set to see a “war of the accesses”. With very few large players, a widespread geography and an extremely rowdy and unorganised cable operator set-up, the options between DTH and Cable as access modes are both set to woo the ever increasingly discerning Indian consumer.
The challenge for cable exists in the rural areas where installation and application are extremely cost prohibitive, and nearly three quarters of India is designated as rural territory. This has created an opportunity for DTH, which serves an immediate threat to the high-end cable networks. Some of the key player who have shown an interest in operating a DTH service are the Star, Zee Telefilms (the Subhash-promoted group has decidedly cooled off on it though) and the Modi Group. Two or three other DTH packages are expected to launch in 2002, and package choice is likely to increase subscription rates in the medium term, although different marketing techniques may generate confusion as the benefits vary from package to package. DTH providers claim to target only the wealthy rural population, although a high proportion of their subscribers will be the urban rich as well, many of whom already subscribe to the higher-end cable networks. DTH, however, is faced with a lack of high quality programming, a lagging infrastructure for distribution and collection and technological barriers.
However much like the USA the extremely high penetration of Cable in the Indian households would be a definite threat to the highly optimistic proponents of DTH in the country. Also, the MSOs are in an active drive to upgrade their existing networks in order to lay a backbone for the recently liberalised broadband industry. Hence the cable operators seem to have won the first round of the battle by providing the consumer value additions in the form of high speed Internet and other services.