28-11-2012, 11:47 AM
DTH INDUSTRY
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HISTORY OF DTH SERVICE INDUSTRY
The history of Indian Television dates back to the launch of Doordarshan, the country’s national television network in 1959. Television was then seen as a luxury item that could be afforded only by a chosen few. The transmission was in Black & White. The 9th Asian games which were held in 1982 in the country’s capital New Delhi heralded the mark of color television broadcast in India.
In 1991, Indian economy was liberalized from the License Raj and major initiatives like inviting foreign direct investment, deregulation of domestic businesses emerged. This lead to the influx of foreign channels like Star TV and creation of domestic satellite channels like Sun TV and Zee TV. This virtually destroyed the monopoly held by Doordarshan.
In 1992, the Cable TV industry started. If one could list down the revolutions that happened in Indian entertainment industry, Cable TV would top the list. It has literally changed the way the average Indian watches the Television. The number of channels increased suddenly from 2 and the real entertainment started. Every city in India had a complex web of co-axial cables running through the streets with a new breed of entrepreneurs called as cablewallahs or Local Cable Operator (LCO) taking in charge of distribution. The film industry was shocked by this sudden growth and there were even organized protests for calling off the Cable TV industry. The industry survived but the sudden onset of growth made it as a disorganized sector. There were simply too many cable operators in the country. Carrying new channels on the existing infrastructure required new investments which the operators were reluctant to make. Also the Channels had a difficult time in getting its returns as the existing system was a non-addressable and the operators could simply give a reduced number of subscribers to amass profit.This lead to the emergence of a new breed of firms called as Multi System Operators (MSO) who had heavy financial muscles to make capital investments. They liaised between the cable operator and the Channels. MSOs provide the feed to the local operators for a fee. Soon the industry consolidated with each city having one or two MSOs operating. Most of the channels are carried by all the MSOs but sometimes certain channels are shown only on a specific MSO network. The MSO industry has become highly monopolistic which warrants government participation2 to ensure
competition. Current estimates show that there are 6000 MSOs operating in the country feeding 60000 LCOs.
In 1995, Government felt the need of regulation in Cable TV and passed the Cable TV networks (Regulation) Act. This was also the time when the state owned Doordarshan and All India Radio came under a new holding called as Prasar Bharati to give them enough autonomy. Even with the basic regulation in place, there were lots of distribution issues with Cable TV. The LCOs reported a lower number of connections where as the broadcasters demanded a higher rate. MSOs were finding it difficult to operate under these conditions. This lead to an amendment of the Cable TV networks (Regulation) Act in 2002 to provide Conditional Access System (CAS). With CAS, the last mile distribution could be addressable with accuracy and digitalization of broadcast was also possible. CAS was rolled out in 2003 starting from Chennai and later to parts of Delhi, Mumbai and Kolkata.
On the DTH front, the United Front government had issued a ban on use of Ku band transmission. After a change of government, the ban got lifted finally in 2001 and TRAI issued the guidelines for operating DTH. Country’s first private DTH license was awarded to Dish TV in 2003 which started operations in 2004. Prasar Bharati also started its product DD-Direct+.
In 2007, TRAI proposed a new initiative by name “Headend-In-The-Sky (HITS)” model as an alternative to the existing cable distribution. Instead of the MSOs providing the bundle, there will be a single HITS operator who will prepare the bundle of channels and beam it to the Headend in the satellite. The LCOs can receive this digitalized bundle and deliver to the individual homes. With HITS, country wide implementation of CAS becomes instantaneous and cost-effective. This benefits both the broadcasters and the customers by ensuring Addressability, Better quality of service and increased number of channels. Another emerging trend is the IPTV which is yet to be regulated and one can expect lot of action in this sector.
MARKET LEADER
The market leader in Indian DTH service industry is Dish TV. DishTV is a division of Zee Network Enterprise (Essel Group Venture). EGV has national and global presence with business interests in media programming, broadcasting & distribution, specialty packaging and entertainment. Zee Network incorporated dishtv to modernize TV viewing. dish TV is India’s first direct to home (DTH) entertainment service. By digitalizing Indian entertainment, this enterprise brought best television viewing technology to the living room. It not only transmits high quality programmes through satellite; but also gives a complete control of selecting channels and paying for them.
Dishtv imparts DVD quality picture and stereophonic sound effects to the customers. It promises to change the experience of TV viewing with its uninterrupted transmission service. The endeavor enters next level of entertainment with futuristic features, such as EPG (Electronic Programme Guide), parental lock, games, 400 channels, interactive TV and movie on demand. DishTV also brings exclusive national and international channels for the first time in India.
APPLICATION OF TECHNOLOGY
Latest Trends
• India The world's 3rd largest television market with 138mn TV households, has approximately 105mn cable & satellite households. Digitization has been a key growth driver for the Indian entertainment industry and this trend was even more pronounced in FY 2010 as the industry exceeded growth expectations to reach a base of 33 million subscribers, clocking a 50% growth over its subscriber base of FY 2009. The growth trend is set to continue with the DTH subscriber base expected to touch 70mn by 2014.
• The government's initiative on mandatory digitization across India, over the next few years, will lead to rapid build-up of DTH subscriber base across geographies, further accentuating the DTH growth story.
• In FY2010, the industry saw the advent of A-la-carte packaging, promising the subscribers the ultimate flexibility to handpick their entertainment & create their own packaging.
• Now the industry is all set to offer further enhanced experience with next generation feature of High Definition (HD) picture quality. Most of the DTH operators are now offering between 6 to 40 HD channels. Currently, Reliance Digital TV is the only player offering all 250 channels in HD like quality, with 10 times sharper picture, in its HD Set Top Boxes.
• DTH industry in India was operating on MPEG 2 technology till 2008. Reliance Digital TV became the 1st DTH operators to launch its all India service in MPEG 4 technology, giving the flexibility to offer more channels & better experience quality. Thereafter all new DTH players have launched services in MPEG 4 technology.
• Indian DTH players have started using VAS to differentiate offerings and establish their USPs. Some of the Value Added Services being offered by various DTH players include On-Screen Shopping, Education, Stock Market updates, Cooking Lessons, Games and watching movie premiers on TV from the comfort of one's home.
Bottlenecks of the sector
In this market, content and transponder capacity are scarce and controlled by a few players. With content, access to unique local language material is critical. In a market like India, all a DTH player may need to do is repackage existing channels that are not universally available. The second obvious bottleneck is in transponder capacity. A modest DTH offering is likely to require a minimum of 10 to 15 transponders-almost a dedicated satellite. The number of satellites that can broadcast to a particular region is limited by physics.
CONCLUSION
With the existing regulatory restrictions, Increasing content costs and lack of transponders, DTH terrain appears too steep to climb. With content differentiation not happening in the near future, companies have to differentiate only at the service and cost levels. The increasing consumer awareness and expectations also make it difficult to satisfy the consumer. Today’s customer is sensitive to price as well as to quality. From the global experience, one can see that only 2 key players emerge in DTH industry. The trend is expected to continue here as even the massive Indian volumes 24 Dish TV plans DTH services in cars, trains, may not be enough to guarantee a fair share of the pie for 6 players. So we can expect to see some consolidation happening in the next 3 to 4 years. On a deeper look, things are not as bad as they appear. India being the home of
Entertainment-hungry populace, volumes play the role of a growth driver. Attractively priced and feature rich package targeted at the critical mass is the mantra for sustaining the growth rate. Apart from the volume business, a prudent DTH operator should also take a serious look at the substitutes and complements. He should diversify and create his presence in the entire spectrum of broadcasting and telecommunication services. The final winner cannot be a pure DTH player but a convergent player who offers all in one to the value-conscious, price sensitive Indian consumer.