Indian Pay-revenue Model

Here is how Indian DTH Market is expected to perform in the next 2 years.

• No of DTH Homes at end of FY2009 - 8.1 mn which is 10% of Cable Market with an ARPU of Rs 180. Overall size of the DTH market is Rs 13,100 cr.
  
• The Number of DTH Homes by FY12 is expected to be 21 mn which is likely to be 21% of Cable market and have an ARPU of Rs 208

What will DTH Broadcasters Get ?
We estimate content costs are ~55% of subscription revenues and are expected to decline to ~45% of revenues as the “sliding scale” mechanism kicks in.

Ramp-up Plans of DTH Players

In the next few posts we are going to cover about DTH market in India along with TV broadcasting and content market with some amazing statistics that will be unveiled for the first time.

Today we are going to tell you about the business plans of various DTH service providers.

• Dish TV [Zee Group Company] Has a customerb ase of 4.4mn is the largest and oldest operator in the DTH business in India
• DD Direct - DTH arm of Doordarshan has 3.5 mn subscribers. Most likely to end up with the same fate as BSNL in Mobile Subscribers [Initial Lead and will fall later]
  
• Tata Sky - Looking at a minimum of 8m connections by FY12 from the current 2m subscribers in direct-to-home (DTH) space
• Sun Direct - Sun Direct announced 1m DTH subscribers in 200 days - only from the four Southern states. The company is targeting 3m subs by year end
• Reliance Big TV - Big TV announced on Oct 20 that it had reached 0.5m subscribers within 2 months of launch. It plans to add ~0.4m subscribers every month with an on ground infrastructure spanning 6,500 towns. The company is targeting 5m subscribers within the first year of operations
• Bharti Airtel Digital TV - Recently launched. Digital TV will be initially available in 62 cities across the country through 21,000 retail points (including Airtel relationship centres). According to press articles, the company aims to capture 20% of the net additions of DTH subscribers this year

Videocon which has thrown its hat into the Mobile telephony business is also entering the DTH business.

Tata Sky Video Recorder Unveiled

India's largest DTH Platform - Tata Sky just a while ago unveiled a Personal Video Recorder - PVR Hardware to its customers. Using PVR, customers can record upto 45 hours of video which can be viewed any time they wish to. PVR functions exactly liek your VHS / DVD Player for the content stored on the 160GB hardDisk. PVR will cost you an additiona Rs 9,000.

The best feture of this is, you can watch one channel and record on the other channel. So no more fighting with your spouse as one of you can get into the recording mode and let the other watch in peace :-) Like many hardworking and knowledgable Indian familes who work extended hours, you can program your PVR to record 2 channels simaltenously if the TV is not ON.

Service will be made available in 12 Tier-I Indian cities first and then rolled out on PAN India basis. This leaves Reliance Big TV DTH and Airtel Digital TV behind in the race :-)

Dish TV - Tata Sky - Big TV- Bharti Telmedia

The following chart shows comparison of the top 4 Diredt to Home [DTH] SErvice Providers in India on various parameters.


Technology: The MPEG-4 compression technology used by Sun Astro and RCOM and to be used by Bharti is more advanced than the MPEG-2 compression technology currently being used by incumbent players Dish TV India and Tata Sky. RCOM and Bharti would also benefit from the synergies with existing technology and billing platforms and service support systems in their telecom business.

Distribution network: Dish TV has a decent but fast-growing distribution network. For the quarter ending 30 June 2008, Dish had 38,000 dealers covering 4,500 towns. Bharti and RCom will leverage on existing wireless distribution network.

Content advantage/experience: Dish TV scores above the competition on this metric. We expect Dish TV to benefit from its parent company Zee's long and strong pedigree in content generation.

Brand strength: We note that Tata Sky has built a strong brand image due to its heavy promotional activity in the past year. Bharti and RCOM are established pan-India wireless players and their execution track records imply impressive DTH service roll-outs, in our view.

Dish TV 125 crore promotions

Anticipating a huge rise in demand for direct-to-home (DTH) service in the future, Dish TV is planning to spend Rs 100-125 crore this year for marketing and promoting its brand in a move to woo more customers.

The DTH industry is currently dominated by Dish TV, having a subscriber base of 3.5 million, followed by Tata Sky and Sun TV. Major players like Bharti, Reliance and Videocon are also planning their entry in to this sector soon.

The rise in future demand is due to the availability of 2,000 channels in the digital domain compared to 60 channels in the analogue cable TV. The company has roped in celebrity star Shah Rukh Khan as its brand ambassador

Reliance Big Digital TV DTH

The Anil Dhirubhai Ambani Group-led Reliance Communications' new arm "Big Digital TV DTH" is set to launch nationwide commercial direct-to-home (DTH) services from August 15, 2008. The company has placed order for 5 million set top boxes with Korean and Taiwanese vendors to meet its requirements in the first year

Reliance to Order 5 Million Set-top Boxes

Reliance Big TV DTH has informed us that the company is looking for vendors in Taiwan and South Korea to supply 5 million set-top boxes for their Direct To Home venture. Each set-top box will cost the company between $56 to $68.The company has also booked 4 transponders with a Malaysian company.

You may recall that Tata's managed to add 1 Million subscribers in 12 months. Reliance is aiming big and plans to add at least 2 million within the first 12 months. Insiders are speculating that Reliance is likely to offer a LCD TV for 24 months subscriptions with Big DTH.

We just hope that the service will not be a dampener as Reliance Wi-max Broadband.