This will lead to a windfall revenue gain of R30,000 crore for the direct-to-home service providers and the organised cable companies said the latest report on Asia-Pacific Pay TV market report by international media research firm Media Partners Asia (MPA).
As a result of the three-year mandatory digitisation drive, a number of mergers and acquisitions (M&A) and fund raising activities will take place in India, the report said. However, the DTH players will lead the race cornering around 65% of the revenues while broadcasters will reap the benefit of the DTH versus Cable competition generating R34,000 crore in revenues during the period.
According to MPA report, while DTH firms Dish TV ($409 mn) and Tata Sky ($450 mn) are among the top 10 leading pay-TV platforms by revenue, Sun TV ($255 mn), Star India ($193 mn), Zee Entertainment ($168 mn), and Sony India ($125 mn) are among the leading profitable broadcasters.
"The digital pay-TV penetration of TV homes in India will grow from less than 20% in 2011 to 50% by 2016, and 61% by 2020," said the MPA report.
According to MPA executive director Vivek Couto, the majority of DTH platforms will be generating free cash in the next three to four years.
The active DTH subscriber base (i.e. paying customers only) could grow from 29 million in 2011 to 69 million by 2016, and 93 million in 2020. This implies a 46% share of the overall market by 2020 (versus 23% in 2011), and a 65% share of the digital pay-TV market, Couto said. However, rise in subscriber acquisition cost due to competition and satellite capacity constraints will remain the concern for the DTH players, he said.
The MPA report said the DTH industry revenues will reach almost $4 billion by 2016 with revenue growth largely driven by expanding the subscriber base.
ARPU growth will be partially limited as DTH expands nationally, with low-income homes coming into the mix, although we also see a greater contribution from high-ARPU HD subscribers, the report said.
Digital cable subscribers, MPA said, will reach approximately 33 million by 2016 and 48 million by 2020, with cables consumer proposition, in the form of channel packs, HD, VAS and broadband, driving subscriber and ARPU growth.