I believe the television distribution industry in India currently finds itself facing this challenge. The strength of television distribution business can be broadly evaluated based on three parameters - technology, content and pricing.
On technology front, DTH presently has an upper hand. Superior quality of signals received at consumer premises, choices available with them to watch specific channels, value-added features (such as pay-per-view, video-on-demand, games, internet, etc) are some of the features that DTH scores over cable. That is not to say that the cable has no comparative advantages.
The possibility of converting multiple TV sets in a home on a single cable wire is not possible in the current DTH scenario, as a separate DTH set-top-box is required for each TV set. It seems that digitalisation of the cable network is the answer for the cable industry to allow it to effectively compete with DTH in providing quality service and choice to the consumer. The proposed regulatory push on digitalisation and addressability is likely to provide that much desired edge that the cable industry needs to sharpen its edge.
Content is another differentiator and on this factor, the cable business scores over DTH. Presently, most channels are available on all cable networks in the country. This phenomenon has happened gradually over the years, having overcome the confusion in the past, of content not being available on a competitors distribution platform. As if to provide incentive to DTH to catch up on this differentiator, Trai - the regulator, has now made it mandatory to share content across all platforms. It is a different matter though that since currently there is only one private DTH operator in service, the applicability and impact of this regulation is yet to be seen.
Pricing to the end consumer is the third and probably the most important factor in India in determining the strength and sustainability of a business. The cable business has been in the country for over a decade now and the more matured and active players have recovered most of the money they had invested into this business. On the other hand, DTH is a relatively newer technology where the players are in the process of investing resources and obviously, are yet to recover their costs.
Accordingly, one of the challenges for the DTH operators lie in having a magical fix on its pricing to be offered to the end-consumer so as to convert, add and then sustain consumers on its platform. In addition to the above three parameters, quality of service is another factor that DTH presently scores over cable. However, since as of now, DTH does not have as strong a hold over content, pricing of services assumes supreme importance in the present scenario.
In conclusion, Will DTH eat up the cable business-probably not; will DTH bite into the cable business- surely yes; the question then remains - how much and when And the answer to both these will depend on the regulatory and business factors discussed above.
The writer is head, entertainment and media practice, PricewaterhouseCoopers, India