Given that DTH companies have created brands of high trust and value, they will look to exploit them in different ways. Firstly, in the related area of entertainment, and then, in other areas of interest to their subscribers.
In the middle term, DTH companies will leverage their customer connect — and ability to bill and collect from customers — to provide greater content and entertainment offerings. Non-linear revenue sources like on-demand content, niche OTT platforms, broadband services and entertainment -related ticketing services will form a natural add-on to existing offerings.
The players have the natural advantages of being in a position to connect with their subscribers, market services to them and know their behaviour through the application of analytics. Many DTH companies are working towards launching OTT and other VAS services, and tying up with content producers and distributors for this very reason.
On the non-entertainment side, alternate monetisation of the subscriber base could be undertaken through, say, wallets, education products, home assistance products, financial products etc. These will gain importance for DTH companies to widen their service offerings. Given that DTH has no return path for content or data, but is capable of only one way traffic, integration with the mobile phone or a broadband service will be critical. In the long term, DTH companies will use their core assets — subscriber base, analytics -led subscriber understanding and payment gateways — to build a wider service offering and leverage their brands.The DTH segment is coming into its own. India’s largest DTH company, Dish TV, recently turned profitable, and this bodes well for the industry. Most players are now in the 10 million plus active subscriber range, and have achieved scale. The industry has created a premium positioning in the minds of consumers, riding on superior picture quality, friendly user interface, reliability of service, quality customer interaction and value added services. Association of DTH brands with Bollywood celebrities has also assisted in making it an aspirational product as compared with cable services.
Growth will be driven by subscriber base growth and ARPU increases over the next few years. The industry has seen a stable growth rate of over 10% over the last few years, and has taken advantage of the digitisation mandate in the country. Phase III areas and some parts of Phase IV of digital addressable markets will continue to provide growth impetus into the next two to three years. ARPU increases will be on account of inflation (cable prices continue to remain at a fraction of broadband prices in India), increased HD channel offerings, more niche pay channels and basic video on demand services including services around education, children, religion, music etc.
The author is partner and head – advisory, media and entertainment, EY