Market Research India - Direct to Home (DTH) Market in India 2009

Direct to Home (DTH) Market – India
Direct to Home (DTH) Market India
December 2009

Executive Summary

 Market is valued at INR 15 bn in 2008‐09 and projected to reach INR 30 bn in 2009‐10
Market  Estimated subscriber base of 15.17mn, expected to reach 36 mn in the next 5 years
 Current overall share of DTH households among total TV households of India is pegged at 13%

Drivers:
Challenges:
 Growing middle‐class and rising  Getting a share of the cable driven market and
disposable income facing the new age IPTV
Drivers &
Drivers &  Increasing television penetration and sale
Increasing television penetration and sale  Trapped in TRAI’s content guidelines
Trapped in TRAI s content guidelines
Challenges of LCD monitors  Demand supply gap for transponders in a 7
 Price war and different package options player broadcast market
attracting consumers  Cap on Foreign Investments
 Advantage over traditional cable operators
g p

 Technological Innovations
Trends  Shift from price war to offering exclusive VAS
 Combined retail of LCDs and DTH connections
 Partnerships with movie distributors
 Dish TV, the first company to enter is the largest player, controlling ~32.5% market share
Competition  Steep competition has led to a surge in advertising spend to improve penetration
 Due to growing number of players in the market, Average Revenue Per User ( (APRU) will decline
)
owing to price war and discounts

DIRECT TO HOME (DTH) MARKET ‐ INDIA.PPT 2

•Market Overview
•Drivers & Challenges
Drivers & Challenges
•Trends
•Regulations
•Competition
•Key Developments


Direct‐to‐Home (DTH) has transformed the television
transmission in India
DTH ‐ The Concept Functioning of DTH
•TV channels are transmitted from the satellite Ku band satellite
to a small dish antenna mounted on the rooftop
of the subscriber's home
•A DTH service provider has to lease Ku‐band
transponders from the satellite
•The encoder converts the audio, video and data
•The encoder converts the audio video and data
Middlemen like
signals into the digital format and the cable operators
multiplexer mixes these signals are not in picture
•Unlike Cable TV, the broadcaster directly
connects to the user using Direct To Home
connects to the user using Direct To Home
(DTH) network Uplink Station Broadcaster TV Dish with transmission decoder

2000 2002 2004 2006 2008

• 2001: Ban on KU • 2003: First private • 2004: DTH became • 2006: DTH • 2008: 15.17 mn
band lifted. license granted to operative along subscriber base DTH subscribers
Guidelines by TRAI Dish TV with DD Direct+ touched 1 mn reported by 5 key
for DTH operations
for DTH operations players


DTH industry in India has looked upbeat in recent years but
remains a niche segment
Overview Segmented Pay TV Subscriber Base
•Estimated market value of INR 15 bn in 2008; Digital Cable
expected to reach INR 30 bn at the end of 2009 Subscribers in mn DTH

•In the Indian Pay‐TV market, DTH penetration 100 Analogue Cable
4
2
is only 17.24% (June 09), reaching 15 mn out of 80 15 22
3 4 1
60 1
87 mn paid subscribers
40 69 70 69
•Current overall share of DTH households
•Current overall share of DTH households 60 63
20
among total TV households of India is pegged 0
at 13% 2006 2007 2008 2009e 2010e
•The market has 6 private broadcasting Distribution across TV Households (HH)
companies namely Dish TV, Tata Sky, Sun
companies namely Dish TV Tata Sky Sun
Direct, Air Tel and Videocon and one Free to HH (%age) Cable HH
Air operator – Doordarshan Direct 80
DTH HH
 New entrant: Videocon in May 2009
60
•60% of DTH subscribers reside in rural areas
and towns with a population under 1 mn and is 40
61 64 64 64 64
largely dominated by free‐to‐air Doordarshan 20
Direct service 9 13 17
0 1 3
2006 2007 2008 2009e 2010e


DTH services has established its presence on a pan‐India
basis and is dominated by the northern and western region
Indian DTH Market Major Geographical Regions
•North India and Western India together
contribute over 8 mn DTH subscribers, while More than 48% of DTH subscribers

the southern market contributes 3 mn
•The states of Maharashtra, Goa, Punjab, Uttar Punjab
Pradesh, and Rajasthan are the leaders in DTH
subscription, contributing over 6.5 mn DTH
p , g
connections to the overall base Rajasthan
Uttar Pradesh

•Eastern India is an untapped market with
consumers looking for digital picture quality
preferring digital conditional access system
preferring digital conditional access system
(CAS) over DTH due to its pricing Maharashtra
•The DTH potential in India is pegged at 80 mn
households, divided between the North and
the South almost equally
the South almost equally

Sun TV dominating
the market in South
the market in South


Subscription and lease rental are major sources of revenues;
Players are focusing on some key areas to increase revenues
Revenue Model
Subscription Revenue Lease Rental Advertisements

• Revenue generated from • Earnings from renting out set‐
subscribers based on various top boxes (STB) and dishes to • Advertisement revenue
packages offered differing subscribers model is changing
 Tata Sky moved from ‘flat fee’
from one another according • Players have been providing
model to the cash per lead
model to the ‘cash per lead’
to the channels broadcasted STB’s at subsidized rates model
• Includes revenues from towards increasing subscriber  Dish TV provides matrimonial,
various value added services base in this highly jobs and payment services
such as movie‐on‐demand competitive market

Key focus areas for operators to increase revenues
First‐mover
Appropriate Content
pp p Exclusivity
y After Sales Service
Advantage
Ad t
• Offering • Obtaining exclusive • Quick installation, • Being the first to
appropriate rights for minimizing billing provide new
packages based on broadcasting e.g. errors and reduce services towards
regional demand
i ld d sports events
t t signal disruption
i l di ti closing competition
l i titi


Programming cost and subscriber acquisition cost are high
in DTH market
Overview Subscriber Acquisition Cost
• Programming cost is the largest cost for a DTH
Parameter Cost (INR)
operator
 Determined as a proportion of subscription revenue that Cost of Set‐top‐box
C t fS t t b 1,450
1 450
the operator collects from subscribers
Cost of Dish, Card, Wiring, Customs
• Growth in subscriber base is expected to lead to a fall 1,450
duty, VAT
in advertising expenditure to 4% of overall revenues
by FY 12
by FY ’12 Total Customer Premise
2,900
2 900
Equipment Cost (CPE cost)
• On an average, the operators will take 7‐8 years to
break‐even Installation cost 500
Dealer commission 400
Operators Cost Structure
Marketing Expenditure
Marketing Expenditure 500
Total of Other Costs Entailed 1,400
20% Programming Cost
Dealer Commissions
Total Cost 4,300
40% Advertisement Upfront Collected
Upfront Collected 1,760
5%
Transponder Rentals Subscriber Acquisition Cost (SAC) 2,510
6%
Employee Cost
6% Administrative Cost
10% SAC is borne by the DTH players affecting their
13% Other Operating Costs
p g
profit margins substantially
profit margins s bstantiall


•Market Overview
•Trends
•Regulations
•Competition
•Key Developments


Drivers and Challenges

Challenges
Getting a share of the cable driven
market and facing the new age IPTV

Drivers Trapped in TRAI’s content guidelines
The growing middle‐class and rising Demand supply gap for transponders
disposable income in a 7 player broadcast market
Increasing television penetration and
I i t l i i t ti d
sale of LCD monitors Cap on Foreign Investments
Price war and different package
options attracting consumers
DTH advantage over traditional cable
operators


Rising middle income segment will be a key driver for
subscription acquisition of DTH providers
The growing middle‐class and rising disposable income Impact
• The middle class population in India is expected to reach half a billion by 2030 and currently
comprises about 64% of total population
• Rise in disposable income of the working class coupled by the new digital wave will overlook the
price factor of DTH vis‐à‐vis cable

Aggregate Annual Disposable
Total No. of Household (mn)
( ) Income (INR tn)
Income (INR tn)

Per household annual
281 income (INR ‘000) 90
3%
244 12% Core target 24%
2% 1%
207 consumer
23%
5% 1% 1% 34%
groups
23%
Globals >1000 44
44%
43% 15%
Strivers 500‐1000 9%
34%
33% 24
Seekers 200‐500 9% 34%
Aspirers 13% 7%
49% 90‐200
30% 49% 33% 15%
18% Deprived <90 23% 9% 3%

2005 2015 2025 2005 2015 2025


Rapidly growing television market is expected to boost the
DTH industry in India
Increasing television penetration and sale of LCD monitors Impact
• The television market, which is valued at INR 241 bn in 2008, is estimated to grow at 14.5 %
over 2008‐13
• Th
The number of TV households is forecasted to grow at 3.4% over 2009‐13
b f TV h h ld i f t dt t 3 4% 2009 13
• About 65% TV HHs have cable/satellite access
 The untapped 35% hold a huge potential for DTH services
• Upgrade to LCD (Liquid Crystal Display) TVs has shifted viewer‐ship trend to DTH/digital
broadcast
 Over Jan‐Apr 2009, the market for LCD and plasma TVs grew by 81.6% over the same period last year
• Flat panel TVs with DTH connections are being retailed together as a part of a marketing
strategy
Rising TV Households TV Technology Market Share

CRT
mn +5% %
96 93 LCD
150 136 142 100 86
122 129 74
110 116 80
103 58 56
100 60 43
41
40 25
50 13
20 3 7
0 0
2004 2005 2006 2007 2008 2009e 2010e 2007 2008 2009e 2010e 2011e 2012e


Increased competition in a six‐player oligopolistic market
fuelling growth
Price war and different package options attracting consumers Impact
• Six private pay‐DTH players of which Videocon entered in July 2009 making competition steeper
• Price war has lead to drop in upfront charges and subscription fees
• Wider channel package options are being priced to suit different customer segments
• Aggressive marketing by DTH operators is spreading product awareness and penetration in Tier
2 and Tier 3 cities
• Promotion of value added services like movies‐on‐demand, educational content, travel booking,
matrimonial etc also attracting subscribers
Fall in Upfront Charges Number of Packages Offered

Increasing options
INR
4,000 for consumers
for consumers
10
4,000 9 based on varied
‐33% demand patterns
8
3,000

2,000 4 4
1,200
1,000

0
Aug 2006 Mar 2009 Sun Tata Sky Dish TV Reliance Airtel


Limitations of the cable operators cause cable viewers to
switch broadcast medium
DTH advantage over traditional cable operators Impact
• Satellite transmission network in DTH enables digital picture quality
• Unlike cable operators, DTH operators also provides interactive value added services like movie
requests, job search engines etc.
• Cable industry does not have Right of Way (RoW) privileges, and is pulled over buildings and
tree tops unlike dishes leading to disruption
• Disturbance due to power‐cuts at a cable operators location is avoided
• DTH services being satellite aided reach remote areas where cable/wires cannot penetrate
• Mobility at the time of shifting residence is possible


Threat of substitutes is the foremost challenge faced by DTH
operators
Getting a share of the cable driven market and facing the new age IPTV Impact
• Cable operators have the advantage of industry establishment since 1992
• Heavy programming costs subscriber acquisition costs and high taxes price
Heavy programming costs, subscriber acquisition costs and high taxes price
Analogue Cable DTH higher
 While cable operators pay 4% revenue as taxes, DTH providers pay over 30%
• A recent 5% import duty on STBs has added to the costs of DTH operators

• Digital cable with a subscriber base over 1mn is a cheaper substitute
 A significant challenge for DTH as their offerings are similar
• Policy guidelines approved for Headend In The Sky (HITS), that digitally
transmits channels to the cable operators via satellite
Digital Cable  Relies on existing cable networks with no extra installations and therefore comes
cheaper
 HITS will operate on C‐band as well as Ku‐Band (so far used by DTH)
 Better picture quality likely as Ku Band is vulnerable to rain with weakens signal
strength

• High Broadband penetration makes IPTV a potential success
 Television signals sent over telecommunications line‐a hassle free proposition
IPTV for end‐user
 Customer can choose a program instead of taking a generic package in case of
DTH


Inability to provide exclusive content and limited
transponders affect the competitive edge of providers
Trapped in TRAI’s content guidelines Impact
• Competition in global DTH markets thrive on providing niche content
• TRAI prohibits a broadcaster from offering content exclusivity to a specific player
• The competition rests on pricing strategy alone which might shrink the industry

Demand supply gap for transponders in a seven player broadcast market Impact
• A transponder (Transmitter‐responder) can beam 10‐16 channels depending on MPEG2 or
MPEG4 technology
• The demand for new channels is increasing with 400 plus channels already in India
, p p
• Therefore, each DTH provider will need about 15‐25 transponders and dedicated satellites
• Regulations permit operators to use only Indian satellites or foreign satellites approved and
leased by Indian Space Research Organisation (ISRO)
• In 2008‐09, ISRO leased only 36 transponders
p pp y g p, p
• Operators feel that to meet this demand supply gap, additional 72 transponders are needed by y
2015 Ku band Transponder Usage by DTH Players

12
10
7 7 7 6 5

Tata Sky Dish TV Sun Big TV Airtel Digital Videocon D2H DD Direct


Foreign investments limited by Telecom Regulatory
Authority of India’s (TRAI) stipulations
Cap on Foreign Investments Impact
• DTH is a capital intensive industry
 Hardware, CPE and capacity building account for the majority of the total investment required
 It takes about 6‐7 years to break even
• Limiting foreign investment prevents cash constrained operators to expand operations
• Current DTH regulations limit FDI/NRI/OCB/FII to 49% in which FDI cannot exceed 20%
• On the other hand HITS, the competing digital technology broadcast platform, enjoys FDI cap of
74% which makes the competition uneven
74% hi h k h ii


•Market Overview
•Trends
•Regulations
•Competition
•Key Developments


Key Trends

Partnerships with movie
distributors Technological Innovations

Trends

Combined retail of LCDs and Shift from price war to
DTH connections offering exclusive VAS


Technological upgrades for enhanced entertainment has
been a key emerging trend in the Indian DTH industry
Technological Innovations
• MPEG4 is a compressing and multiplexing video solution Providing better
• Electra encoders in MPEG4 allow 22‐25 channels per transponder compared
p p p services through
services through
to 15‐17 on MPEG2 cost effective
Adoption of MPEG4 • Broadcasters therefore can provide greater number of channels with a single
transponder
methods
Technology
 Compression efficiency produces High Definition pictures at reduced energy
consumption
• Technology is used by Sun Direct Big TV AirTel Digital TV and Videocon
Technology is used by Sun Direct, Big TV, AirTel Digital TV and Videocon

• DVR is an upgrade of the existing STB with an inbuilt storage capacity to
pause, record and replay live television
• Tata Sky plus, Air Tel Digital TV and Hathaway Digital cable offer this high end
Digital Video
Digital Video service
i
Recording (DVR) • The pricing is about 4 times that of the standard DTH STB
• Existing DVR owners watch an average of 1.3 hours of recorded TV and 2.9
hours of broadcast TV
• Comprises of upwardly mobile customers and is fast catching up

• This interactive service allows viewers to switch between various angles of
camera coverage, widely used in broadcasting cricket matches
• Features include choice of language of commentary, player stats, ball
Multiple Angle Feed trajectory information and highlights on demand
• This service is offered by Tata Sky, Dish TV, Reliance Big TV
 Big TV ( Jun ‘’09) partnered with ESPN to offer interactive cricket, a paid service during
T20 world cup


VAS provided by players is expected to develop the market
in terms of innovation and revenue generation
Shift from price war to offering exclusive VAS
• Competition in DTH market is primarily in the form of price war with no content exclusivity
Differentiator in
• VAS offered as separate pay channels gives DTH operators a competitive edge over the other
a highly
a highly
• Current share of VAS in total subscription revenue is under 2% competitive
• Some of the services like Big TV’s iGames, iCooking, iNews and iAstro are being offered free for a market
certain tenure before being converted to paid services
• Similarly Dish TV offered a bargain of free STBs if the customer paid for the VAS

Operator Channel/Offering
Dish TV • Monster.com (MonsterJobs Active for job search); ICICI Bank (ICICIActive for bank
service information); Shaadi.com (Shaadi Active,a matrimonial); Yaatra.com
(Travel Active for travel planning); Indiatimes.com (Mobile Active for mobile
(Travel Active for travel planning); Indiatimes com (Mobile Active for mobile
services and downloads); Zee Sports (Sports Active); Zee News (News Active)
Tata Sky • Hungama Digital Media (Active Mall for mobile shopping experience); Ferns n
Petals (Flower delivery service); 24X7 Guru.com (Active Wiz Kids); NDTV Good
Times ( Active Cooking for latest recipes); Ganesha Speaks (Active Astro for
( Active Cooking for latest recipes); Ganesha Speaks (Active Astro for
interactive astro‐forecasts); Star News (Active Star News for interactive news)
Big TV • Reliance Money (ISTOCK for portfolio management); CNN‐IBN (iNEWS); ESPN
(Icricket)
AirTel
AirTel
• Pizza Hut (iPIZZA‐ordering pizza on DTH); Makemytrip (iTravel); ESPN (iSport)
Digital TV


Tie‐ups with TV manufacturers and movie distribution
houses has been growing
Combined retail of LCDs and DTH connections
• DTH operators tied up with LCD manufacturers to offer attractive schemes to promote sales
 Dish TV tied up with LG where purchase of the LCD, the DTH connection came free Combo offers
 Tata Sky and Samsung offered a scheme under which the size (in inches) of the LCD purchase would equal positively
the discount given. For eg: a 21 inch TV would be eligible for a 21% discount impacted sales
 Reliance Big TV in association with LG electronics offered discount on LCD sets along with a free 3 months
subscription of Big TV’s Lite pack or South Delight pack of channels
•B i
Being complementary utilities, the sale of LCDs pushed the sale of DTH connections
l t tiliti th l f LCD h d th l f DTH ti
Partnerships with movie distributors
• Reliance Big Pictures, Percept Pictures, UTV Movies and Dharma Productions tie up with DTH
providers to release movies on DTH medium Symbiotic
 Main aur Mrs Khanna premiered on Dish TV and Big TV. Other recent movies launched include Kaminey, Rock
relationship
relationship
On, Wake Up Sid etc between players
and distributors
• Dish TV has entered into 50:50 revenue‐share deal with the production houses
• A family of four have to spend as much as INR 1,000 to see a movie in multiplex. But with Movie
on Demand service on DTH, they can watch a movie within 2‐3 weeks of its release at a very little
D d i DTH th t h i ithi 2 3 k f it l t littl
price (INR 50‐150 per movie)
• Currently, under 5% subscribe to movies on demand and a DTH operator makes about INR 30 mn
from subscription revenue of a new film
• With DTH subscribers expected to reach 20 mn by 2010 DTH operators can generate about INR
With DTH subscribers expected to reach 20 mn by 2010, DTH operators can generate about INR
100 mn of revenue from movie on demand if even merely 5% subscribe to it


•Market Overview
•Trends
•Regulations
•Competition
•Key Developments


Key Regulations

Interoperability of STB High Taxation

Regulations

Tariff Regulation Customs and Excise Duty


DTH industry is one of the most highly taxed areas in media
space
• Cable operators pay only 5% of their revenues as taxes, while DTH industry is heavily taxed
• License Fees: 10% on adjusted gross revenue  (expected to be reduced to 6% but is being
delayed)
High Taxation • Service Tax: 10.2% on gross subscription revenue
• Entertainment Tax: 0‐ 30% depending on the state/territory (30% tax in Uttar Pradesh
makes business unviable )
• Value Added Tax (VAT): 12% on the cost of hard ware
• New Direct Tax: 2% of gross assets
• Apart from these, Octroi, corporate tax etc. are additionally levied

• Sale of Set Top Boxes (STB) is one of the key revenue generators for operators
Sale of Set Top Boxes (STB) is one of the key revenue generators for operators
• Excise duty on STBs were exempted in 2003 to facilitate introduction of conditional access
system (CAS) in the country
Customs and • In the Budget 2006, the exemption on excise duty was withdrawn, but customs duty was
Excise Duty
Excise Duty , p g y
reduced from 15% to Nil. However, there was no corresponding reduction of customs duty on
inputs used in the manufacturing of STBs
• In budget for fiscal 2009‐10, government withdrew the custom duty exemption on STB  for
television broadcasting and imposed 5 % custom duty on import of  STB and allows import of
inputs at 5%


Lack of explicit tariff regulations will impact the industry
growth

• No explicit tariff regulation has been provided by the Telecom Regulator Authority of India
(TRAI) for DTH services
Tariff Regulation • Tariff rates charged from the DTH operator by the broadcaster are 50% lower than the rates
Tariff rates charged from the DTH operator by the broadcaster are 50% lower than the rates
charged from the local cable operator in Non‐CAS areas
• CAS operators have to pay INR 5 to the broadcaster per channel while DTH operators pay INR 2.5 per
channel
• TRAI has also mandated broadcasters to offer their channels on an individual (a la carte) basis
to DTH operators and not insist on the entire bouquet
• DTH operators are demanding further reduction in tariff on ground that ‐
• CAS and cable operators are under reporting their subscriber base as they lack transparency
• CAS and cable operators do not have to pay huge license fees

• Currently only MPEG2 users are commercially and technically interoperable according to
Interoperability
Interoperability
of STB mandates
• MPEG4 users who have costlier STBs have not yet received guidelines for interoperability
• Laying down regulations could affect the churn rate and increase expenditure of DTH operators


•Market Overview
•Trends
•Regulations
•Competition
•Key Developments


Competition in the DTH market has grown with all six
players on a subscriber acquisition spree
Overview Market Share by Volumes
•Oligopolistic market structure
•Competition is high as market is saturated
Competition is high as market is saturated
with six private players and one free‐to‐air AirTel Digital TV

provider namely DD Direct 6.7%
Big TV
•Steep competition has led to a surge in 10.4%
32.5%
32 5%
advertising spend to improve penetration
•With greater number of players in the market, Sun Direct Dish TV
Average Revenue Per User (APRU) will decline 24.5%
•DD Direct Plus is planning to move to a paid
model increasing competition 25.8%

 Plans on offering 144 pay channels, 4 hi‐definition Tata Sky
channels and 50 radio channels
•The scope for new entrants is limited as the
challenge posed by high cost of CPE and the
high costs entailed for leasing transponders
high costs entailed for leasing transponders


Analysis of the various DTH players in India, their offerings
and market presence

Players

Subscribers (mn) 5.3 4.2 4.0 1.7 1.1 NA

Total channels 240 190 200+ 200+ 150+ 170

CPE + Installation
1,790
, 2,599
, 1,250
, 1,490
, 1,750
, 1,790
,
Cost (INR)
C t (INR)
Base Package (INR) 113 125 110 90 110 150
Channels in Base
135 75 130 81 113 120
Package
Interactive Features 12 11 None 5 7 4
Compression
MPEG2 MPEG2 MPEG4 MPEG4 MPEG4 MPEG4
Technology
International
I t ti l Astro‐
At
Dish TV (US) SKY TV None None None
Partners Malaysia
Group Channels ZEE Star Sun None None None


Players in the Market (1/6)

Company Snapshot: Dish TV
Corporate Information Packages Offered
Headquarters Noida Packages Cost (INR)
Cost (INR) Description

Silver (2) 113 135 Channels
Established Oct 2003
Gold (2) 190 155 Channels
Financials FY ’09: Revenue ‐ INR 7.4 bn; Loss – INR 4.8 bn
Platinum (2) 283 185 Channels

• Subhash Chandra – Chairman Child 150 ‐204 Across 28 cities
Key People
• Jawahar Goel – MD Titanium 3617 (p.a.) 188 channels

Business Highlights Interactive Services Offered
• Offers largest number of channels with focus on strong • Movie‐on‐Demand – Watch movies any time on demand
regional content in linguistic zones • Shaadi Active and Jobs Active ‐ Matrimonial & job search
• It began providing up‐front subsidy on set top boxes to acquire
• Travel Active ‐ Planning tours on TV via Yatra.com
subscribers
• Mobile Active ‐ Downloading mobile services
• Large sales and distribution network 600 ‘Dish Shoppees’ to
Large sales and distribution network ‐ 600 Dish Shoppees to
provide demo’s to prospective users (Jun ‘09) and wide reach • ICICI Active ‐ TV banking with ICICI Bank
to 6,600 towns and 48,000 dealers (Sep ‘09) • Bhakti Active  ‐ Active worship
• Received a PE investment of INR 4.6 bn through GDR from • Astro Active  ‐ Astro forecasts and predictions
Apollo Management in Nov ’09
• Sports & News Active  ‐ Interactive experience of sports/news
• Heavy capex investment has enabled the company to deliver a
Heavy capex investment has enabled the company to deliver a
high end audio‐video quality • Multilingual services ‐ Address regional language needs

Note: Rates are on a monthly basis



Company Snapshot: Tata Sky
Headquarters Mumbai Packages Cost (INR)
South Starter/ Value/ 125/200/260
75/95/109/139 channels
Established Aug 2006 Saver/Jumbo /270
Super Hit 160 63 channels
Financials FY ’09: Revenue ‐ INR 8 bn
Super Value Kids 225 124 channels
Super Saver 275 124 channels
Key People • Vikram Kaushik – CEO & MD
Annual Mega Pack 5500 (p.a.) 172 channels, 12 movies

• Most popular service provider among high income households • Active Mall ‐ Shopping on TV
• Received a PE investment of INR 2.5 bn from Temasek • Active Wizkids/Learning/Topper ‐ Learning for kids
• The company, till date, has invested INR 250 mn on • Active Stories ‐ Stories on TV
promotional activities
• Active Games ‐ Interactive games
• Ch
Changed its advertising model where advertisers will pay for
d it d ti i d l h d ti ill f
the number of consumers who have shown interest in their • Active Darshan ‐ 24X7 darshan of Shirdi Sai Baba, Mumbai’s
products SiddhiVinayak, ISKCON and Kashi Vishwanath
• It is estimated that the company will invest INR 40 bn to create • Active Cooking ‐ Recipes anytime
necessary infrastructure to support its expanding customer‐ • Active Astrology ‐ Daily forecasts
base
• Active Star News ‐ Instant news
• Showcase ‐ Order latest movies and watch multiple times



Company Snapshot: Sun Direct
Headquarters Chennai, India
Chennai India Packages Cost (INR)
Freedom Tamil
Established Dec 2007 990 for
Freedom Telegu 9months
130+ channels
Financials NA Freedom Malayalam 440 for
4months
Freedom Kannada
Freedom Kannada
• Kalanithi Maran – Chairman & MD
Key People Shine Pack
• Tony D’Silva – COO 925 for 7
Bengali Shine Pack months
Non‐south pack
Oriya Shine Pack 525 for
4months
Business Highlights J& S e ac
J&K Shine Pack
• The four states of Tamil Nadu, Kerala, Karnataka and Andhra Jumbo Pack North 30 channels with active Base
300
Pradesh account for 70% of its subscribers Jumbo Pack South pack
• Plans on increasing its marketing budget from INR 1.2 bn to
INR 1.5 bn in FY10
• It plans on constantly investing in customer equipment,
hardware and capacity building
• Plans on capitalizing on its major strength that it has access to
low cost content from group company Sun Network
• Towards expanding its operations across India and plans on
Towards expanding its operations across India and plans on
investing INR 20 bn on the development of infrastructure




Company Snapshot: Big TV
Headquarters New Delhi, India
New Delhi India Packages Cost (INR)
Value Pack 90 81 channels
Established Aug 2008
Bronze pack 135 111 channels
Financials NA Silver(2) 170/180 137 for SI, 123 for RoI
Gold (2)
Gold (2) 210/225 150 for SI, 138 for RoI
150 for SI 138 for RoI
Key People • Arun Kapoor – President Diamond (2) 280/270 165 for SI, 152 for RoI
Platinum (2) 340,315 169 for SI, 155 for RoI

• Plans on increasing its marketing spend to about INR 1.6‐1.8 • iSTOCK ‐ Information on stock market with features like stock
bn ticker, latest mutual fund updates etc.
• Tied up with a Warner Brother channel and Korean and • iNEWS ‐ Instant access to news headlines
Russian channels for global content • iASTRO ‐ Comprehensive daily and monthly tarot, numerology
• Attracting customers by reducing price of its ay‐per‐view (PPV) and zodiac predictions
prices of premiere (new) movies by 50% in comparison to its • iCRICKET ‐ Active during the ICC T20 World Cup 2009
competitors • iGAMES ‐ Featuring Kurakku, Theivin Monkeys, Buzz Words,
Jinja Ninja, Solitaire, Table Football, Happy Word Time and
Pool

Note: Rates are on a monthly basis; SI: South India, RoI: Rest of India



Company Snapshot: Airtel Digital TV
Packages Cost (INR)
Headquarters
H d t Gurgaon, India
G I di
Super Value 127 110 channels
Established Oct 2008
New Value 160 Super Value + 8 channels
Financials NA Economy 221 New Value + 37 channels

• Ajay Puri CEO
Ajay Puri – CEO Mega 304 Economy 22 channels
Economy + 22 channels
Key People • Atul Bindal – President (Telemedia Ultra 364 Mega + 7 channels
Services) Range of 186 channels with the
South Packages(6) 110‐400
option of up to 3 south top ups

• Plans on adding a net 1.6 mn new DTH subscribers by March • iAstro ‐ Daily astro forecasts
2010 • iLearn – For young students to revise classroom lessons
• It is expected to target the rural market because of its large • iMatinee ‐ Buy tickets on TV for latest movies on multiplex
distribution network created by its dominant presence in the • iNet ‐ Internet experience on TV
telecom space
l
• iNews ‐ View all sections of news on one screen
• iSports ‐ Watching sports with match details & player stats
• iTravel ‐ Planning vacations on TV through Makemytrip
• iPizza ‐ Ordering pizza at the click of the TV remote
• iShop ‐ Purchasing a variety of discounted products though TV




Company Snapshot: Videocon D2H
Packages Cost (INR)
Headquarters
H d t Mumbai, India
M b i I di
Gold 150 120 channels for RoI
Established May 2009
Diamond 275 160 channels for RoI
Financials NA South Gold 150 130 channels for SI
South Diamond
South Diamond 275 170 channels for SI
170 channels for SI
• Venugopal Dhoot – Chairman
Key People 130 channels for Andhra
• Anil Khera – CEO AP Gold 150
Pradesh (AP)
AP Diamond 275 170 channels for AP

• DTH services are offered through its subsidiary Bharat • Active Darshan ‐ Online religious visit and aarti at holy places
Business • Active Travel ‐ Travel planning, ticket booking and
• Plans to invest INR 10 bn over 2009‐2011 on marketing accommodation
activities • Active Cooking ‐ Recipes and cooking tips from master chefs
• Expects to boost its DTH subscriber base via large scale • Active Health and Fitness ‐ Channel on fitness training and
television sales by offering combo‐packs (selling DTH packages yoga
with television sets)

Note: Rates are on a monthly basis; SI: South India, RoI: Rest of India


•Market Overview
•Trends
•Regulations
•Competition
•Key Developments


Key Developments

Date Development
Sep 2009 EchoStar Corporation, a US based company which sells satellite television services under the Dish Network
brand, plans on entering the Indian market by picking up a stake in an existing DTH company.
Nov 2009 Reliance Communications, which entered the market with their brand Big TV, plans on expanding their
portfolio in this space by offering high definition (HD) television content to customers apart from launching
premium IPTV services in select cities.
Jun 2009 Videocon, which has recently entered the DTH market, plans on targeting 1.5 mn subscribers for its direct‐
to‐home (DTH) service in its first year of operation. It invested INR 50‐60 mn on developing new liquid
to home (DTH) service in its first year of operation It invested INR 50 60 mn on developing new liquid
crystalline design televisions that can directly receive DTH signals without set‐top boxes.
Apr 2009 BIG TV, the DTH arm of Reliance ADA Group, launched Premium Express Service across India. This is an
unique after‐sales service initiative from BIG TV with the primary objective to cut down market response
time. It is targeting on addressing customer queries and resolve customer problems within 2 hours.
g g g q p
Apr 2009 Towards expanding its product portfolio Dish TV India is developing a new technology to beam channels in
vehicles for intra‐city travel in metros at special subscription rates. In 2008, the firm had launched Dish TV
mobile, which airs all channels, can be fitted in large cars and SUVs for inter‐city travel. This is however
being used only by Kingfisher Airlines, the Railways and Indian Navy.


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Market Research India - Direct to Home (DTH) Market in India 2009

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