According to Media Partners Asia (MPA) there are 89m analog pay TV homes in India right now. With the sunset date for cable having been set as December 2014, these 89m homes need to be digitized over the next three years. Assuming the actual process takes 3-5 years, annual conversion from analog to digital works out to 18m-29m subscribers.
We believe the DTH industry is well positioned to acquire half of these subscribers which implies an annual subscriber addition of 9m-15m for the industry. Assuming Dish TV maintains 25% market share in these subscribers, the company is well positioned to acquire 2.5m-3.5m subscribers per annum over the next few years. This is without including any further growth on the Pay TV subscriber base which is currently growing at 7m-8m households per annum.
Large broadcasters like Star and Zee have come together and formed joint ventures to improve their monetization from cable operators. Similarly Sun TV and TV18 group have formed a distribution JV. This enables broadcasters to better negotiate with the MSO and improve the realization for content. On the other hand DTH operators have already become sizable players while MSOs are likely to become stronger with digitization. Thus at the industry level we are seeing consolidation on both sides.