The quarterly market share data for the Zee network suggests the qoq market share loss is entirely due to Zee TV, which slipped from second position in the Hindi GE segment to fourth. Zee made up most of the loss with robust ratings gains in regional channels, though it may not sustain the strong performance of Zee Bangla Cinema (Star will soon launch its Bengali movie channel). Zee may be better placed than
Sun in advertising (sustained ratings) and subscription (Chennai is yet to be digitized)
Sun presented completely
opposite trends to Zee with flagship Sun TV maintaining its (unusually) high market share, but
channels in competitive markets on a downtrend; the long-term trend of Sun’s loss of network
market share continued yoy and qoq. Unlike Zee in the North market, which faced distribution
disruptions due to digitization, Sun TV was likely not impacted given Chennai is yet to be
substantially digitized (Sun TV is anyway an FTA channel in Chennai). Sun noted traction in DTH
platforms (where Sun bouquet is pay) in lieu of digital cable but gains are likely to be modest until
DAS is implemented in Chennai.
Tuesday, December 25, 2012
Digitization a net positive but not a panacea
The TAM data and analysis of Phase-I suggests that Digital penetration is over 95% in
Delhi-Mumbai and 70% in Kolkata but lags in Chennai (26%). More important, small and mid sizedchannels (niche news, kids, infotainment) have gained market share compared with large channels (mass general entertainment). Nearly 60% of channels with pre-DAS share of 0-0.5% had a net 4% gain in viewership.
Niche channels/genres, which were reach- and capacity constrained in analog cable, have benefited from Phase-I DAS (see Exhibit 3; more capacity and greater reach).
Niche channels/genres, which were reach- and capacity constrained in analog cable, have benefited from Phase-I DAS (see Exhibit 3; more capacity and greater reach).
Thursday, November 01, 2012
Black Out in Mumbai, Delhi and Kolkata for Analog TV / Cable Signals
Media reports and our channel checks indicate that following the Phase 1 deadline of October 31, analog signals in Mumbai, Delhi and Kolkata have been largely blacked out. Despite opposition from some political parties (TMC, Shiv Sena, BJP) and a few LCOs and small MSOs, we believe government’s stringency in enforcing the blackout so far exemplifies its seriousness on digitisation.
Ad, SMS campaigns and special offers (Videocon and Airtel offering free box on annual packages) have intensified considerably over the past few days, spurring demand for set top boxes.
Over the past 10 days, there has been a huge surge in digital subscriber additions in the three cities of Mumbai, Delhi and Kolkata. As per MIB data, on October 30, ~0.1mn boxes were installed in metros, of which 0.06mn were in Delhi alone. Mumbai has already achieved 100% digitisation. Due to the late surge over the past few days, Delhi has completed 95% digitisation (97% including DTH), Kolkata has completed 83% (85% including DTH), while Chennai remains almost inert at 62% (86% including DTH). MIB has also collated DTH data for metros from DTH operators. As per the data, Delhi has 1mn DTH subscribers, Mumbai 0.75mn, followed by Chennai and Kolkata at 0.71mn and 0.32mn, respectively.
On October 31, Mumbai High Court dismissed a petition filed by LCOs to delay the Phase 1 deadline. The Madras High Court has granted interim relief to analog subscribers in Chennai by extending the deadline to November 5.
Ad, SMS campaigns and special offers (Videocon and Airtel offering free box on annual packages) have intensified considerably over the past few days, spurring demand for set top boxes.
Over the past 10 days, there has been a huge surge in digital subscriber additions in the three cities of Mumbai, Delhi and Kolkata. As per MIB data, on October 30, ~0.1mn boxes were installed in metros, of which 0.06mn were in Delhi alone. Mumbai has already achieved 100% digitisation. Due to the late surge over the past few days, Delhi has completed 95% digitisation (97% including DTH), Kolkata has completed 83% (85% including DTH), while Chennai remains almost inert at 62% (86% including DTH). MIB has also collated DTH data for metros from DTH operators. As per the data, Delhi has 1mn DTH subscribers, Mumbai 0.75mn, followed by Chennai and Kolkata at 0.71mn and 0.32mn, respectively.
On October 31, Mumbai High Court dismissed a petition filed by LCOs to delay the Phase 1 deadline. The Madras High Court has granted interim relief to analog subscribers in Chennai by extending the deadline to November 5.
Wednesday, September 26, 2012
Digitization to drive ARPU and profitability
Dish TV observes that while the government is supportive of the digitization of TV industry, the pace of execution is slow. There has been a strong push toward digitization with advertisements from the government, broadcasters, DTH operators and MSOs. However, local cable operators who risk losing revenue have not been aggressive deploying set top boxes. Dish TV continues to gain subscribers of voluntary basis and believes the benefit of digitization is yet to kick in. The company believes the government will not black out cable-TV from 1 November as it may lead to viewer backlash but that it will keep pushing for digitization.
According to Dish TV, more than 70% of its subscriber base is in rural markets, where there is little or no analog cable infrastructure. The quality of cable in these markets is poor and it will require significant investment for digital cable operators to compete in these markets. The company said it is tough to operate in rural markets and sees little risk of an increase in competition and churn to cable.
Dish TV operates on a prepaid model. So, if the customer does not have the required balance, service is deactivated temporarily and the company loses revenue for the period. Dish TV believes that while the customer is willing to pay, there are delays in recharging the balance. The company expects these delays to reduce if mobile payments become popular, which could also help to improve ARPU.
According to Dish TV, more than 70% of its subscriber base is in rural markets, where there is little or no analog cable infrastructure. The quality of cable in these markets is poor and it will require significant investment for digital cable operators to compete in these markets. The company said it is tough to operate in rural markets and sees little risk of an increase in competition and churn to cable.
Dish TV operates on a prepaid model. So, if the customer does not have the required balance, service is deactivated temporarily and the company loses revenue for the period. Dish TV believes that while the customer is willing to pay, there are delays in recharging the balance. The company expects these delays to reduce if mobile payments become popular, which could also help to improve ARPU.
Sunday, September 16, 2012
FDI limit increased to 74% in DTH and Digital cable
The increase in FDI limit is positive for the MSOs and DTH players such as Hathway, Den Networks, WWIL, Hinduja Ventures and Dish TV. The timing is very appropriate - because of the ongoing mandatory digitisation drive, all cable (and DTH) companies will need to invest huge sums of money and FDI could be a possible route now. While the existing 49% limit itself was not fully utilized by any of the companies, the new rules will allow foreign entities to take majority shareholding in the cable/DTH companies and thus evince interest from large strategic investors.
Phase II to be more exciting than Phase I: India’s MSOs are small in size and scale (compared to their global peers) and the industry is too complex (with just ~20% declaration and profitability pegged to carriage revenues). We feel that strategic investors would wait to see some execution of mandatory digitisation before betting on the Indian cable sector. Thus, Phase I (the four Metros) might not see many large investments by foreign entities. Phase 2 (38 Indian towns with population greater than 1 mn) would require large investments and teething problems of Phase 1 Digitisation would have been addressed. Hence, we believe that Phase II could see exciting participation from foreign entities.
We believe that the best candidates for foreign equity infusion could be Den Networks and Incable (listed via Hinduja Ventures) on the cable side and Tata Sky and Videocon D2H in the DTH segment. Hathway Cable already has a foreign strategic investor (Providence) who would not shy from increasing its stake (if the promoters are willing to dilute theirs) to fund Phase II digitisation.
Will this unleash a wave of Consolidation? We believe that this would trigger a wave of consolidation amongst the smaller MSOs (subscriber size less than 1 mn); as any strategic investor would want to invest in a business that provides scale. We believe that the cable sector would now also attract a lot of interest from Private Equity players. Consolidation amongst the large 5 MSOs would probably be difficult; however, they would buyout/merge smaller MSOs once flushed with funds.
Phase II to be more exciting than Phase I: India’s MSOs are small in size and scale (compared to their global peers) and the industry is too complex (with just ~20% declaration and profitability pegged to carriage revenues). We feel that strategic investors would wait to see some execution of mandatory digitisation before betting on the Indian cable sector. Thus, Phase I (the four Metros) might not see many large investments by foreign entities. Phase 2 (38 Indian towns with population greater than 1 mn) would require large investments and teething problems of Phase 1 Digitisation would have been addressed. Hence, we believe that Phase II could see exciting participation from foreign entities.
We believe that the best candidates for foreign equity infusion could be Den Networks and Incable (listed via Hinduja Ventures) on the cable side and Tata Sky and Videocon D2H in the DTH segment. Hathway Cable already has a foreign strategic investor (Providence) who would not shy from increasing its stake (if the promoters are willing to dilute theirs) to fund Phase II digitisation.
Will this unleash a wave of Consolidation? We believe that this would trigger a wave of consolidation amongst the smaller MSOs (subscriber size less than 1 mn); as any strategic investor would want to invest in a business that provides scale. We believe that the cable sector would now also attract a lot of interest from Private Equity players. Consolidation amongst the large 5 MSOs would probably be difficult; however, they would buyout/merge smaller MSOs once flushed with funds.
Tuesday, August 28, 2012
TRAI tweaks advertising norms
TRAI, in its latest amendment to the proposed regulations on duration of ads on TV channels, has relaxed a few rules while it has made some adverse changes as well. In a reprieve to broadcasters, particularly movie channels, the regulator has deleted the prior regulation which mandated a minimum gap of 15 minutes between two ad sessions (earlier mandate of 30 minutes gap for movie channels). However, compared to the earlier draft, TRAI has hardened its stance on sports broadcasters in particular by stipulating that they stick to the 12 minutes cap as well.
All broadcasters will have to submit details of ads carried to TRAI on a quarterly basis from January 2013. Comments from stakeholders on amended regulations will be accepted till September 11. Though we believe that eventually these regulations will be exercised in some form, their timing is ambiguous.
All broadcasters will have to submit details of ads carried to TRAI on a quarterly basis from January 2013. Comments from stakeholders on amended regulations will be accepted till September 11. Though we believe that eventually these regulations will be exercised in some form, their timing is ambiguous.
Thursday, August 16, 2012
TRAI gets Cracking on digitisation
TRAI extended the deadline for signing inter-connect agreements between MSOs and broadcasters from July 31 to August 21. Most MSOs and broadcasters had missed the earlier agreement deadline, which determines the price at which content will be shared by broadcasters with MSOs. Since the regulator has permitted carriage fees to be charged by MSOs from broadcasters, alongwith subscription deals, carriage fee deals also need to be negotiated. Hence, inking of inter-connect agreements has been delayed. In a recent meeting with stakeholders, TRAI expressed its displeasure and reiterated that the digitisation bill has been passed by the Parliament and has to be confirmed to.
TRAI has adopted a strict stance and warned that if the August 21 deadline is not met, the regulator will intervene and set a statutory price itself. TRAI has agreed to ensure that a panel and other penalty clauses are in place in case of any defaulters. In another positive development, which indicates the seriousness of broadcasters, the Indian Broadcasting Federation (IBF) has also advised its members to stick to the revised August 21 deadline.
TRAI has adopted a strict stance and warned that if the August 21 deadline is not met, the regulator will intervene and set a statutory price itself. TRAI has agreed to ensure that a panel and other penalty clauses are in place in case of any defaulters. In another positive development, which indicates the seriousness of broadcasters, the Indian Broadcasting Federation (IBF) has also advised its members to stick to the revised August 21 deadline.
Wednesday, June 20, 2012
Cable & Satellite Industry - Digitization sunset date for Phase I
As the digitisation deadline of June 30, 2012 for Phase I approaches, differences exist among the various parties involved in extending or persisting with the same deadline.
Broadcasters have been lobbying the government to stick to the existing deadline, some of the MSOs (barring the large ones like Hathway Cable and Den Networks) and LCOs have asked for an extension of two or three months as they are finding it hard to seed set top boxes in all their households due to late announcement of the revenue share model by Trai, unavailability of set top boxes and lack of consumer awareness.
MSO's problems could be a blessing for DTH operators who are gearing up to speed up their subscriber addition. However, Hathway is best placed among MSOs, having already seeded 40% or ~1 million of its ~2.3 million subscribers in the metros and having an inventory of ~ 0.7 million STBs.
Expect at least a three month delay in implementation of digitisation even if the deadline is not extended. The final call will be taken by the ministry of Information & Broadcasting on June 25, 2012.
Broadcasters have been lobbying the government to stick to the existing deadline, some of the MSOs (barring the large ones like Hathway Cable and Den Networks) and LCOs have asked for an extension of two or three months as they are finding it hard to seed set top boxes in all their households due to late announcement of the revenue share model by Trai, unavailability of set top boxes and lack of consumer awareness.
MSO's problems could be a blessing for DTH operators who are gearing up to speed up their subscriber addition. However, Hathway is best placed among MSOs, having already seeded 40% or ~1 million of its ~2.3 million subscribers in the metros and having an inventory of ~ 0.7 million STBs.
Expect at least a three month delay in implementation of digitisation even if the deadline is not extended. The final call will be taken by the ministry of Information & Broadcasting on June 25, 2012.
Friday, June 15, 2012
Hathway Cable - Leader of Digital Revolution
Hathway Cable & Datacom (Hathway) is well equipped for the impending June 30 deadline for Phase 1 of digitisation. As per Ministry of Information & Broadcasting (MIB) data, only ~24% (2.9mn) set top boxes have been seeded, out of the total 12.3mn required. Out of these, Hathway alone has seeded 0.9mn boxes (40% penetration of its universe) and is the best prepared MSO. Even though the government, as of now, remains firm on meeting the Phase 1 deadline, we expect a ~3-6 months’ delay.
Hathway Vs WWIL
Hathway leads MSOs considerably in terms of preparedness for Phase 1. Its digital penetration stands at 29% in Delhi, 58% in Mumbai and 28% in Kolkata. DEN’s total digital penetration stands at 21.5% of its universe with 26% in Delhi, 22% in Mumbai and 7.5% in Kolkata. WWIL has achieved total digital penetration of 17% with 11.7% in Delhi, 9.6% in Mumbai and 23% in Kolkata. IMCL has achieved total digital penetration of 26%, with 10% in Delhi and 37% in Mumbai.
The operator will now showcase 20 HD channels at an attractive annual price of INR6,666, including the price of set top box. Initially, the 20 will be available in Mumbai, Pune, Delhi, Hyderabad and Bengaluru only.
Hathway Vs WWIL
Hathway leads MSOs considerably in terms of preparedness for Phase 1. Its digital penetration stands at 29% in Delhi, 58% in Mumbai and 28% in Kolkata. DEN’s total digital penetration stands at 21.5% of its universe with 26% in Delhi, 22% in Mumbai and 7.5% in Kolkata. WWIL has achieved total digital penetration of 17% with 11.7% in Delhi, 9.6% in Mumbai and 23% in Kolkata. IMCL has achieved total digital penetration of 26%, with 10% in Delhi and 37% in Mumbai.
The operator will now showcase 20 HD channels at an attractive annual price of INR6,666, including the price of set top box. Initially, the 20 will be available in Mumbai, Pune, Delhi, Hyderabad and Bengaluru only.
Wednesday, May 16, 2012
TRAI regulations on Ads can be a significant drag on earnings
TRAI regulations will lead to reduction in ad inventory across genres thus impacting the ad volumes. Current primetime ad inventory for leading GEC channels could be ~14min/hr vs 12min/hr (to be regulated on clock-hour basis as per TRAI order)
Ad revenues from movies to be impacted significantly. Economics of the movie genre would be impacted because of 30 min ad-free regulation (significant reduction in ad inventory) Companies believe that it is unfair to put such stringent regulations on advertising time in the current scenario when even first phase of digitization in not through and advertisement remains the primary revenue stream.
Sports genre will be impacted due to ban on part-screen/drop-down advertising and limited ad breaks but the genre gets sold differently so taking price hike could be easier. While the broadcasters will try to offset this by yield improvements, we believe this will be a tough ask in the current weak ad environment.
While prime time GEC inventory might be impacted by 10-20%, the impact would be much higher in other genres like news, movies, and sports. We believe it will be difficult for the broadcasters to fully offset the volume impact through price hikes given current weak advertising environment.
Ad revenues from movies to be impacted significantly. Economics of the movie genre would be impacted because of 30 min ad-free regulation (significant reduction in ad inventory) Companies believe that it is unfair to put such stringent regulations on advertising time in the current scenario when even first phase of digitization in not through and advertisement remains the primary revenue stream.
Sports genre will be impacted due to ban on part-screen/drop-down advertising and limited ad breaks but the genre gets sold differently so taking price hike could be easier. While the broadcasters will try to offset this by yield improvements, we believe this will be a tough ask in the current weak ad environment.
While prime time GEC inventory might be impacted by 10-20%, the impact would be much higher in other genres like news, movies, and sports. We believe it will be difficult for the broadcasters to fully offset the volume impact through price hikes given current weak advertising environment.
Thursday, May 03, 2012
DISH TV Strategy for Customer Acquisition
DTH players may have to increase spends on dealer commission and advertisements in attempt to churn customers from cable TV. Separately as the gap between cable and DTH narrows (as cable goes digital and picture quality improves), DTH players will have more compulsion to position themselves as a premium service.
All this will result in higher costs as positioning is related to higher ad spends as well. Separately the other way to improve positioning is related to more HD offerings. With no immediate solutions available to increase
transponder capacity, it may not be an easy exercise. However there could be some respite for DTH sector
overall as rise in Cable ARPUs will lower gap between DTH and Cable TV. That said, two way offerings
of cable TV network allows MSO to bundle broadband and TV services together.
In addition, post digitisation cable TV will be able to offer 500+ channels and this may used a good marketing tool by MSOs to retain present customers. While we agree that it is not about providing all channels and it is
more about being present with relevant channels, the mass market may opt for more offerings in our view. In some of the regional pockets, the regional channels have lot of demand and cable operators may be better placed to deal with such consumer behaviour.
All this will result in higher costs as positioning is related to higher ad spends as well. Separately the other way to improve positioning is related to more HD offerings. With no immediate solutions available to increase
transponder capacity, it may not be an easy exercise. However there could be some respite for DTH sector
overall as rise in Cable ARPUs will lower gap between DTH and Cable TV. That said, two way offerings
of cable TV network allows MSO to bundle broadband and TV services together.
In addition, post digitisation cable TV will be able to offer 500+ channels and this may used a good marketing tool by MSOs to retain present customers. While we agree that it is not about providing all channels and it is
more about being present with relevant channels, the mass market may opt for more offerings in our view. In some of the regional pockets, the regional channels have lot of demand and cable operators may be better placed to deal with such consumer behaviour.
Wednesday, May 02, 2012
Analysis on TRAI Policy on Digitization of TV
TRAI rules will govern the implementation of Digital Addressable System (DAS) in the four metros of Delhi, Mumbai, Kolkata and Chennai, to be effective from June 30 2012. The key highlights are (a) Basic Service Tier to have 100 channel at INR100 per month; (b) legitimises carriage fees but in a regulated manner; (c) MSOs to ensure capacity to carry 500 channels by the end of this year, this could drive consolidation in our view; (d) revenue share for MSOs fixed at 65% in case of pay channels and 55% in case of FTA channels (positive respite).
Clarification on revenue sharing by TRAI is a positive to DAS implementation and should accelerate the process, assuming broadcasters share in lines of DTH sector at c35%, MSOs blended revenue share is estimated to be c35% and LCO share at 30% in our view.
TRAI has brought carriage fees under regulation and suggested that it cannot be increased for a period of two years. This transparency might be negative for MSOs in our view. However, as DAS implementation
starts with metros which have a fair weight-age in programme ratings, the decline in carriage fees may not be immediate. However, some set off for MSOs may come from broadcasters trying to be part of the Basic Tier pack which will have only 82 channels for private broadcasters. However, TRAI has suggested 5 channels from each genre to be included in Basic Tier, this in our view dilutes the upsides for MSOs
Clarification on revenue sharing by TRAI is a positive to DAS implementation and should accelerate the process, assuming broadcasters share in lines of DTH sector at c35%, MSOs blended revenue share is estimated to be c35% and LCO share at 30% in our view.
TRAI has brought carriage fees under regulation and suggested that it cannot be increased for a period of two years. This transparency might be negative for MSOs in our view. However, as DAS implementation
starts with metros which have a fair weight-age in programme ratings, the decline in carriage fees may not be immediate. However, some set off for MSOs may come from broadcasters trying to be part of the Basic Tier pack which will have only 82 channels for private broadcasters. However, TRAI has suggested 5 channels from each genre to be included in Basic Tier, this in our view dilutes the upsides for MSOs
Friday, February 24, 2012
Digital subscribers to increase 3x in 3-4 years
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.
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.
Thursday, February 23, 2012
Status of digitization of Cable TV Networks in India
According to the ordinance, the deadline for digitization in the four metros (~50m population) is June 2012, followed by all cities with 1m population by March 2013, all urban areas by September 2014, and pan India by December 2014. Thus, over the next three years each of the ~89m households will have to be digitized.
The sense we are getting from the industry is that there are execution difficulties and the time line could get extended by 1-2 years, but the digitization process will certainly expedite matters. We have observed that MSOs (Hathway, Den etc) have already started advertising about the mandatory digitization ordinance to their subscribers and are educating them that they need to buy set-top boxes. Also, there is a consultation process being carried out by the sector regulator to address the issues related to digitizing cable, including the pricing of tier and distribution of subscription revenue. Thus we are seeing the digitization process being accelerated.
The sense we are getting from the industry is that there are execution difficulties and the time line could get extended by 1-2 years, but the digitization process will certainly expedite matters. We have observed that MSOs (Hathway, Den etc) have already started advertising about the mandatory digitization ordinance to their subscribers and are educating them that they need to buy set-top boxes. Also, there is a consultation process being carried out by the sector regulator to address the issues related to digitizing cable, including the pricing of tier and distribution of subscription revenue. Thus we are seeing the digitization process being accelerated.
Wednesday, February 22, 2012
4G No Threat to Hathway's Cable TV Business
Hathway Cable and Datacom CEO, K Jayramn said,
No, I think as far as 4G is concerned that is going to be on the broadband side, where you need the wireless CP and the wireless modems. I still think large majority of people will continue to watch television in the current way which is linear television.
And there are many people who have a PC at home who would continue to avail the broadband services. So, I don't think that 4G will at any stage compete with linear television given the universe and the distribution of TV sets and others and things. So 4G is really going to be expensive as far as the consumer is concerned.
No, I think as far as 4G is concerned that is going to be on the broadband side, where you need the wireless CP and the wireless modems. I still think large majority of people will continue to watch television in the current way which is linear television.
And there are many people who have a PC at home who would continue to avail the broadband services. So, I don't think that 4G will at any stage compete with linear television given the universe and the distribution of TV sets and others and things. So 4G is really going to be expensive as far as the consumer is concerned.
Advertising on DTH + TV Outlook for 2012
The Indian Advertising Industry dominated by TV and Print has witnessed good growth and a whole new telecom has been the biggest contributor to the increase in advertisement spend over the past decade, increasing its share of the pie from 0% to 10%. Over the next decade we heard that rather than a sector, it will be sub sectors that could drive growth. Some of the sub sectors increasing the spends are alcoholic
beverages, foreign auto companies, beauty products etc.
Television is the most effective medium for the large established consumer, auto, telecom players. However for segmented launches or new products the corporates prefer print media, eg a telecom company launching in a new circle, or an auto company coming out with a new product. In these cases television would not be the
optimal use of advertisement spend.
Several of our industry contacts mentioned IPL as a key property to watch out for to get indications of the advertisement spends going forward. IPL is an important property in India as cricket provides the advertisers a pan India reach which none of the other genres can provide, eg the Hindi or regional general entertainment channels (GECs)
Here is the brief summary of the Data and Outlook,
Cautious optimism on the advertisement outlook for 2012. Expect advertisement industry revenue growth of 8-9%. This compares to 15% CAGR over 2003-11. Television continues to be the dominant platform with a share of 44.8% followed closely by print at 42.2%.
beverages, foreign auto companies, beauty products etc.
Television is the most effective medium for the large established consumer, auto, telecom players. However for segmented launches or new products the corporates prefer print media, eg a telecom company launching in a new circle, or an auto company coming out with a new product. In these cases television would not be the
optimal use of advertisement spend.
Several of our industry contacts mentioned IPL as a key property to watch out for to get indications of the advertisement spends going forward. IPL is an important property in India as cricket provides the advertisers a pan India reach which none of the other genres can provide, eg the Hindi or regional general entertainment channels (GECs)
Here is the brief summary of the Data and Outlook,
Cautious optimism on the advertisement outlook for 2012. Expect advertisement industry revenue growth of 8-9%. This compares to 15% CAGR over 2003-11. Television continues to be the dominant platform with a share of 44.8% followed closely by print at 42.2%.
Tuesday, February 21, 2012
Subscriber Base - Pay TV market in India
There are 3 main types of Pay TV Service Providers in India.
1. Analog cable is still the dominant platform in India with more than 80m subscribers. Analog cable market is fragmented and is covered by ~ 6,000 MSOs who in turn provide feed to 60,000 local cable operators. Analog cable has poor picture quality and limited carriage capacity. Dominates with more than 80m subscribers but losing turf to digital platform.
2. Direct-to-home (DTH) or satellite TV services are provided by six DTH operators. DTH industry has already added 41m subscribers DTH provides more number of channels and better picture quality compared to analog cable along with other interactive services. Dish, Tata Sky, Sun Direct, Big TV, Airtel, Videocon, Reliance BIG TV, DD Direct are the major players
3. Local cable operators (LCOs) are migrating to digital cable, which requires a digital head-end at the operator’s end and a set top box at the customer’s premise to decode the signal. This service is being provided by LCOs in some parts of India to counter loss of subscribers to DTH. However mandatory digitization ordinance will provide boost to digital cable. They have 5-6 mn customers. WWIL, Hathway, In-cable,
DEN, Digicable are the major players.
1. Analog cable is still the dominant platform in India with more than 80m subscribers. Analog cable market is fragmented and is covered by ~ 6,000 MSOs who in turn provide feed to 60,000 local cable operators. Analog cable has poor picture quality and limited carriage capacity. Dominates with more than 80m subscribers but losing turf to digital platform.
2. Direct-to-home (DTH) or satellite TV services are provided by six DTH operators. DTH industry has already added 41m subscribers DTH provides more number of channels and better picture quality compared to analog cable along with other interactive services. Dish, Tata Sky, Sun Direct, Big TV, Airtel, Videocon, Reliance BIG TV, DD Direct are the major players
3. Local cable operators (LCOs) are migrating to digital cable, which requires a digital head-end at the operator’s end and a set top box at the customer’s premise to decode the signal. This service is being provided by LCOs in some parts of India to counter loss of subscribers to DTH. However mandatory digitization ordinance will provide boost to digital cable. They have 5-6 mn customers. WWIL, Hathway, In-cable,
DEN, Digicable are the major players.
Digitization - Key driver for industry over the next few years
There are 147m television homes of which 127m are pay TV homes of which 46m homes are digital (41m satellite TV + 5m digital cable). In December 2011 the Indian government approved the mandatory digitization ordinance and has decided on December 2014 as the sunset date for analog cable. Over the next three years all of the ~89m analog homes have to convert to digital platform (satellite TV or digital cable).
While we do not believe the time line is achievable, this provides a strong thrust towards digitization which is positive for most stake holders including broadcasters, distributors (DTH, MSO), government and consumer. Local cable operators’ revenue would be under risk.
While we do not believe the time line is achievable, this provides a strong thrust towards digitization which is positive for most stake holders including broadcasters, distributors (DTH, MSO), government and consumer. Local cable operators’ revenue would be under risk.
Wednesday, February 15, 2012
Hathway Cable - Digital Dreams Coming True
Hathway Cable and Datacom has already seeded ~27% (~40% including CAS areas) boxes in proposed DAS areas of Mumbai and ~18% in Delhi. With a target of 0.4mn boxes in Kolkata through its JV with GTPL, the company plans to seed ~2.2mn set top boxes in Phase 1. Hathway added ~0.17mn digital subscribers in Q3FY12 and now its digital subscriber base stands at ~1.9mn.
Phase 1 target: Hathway targets to add 2.2mn digital subscribers in Phase 1. Its standalone entity will order ~1.8mn boxes while subsidiaries will order 0.4mn boxes
Subscriber universe: Hathway's subscriber universe is ~8.9mn. DEN and WWIL have a subscriber universes of ~11mn and ~8mn respectively.
STBs: Hathway has ordered 1.8mn STBs; letter of credits have been opened for 1.3mn boxes, while 0.5mn boxes are in inventory.
Metros: Hathway has already seeded ~27% (~40% including CAS areas) boxes in proposed DAS areas of Mumbai and ~18% in Delhi. The number of boxes seeded stands at ~0.35mn till now in non‐CAS areas.
HD: 3200‐3500 subscribers till now. Hathway is offering HD mainly as a combo with broadband. The company hopes to provide 15‐16 HD channels. 3000‐5000 HD subscribers per month will be added in the most optimistic scenario.
Channels: 109 analog channels as of now. Post‐digitization, there is potential to telecast 300‐400 channels.
Phase 1 target: Hathway targets to add 2.2mn digital subscribers in Phase 1. Its standalone entity will order ~1.8mn boxes while subsidiaries will order 0.4mn boxes
Subscriber universe: Hathway's subscriber universe is ~8.9mn. DEN and WWIL have a subscriber universes of ~11mn and ~8mn respectively.
STBs: Hathway has ordered 1.8mn STBs; letter of credits have been opened for 1.3mn boxes, while 0.5mn boxes are in inventory.
Metros: Hathway has already seeded ~27% (~40% including CAS areas) boxes in proposed DAS areas of Mumbai and ~18% in Delhi. The number of boxes seeded stands at ~0.35mn till now in non‐CAS areas.
HD: 3200‐3500 subscribers till now. Hathway is offering HD mainly as a combo with broadband. The company hopes to provide 15‐16 HD channels. 3000‐5000 HD subscribers per month will be added in the most optimistic scenario.
Channels: 109 analog channels as of now. Post‐digitization, there is potential to telecast 300‐400 channels.
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