After rolling out prepaid billing and packing for its primary subscribers, Hathway has now launched packaging for its secondary subscribers under “Hathway connect”. The company has launched 2 commercial packs (INR330 – all channels except English bouquet and INR425 for all channels). Currently, it is at pilot phase and only launched in Bangalore. The company awaits feedback on the packs, post which it will roll out the packs in entire Phase I and II markets. As compared to Den Networks, Hathway has higher primary subscriber base, well entrenched broadband operations and has seeded the highest number of boxes amongst MSOs.
Hathway is the best placed MSO to capitalise on the digitisation opportunity. Currently, the company’s digital subscriber base stands at 9.6mn. Also, we like the company’s strategy of increasing investment in the high-margin broadband business, which has started to yield returns.
Tuesday, March 15, 2016
Sunday, March 06, 2016
DTH Business Report healthy Numbers - Airtel / Videocon
Both Videocon DTH and Airtel DTH reported healthy quarterly numbers over the last couple of days. We look at the metrics and some read-through for Indian cable/satellite space, including Dish.
VDTH added 0.43m subs in the December quarter, increasing net subs by ~15% yoy. The comparable number for Airtel DTH was 0.53m subs, increasing net subs by ~13% yoy. While both VDTH and Airtel
DTH also benefited by sequentially lower churn, underlying momentum in the market remains strong - we expect Dish to add 0.40m subscribers in the quarter.
The trend on ARPUs remains healthy (VDTH: ~8% yoy, Airtel DTH: ~7% yoy) - this is a result of price
hikes taken in the recent past, HD adoption (trends do vary from quarter to quarter though) and increasing value added services. For Dish TV, we model in ~5% increase in ARPUs for FY16 yoy.
With attractive content deals and operating leverage continuing to play, the sector continues to deliver good EBITDA margin expansion. Both VDTH (~390 bps yoy) and Airtel DTH (~600 bps yoy) reported healthy margin expansion resulting in EBITDA growing ~42%/45% yoy respectively.
VDTH added 0.43m subs in the December quarter, increasing net subs by ~15% yoy. The comparable number for Airtel DTH was 0.53m subs, increasing net subs by ~13% yoy. While both VDTH and Airtel
DTH also benefited by sequentially lower churn, underlying momentum in the market remains strong - we expect Dish to add 0.40m subscribers in the quarter.
The trend on ARPUs remains healthy (VDTH: ~8% yoy, Airtel DTH: ~7% yoy) - this is a result of price
hikes taken in the recent past, HD adoption (trends do vary from quarter to quarter though) and increasing value added services. For Dish TV, we model in ~5% increase in ARPUs for FY16 yoy.
With attractive content deals and operating leverage continuing to play, the sector continues to deliver good EBITDA margin expansion. Both VDTH (~390 bps yoy) and Airtel DTH (~600 bps yoy) reported healthy margin expansion resulting in EBITDA growing ~42%/45% yoy respectively.
Tuesday, February 23, 2016
Sun TV Vs Regional Channels Ratings
A quick update on ratings of Sun TV Vs other Regional Channels
Tamil. Sun TV’s ratings have come off by about 10% over the past 3 weeks and it is at about 4.5-5X that of Star Vijay as against 5.5-6X earlier. That said, on an average, Sun TV's ratings are ~5X that of Star’s Vijay TV under BARC as against 3X TAM. The Movie channel KTV's ratings have also improved under BARC.
Telugu. Gemini TV has been pushed to a distant #4 position under BARC from #2 under TAM. Further, the quality of ratings is weaker, both in terms of urban/rural mix and composition (movies/non-movies). Gemini TV’s viewership share in the top four Telugu GECs has come down to 19% in the past two weeks as against an average of 21.4% since mid Oct 2015.
Kannada. Udaya TV has been pushed to #2-4 position under BARC from strong #1 under TAM. Colors Kannada is a clear #1 in a 4-player Kannada general entertainment genre. Further, the quality of ratings is weak both in terms of urban/rural mix and composition (movies/non-movies). Udaya TV’s viewership share in the top four Kannada GECs has come down to 17% in the past two weeks as against an average of 20% since mid Oct 2015.
Malayalam. Surya TV's position has dropped to #4 position in the four-player Malayalam GEC market dominated by Asianet. Flowers TV, a new GEC launched in 2015 has consistently surpassed Surya TV to settle at #3 spot. Surya TV’s share is down to single digits in the top four Malayalam GECs.
Tamil. Sun TV’s ratings have come off by about 10% over the past 3 weeks and it is at about 4.5-5X that of Star Vijay as against 5.5-6X earlier. That said, on an average, Sun TV's ratings are ~5X that of Star’s Vijay TV under BARC as against 3X TAM. The Movie channel KTV's ratings have also improved under BARC.
Telugu. Gemini TV has been pushed to a distant #4 position under BARC from #2 under TAM. Further, the quality of ratings is weaker, both in terms of urban/rural mix and composition (movies/non-movies). Gemini TV’s viewership share in the top four Telugu GECs has come down to 19% in the past two weeks as against an average of 21.4% since mid Oct 2015.
Kannada. Udaya TV has been pushed to #2-4 position under BARC from strong #1 under TAM. Colors Kannada is a clear #1 in a 4-player Kannada general entertainment genre. Further, the quality of ratings is weak both in terms of urban/rural mix and composition (movies/non-movies). Udaya TV’s viewership share in the top four Kannada GECs has come down to 17% in the past two weeks as against an average of 20% since mid Oct 2015.
Malayalam. Surya TV's position has dropped to #4 position in the four-player Malayalam GEC market dominated by Asianet. Flowers TV, a new GEC launched in 2015 has consistently surpassed Surya TV to settle at #3 spot. Surya TV’s share is down to single digits in the top four Malayalam GECs.
Monday, February 22, 2016
Sun TV Network & OTT Play
Sun owns perpetual rights for Television, digital and others platforms (in-flight entertainment) for most of its content. It has signed content deals with a few OTT players which include YuppTV and HOOQ among others. The management indicated that it usually enters into a minimum guarantee fixed fee contract
for six to12 months following which it moves to per subscriber basis. The management indicated that talks are underway for content contracts with Reliance Jio
Sun management indicated that negotiations with media agencies and advertisers are underway and ad revenue gains pertaining to improved viewership share under BARC will start from 1QFY17. We believe a part of the upside from potential increase in yields in Tamil Nadu will be offset by weak ratings in other markets.
Sun management indicated that it has signed content contracts with a few MSOs in phase III markets of Karnataka and Kerala. The benefits will start from March 2016 quarter even though modest. That said, the pace of digitization in phase III is slow, given temporary court stays in most states.
for six to12 months following which it moves to per subscriber basis. The management indicated that talks are underway for content contracts with Reliance Jio
Sun management indicated that negotiations with media agencies and advertisers are underway and ad revenue gains pertaining to improved viewership share under BARC will start from 1QFY17. We believe a part of the upside from potential increase in yields in Tamil Nadu will be offset by weak ratings in other markets.
Sun management indicated that it has signed content contracts with a few MSOs in phase III markets of Karnataka and Kerala. The benefits will start from March 2016 quarter even though modest. That said, the pace of digitization in phase III is slow, given temporary court stays in most states.
Wednesday, January 13, 2016
Digitization in Phase 3 will be slow and gradual
Recent stay orders by four state high courts have postponed digitisation by couple of months, however we believe the impact will be broad based in slowing the overall process and completion may take c6 months. As per the broadcasting ministry Phase 3 digitization is estimated to cover c38m TV households across 630 districts and 7709 urban centres. After Phase 3 we estimate total digitized households to increase to c35% to c90 m TV households. Delay is particularly negative for Direct to Home (DTH) players (including Dish TV) as it limits their ability to benefit from subscriber growth. Delay allows smaller cable operators to get in more time to retain existing subscribers.
Broadcasters to benefit most from Phase 3 as sector subscription revenues rise by c45% to USD3; however monetization will be gradual over 9-12 months. Theoretically entire subscription revenues should be flowing to EBITDA, however due to rising competitive intensity and the need to invest in Over the Top (OTT) offerings, we see subscription EBITDA at no more than c60%. With expansion in mobile data users by 2x to
250m over the next 12 months, entry of global giants like Netflix in the OTT space, OTT investments by traditional broadcasters should see an increase
Broadcasters to benefit most from Phase 3 as sector subscription revenues rise by c45% to USD3; however monetization will be gradual over 9-12 months. Theoretically entire subscription revenues should be flowing to EBITDA, however due to rising competitive intensity and the need to invest in Over the Top (OTT) offerings, we see subscription EBITDA at no more than c60%. With expansion in mobile data users by 2x to
250m over the next 12 months, entry of global giants like Netflix in the OTT space, OTT investments by traditional broadcasters should see an increase
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