DTH Faces Slowdown

After the scorching pace of last three years, the six-horse race of India’s direct-to-home television business has finally run out of steam. Among 45 million gross subscribers in 2011 shared between Airtel Digital, Tata Sky, Dish TV, Sun Direct, Videocon D2H and Big TV, an embarrasingly high 15 million subscribers are inactive. Inactive subscribers are those who have DTH connections but have not renewed their subscriptions. What makes the numbers worse is a 50% jump in inactive DTH consumers over 2010 when their numbers stood at 10 million on a gross base of 33 million. Also, in terms of gross subscriber additions, 2011 saw only 36% growth over previous year whereas in 2010, the industry had recorded a 50% growth in gross additions over 2009 figures, indicating a slowdown. 

The latest figures are part of an analysis by Media Partners Asia (MPA), a leading independent international media research agency. “The net additions (paying subscribers) in 2011 were around 8-9 million, taking overall net subscriber numbers to 29-30 million on a gross base of 44-45 million,” said Vivek Couto, executive director, MPA. 

The last three months of 2011 marked a fresh peak and trough for the DTH pay-TV market in terms of gross subscriber additions. “While the industry added 1.6 million new subscribers in October, a mere 0.61 million were added in December,” the report said. 

The MPA report names Dish TV the market leader with a 28.2% share. “Late entrant Videocon D2H has seen robust additions surpassing Big TV,” Couto added. According to the MPA analysis, Tata Sky and Airtel Digital TV have managed to corner 19% and 16%, respectively, while Reliance Big TV and Sun Direct have seen limited growth due to funding, churn and legacy satellite issues. 

The good news is the doubling of gross DTH subscriber base in three years (2009-2011) a target which was expected to met only by 2014. However, industry losses are expected to have crossed R6,000 crore on revenues of close to R4,000 crore. 

MPA predicts the quality of subscriber additions is expected to improve significantly with higher revenues per user, translating into improved churn and better yields. This is because of the impending digitisation regime under which cable television consumers in four metros will require a digital addressable set-top box from July. “While organised cable firms must import and seed their digital cable boxes as per demand and willingness of consumers, DTH is a ready and proven system with a 45-million subscriber base. Also, DTH players are offering high-definition boxes and other value-added services which will be a challenge for the vanilla digital cable boxes at the beginning,” said a senior analyst tracking media.