Since the central government launched a series of television reforms in 1991 under Prime Minister Narasimha Rao, the Pay TV industry has seen many ups and downs but still managed to maintain a firm foothold in millions of Indian homes. The industry comprises of Cable, Direct Broadcast Satellite, and IPTV ((internet protocol television) & as the name suggests, requires the audience to pay for channels they choose to view.
According to a recent study, almost 86 million Indian households have access to cable TV while direct to home (DTH) is also gaining momentum in key markets. However, data released by Media Partners Asia (MPA) points out that analog cable currently dominates India’s pay-TV market with a cool 70% market share. Of course, digital cable deployment is also expected to pick up speedy gains after the ordinance for compulsory digitization of Cable TV networks in India was approved by the President on October 25, 2011 & as financing is reinforced and the cost for technology dips.
Evolution, Improvements & Challenges
Following the liberalization of the broadcasting industry, many new players emerged in India after the launch of Zee TV, Asia Television Network (ATN) & theHong Kong-based Star TV Network’s bouquet of channels. By 2001, international channels such as HBO and History Channel were started followed by Nickelodeon, Cartoon Network, VH1, Disney and Toon Disney. Thanks to its large audience and comparatively liberal foreign ownership and content laws, India has been a standout market for pay-TV channels and distributors. No wonder then that it is one of the world’s largest markets easily generating about a $5.89bn in revenues every year and large foreign investors have done everything to capture their piece of the pie.
However, the industry faces its share of challenges as well. For one, the report by MPA states that there are at least 350 channels in India fighting for space on distribution systems that are capable of carrying only about 150 each. Besides the increased competition from direct to home (DTH) satellite TV platforms, the cable industry is facing increased pressure on carriage fees in India especially after the merger of the distribution businesses of Star India and Zee Entertainment Enterprises and the formation of a new company called Media Pro.
Plus, this is also an "unorganized" sector where small operators misreport broadcasters’ about earnings from customers & pocket the difference. Owing largely to this, content owners and network operators are constantly seeking new ways & are ready to embrace new technologies to market their content while checking unlawful access, recording and redistribution. A conditional access system (CAS) that secures content and proffers better TV viewing experience is a key requirement, informs Mr. Carmi Bogot, President, Latens. The company, owned by PACE Group is headquartered in Belfast, UK & offers operators of Cable, DTH, IPTV, DTT and hybrid networks solutions secure Pay TV services across homes from one service delivery platform. Mr. Bogot was formerly the Vice President of NDS, an important conditional access software provider, and has been involved in the distribution of digital TV since the first DTH launch.
Simply put, conditional access system is a way of encrypting digital content transmitted via satellite or Cable as TV channels through a set-top box (STB). Conditional access system also provides the right “entitlements” to view these channels by integrating with a backend subscription management service or SMS.
“India is a cost-sensitive market and we are a technology-driven company that believes in offering the right solutions to operators at the best cost” he says. “This is a growing & a cash-rich industry in India and for operators to secure their share, it is imperative that they adopt the right solutions to ensure the content reaches the right audience and is well protected too” he added.
India’s Digital Party
“The need for digitalization is important as the TV industry is growing” Mr. Bogot opined. But in many cases, the infrastructure that exists currently is not able to provide protected programming, Video on Demand (VOD - lets viewers order particular movies available on their service provider’s library), interactive applications and other innovations. But digital technology can muscle with high quality DTH with equal competent compression technology and local area services.
Companies are continuously coming up with better devices for audiences to access & view content. Thus, new roles are being created for cable operators who bring that content into TV homes. A simple pay TV model with a TV connected to a single set-top box does not meet the growing appetite of the consumer who now desires personalized on-demand content, flexible viewing rights, portability, VOD, interactivity and high-speed broadband access. And content is now being offered to a new range of devices which includes mobile devices and digital video recorders (DVRs -allows a viewer to watch one channel, while simultaneously recording a program running on another channel) and multiple TV sets. According to the information and broadcasting ministry, all urban areas are likely to be digitized by November 30, 2014 and the remaining areas by March 31, 2015. But challenges persist here too: the MPA estimates that the cost of digitising all TV homes stands at $3-3.5 billion.Multi system operators (MSOs)are also demanding ease of import duties on equipment, tax holidays and relaxing price regulation which the Telecom Regulatory Authority of India (TRAI) supports. However, several other impending decisions can only be taken by the ministry of finance.
On a Growth Trajectory
In the near future, viewers are going to be spoilt for choice with so many offerings coming their way to enhance their everyday TV viewing habit. Even the concept of “Pay per view”, which is immensely popular in the west, is picking up here. It is expected to grow at an annual rate of 16 percent to record US$ 11.3 billion worth of revenues by 2012. In the years ahead, the industry will come under a correct licensing mechanism where city, state or national licenses can be bought – TRAI recommendations are a step forward in ensuring this. Additionally, most reports from Informa Telecoms and Media Group and Media Partners Asia state that India is likely to go past Japan, Australia, Hong Kong and South Korea to become the second largest digital cable TV home market in the Asia Pacific region. Achieving this however will mostly depend on factors like having a more liberal FDI policy for cable operators, a dedicated plan for digitization, improved clarity on HITS guidelines and a licensing framework.