DTH market in India to cross $5bn by 2020
The Direct-To-Home (DTH) market in India is anticipated to grow over three times to cross $5 billion by 2020, according to a new report by research firm Media Partners Asia. The strong growth in revenue is attributed to the mandatory cable TV digitization would help the DTH players expand their subscriber base considerably, said the study.
Hong Kong based Media Partner Asia that focuses on industries such as media, communications and entertainment further observed that the active DTH subscriber base is estimated to grow from 32.4 million in 2012 to 63.8 million by 2017 and 76.6 million by 2020. It also said that the DTH industry revenues will reach $3.9 billion by 2017 and $5.3 billion by 2020.
The Indian DTH industry is estimated to have clocked a revenue of about $1.5 billion in 2012. The study noted that the Indian DTH market will continue to face several cost challenges moving forward.
According to the study, with conflicting growth forecasts between content aggregators and DTH operators over the active subscriber base, most content renewals will be based on a cost per subscriber (CPS) basis, rather than on a fixed rate. This will reduce the benefits from operating leverage that the industry previously enjoyed. Marketing and staff expenses will remain high as the larger phases of DAS (digitization of cable signals) roll-out gets underway.
The report noted that India’s DTH players made a collective effort in 2012 to improve the per-subscriber economics of the industry by launching a number of DTH packages and entry-level pricing. According to MPA, although operators have taken steps to keep churn levels under check by reducing trade margins and the free viewing period for new subscribers, gross subscriber additions remained relatively weak and growth in the active subscriber base has remained sluggish. The active subscriber additions in 2012 stood at a mere 3.7 million stated MPA noting that the gap between gross and active subscriber bases has widened substantially.
As per the report, Dish TV continued to lead with a market share of 27 per cent in terms of gross additions, while Videocon Direct to Home led in terms of incremental value in last year. Tata Sky and Airtel Digital TV have 19 per cent and 18 per cent market share, respectively. These four players together accounted for 88 per cent of total gross additions in 2012. The study noted that the cumulative DTH active subscriber base stood at 32.4 million subscribers versus 28.7 million subscribers in 2011.
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