New technologies in broadcasting are revolutionizing the viewing experience. Increasingly viewers are becoming empowered to define what entertainment content is delivered to their TV screens at what time. Broadcasting schedules are becoming meaningless by the day.

Personal Video Recorders (PVRs) are making their way into the Indian market. Take Tata Sky’s recently launched Digital Video Recorder (DVR) service – Tata Sky Plus. The DVR allows a viewer to watch one channel, while simultaneously recording a program running on another channel. The DVR also has a host of other features – like recording any program while you’re asleep or at work or even recording the entire series of your favorite show.

So no more waiting up till 2 am to watch that movie you’ve been waiting to see. No more having to miss your favorite show because you get late at work. And best of all, no need to fight over the remote. The DVR even lets you pause, re-wind, forward, and re-play live TV.

According to Mr. Vikram Kaushik, Managing Director and CEO of Tata Sky Ltd “The introduction of PVR technology will revolutionise the TV viewing experience in India. The PVR’s recording and playback features will allow our subscribers to time-shift their TV viewing, and thanks to the pause and rewind features, viewers can be sure that they won’t miss any of their favourite shows any more, and that they can catch all the action in live TV broadcasts.”

While the DVR gives Direct-to-home (DTH) provider TATA Sky a momentary edge over the competition, it isn’t long before they catch up with their own DVRs. In fact, leading multi-system operator in the digital cable segment – Digital Entertainment Network (DEN) Ltd. – planning to introduce a DVR service next year. “On demand is the future,” said Mr. Anuj Gandhi, CEO, DEN.

A whole new level of interactivity is being introduced with digitization of TV networks. While the TATA Sky Plus DVR makes its way into homes across the nation, video-on-demand is a feature that is prevalent across all distribution platforms i.e. DTH, digital cable and Internet Protocol Television (IPTV). Video-on-demand lets viewers order particular movies available on their service provider’s library. The movie can be downloaded for a small fee and then viewed. Video-on-demand as a segment is expected to experience significant growth in India within the next five years. On demand services providing access to games and music are also proving to be a popular feature of distribution platforms.

The concept of ‘Pay-per-view’ is popular in the West and has immense potential in India. The country’s pay-per-view sector is expected to grow at an annual rate of 16 percent to cash in US$ 11.3 billion worth of revenues by 2012. Many TV service providers are focusing on their pay-per-view channels and the bouquets of movies offered in order to attract customers.

With a burgeoning Indian film industry, producing 1000 movies a year, video-on-demand and pay-per-view are turning out to be lucrative business opportunities for distribution networks.

With the revolutionary transformations taking place in the television content distribution market, soon viewers all over India will be able to enjoy the benefits of watching movies and TV shows, surfing the Internet and making telephone calls without leaving the comfort of their sofas and television screens.

The Telecom Regulatory Authority of India (TRAI) recently issued a set of recommendations to the Ministry of Information & Broadcasting mandating every cable network operator to transmit digitized quality video to every home by 2012, thus making possible the delivery of a host of services including Internet access and telephony via Cable TV.

Transition phase: Analog to Digital

Cable TV penetration by the end of 2007, had reached 78 million out of 130 million homes in India. The cable TV sector has experienced phenomenal growth over the last few years and still has massive growth potential.

Currently, cable TV transmission in India is predominantly analog and is limited to providing only TV channels. Analog doesn’t lend itself well to technological upgradation either. With stiff competition from advanced distribution technologies such as direct-to-home (DTH), headend-in-the-sky (HITS), and Internet Protocol TV (IPTV) offering TV channels, broadband and telephone services, the local cable TV operator is going to find it difficult to sustain his business with analog transmission.

The TRAI recommendations include a provision for existing registered cable operators to digitize their transmission over the next five years, and over three years for new entrants.

Digitized networks have the capacity to offer a two-way path allowing broadband and thus, ‘triple-play’, which includes services such as cable telephony, video-on-demand and Internet surfing facilities, thus allowing cable operators the opportunity to compete with the likes of DTH and IPTV.

Major Trends: Competition and Consolidation

Huge investments in technology are required for upgrading to digital transmission and last mile cable operators all over the country are being increasingly compelled to tie up with triple play service providers or Multi-Service Operators (MSOs) to enable digital two-way interactivity.

Five major MSOs have emerged in this segment acquiring a national presence through mergers with and acquisitions of last-mile operators or by turning them into franchisees. These are the Raheja group’s Hathway Cable & Datacom, the Essel Group's Wire & Wireless India (WWIL), the Hinduja Group's IndusInd Media, DEN Digital Entertainment Network (set up by GBN founder Sameer Manchanda and Network18 chief Raghav Bahl) and Digicable Network India (set up by Jagjit Singh Kohli). These five collectively access over 20 million homes i.e. a quarter of the country’s cable TV subscribers.

Hathway has bought 51 per cent stakes in Bhaskar Multinet, the cable wing of the Dainik Bhaskar Group, and Gujarat Telelinks, and acquired Marathwada Cable Network in Aurangabad. Digicable has recently acquired a 51 per cent stake in the Kolkata-based CableComm to expand in the eastern region of India.

WWIL, which already has a presence in 43 cities, is the only player in the market currently to offer HITS (Headend-in-the-Sky) having acquired a license for it years ago. HITS is a technology that enables delivery of multi-channel television signals to cable operators who can downlink these from a HITS satellite and push them to their subscribers via a set top box. This is a more cost-effective method of achieving digitization since it doesn’t require too much investment from the cable operator who merely has to equip homes with the set top box and become a franchisee.

Competition in the cable TV segment is intensifying as the battle over acquiring the last mile cable operators continues. New players like Asia Net and You Telecom are also entering the fray. You Telecom is said to have committed Rs. 120 (US$ 24 million) crore towards its digital cable business expansion.

Rising investment

The fragmented and unorganized cable TV sector has attracted little investment in the past, even though it is a profitable sector generating annual revenues of over Rs.10, 000 crore (US$ 2 billion). This is primarily due to massive under-reporting of subscriber numbers having an adverse impact on the broadcasters revenue. Consolidation in the industry is attracting the attention of private equity players, as the scattered cable TV operators come together to form meaningful corporate entities.

The cable TV sector will come under a proper licensing mechanism where city, state or national licenses can be bought. The TRAI recommendations are a big step forward in ensuring effective licensing compliance, digitization of networks and attracting investment. Collectively, the industry is said to be investing close to Rs 500 crore (US$ 103 million) on digitization.

The Way Forward

The cable sector is emerging as a very attractive space owing to the TRAI recommendations and the clear edge of digital cable over its competition like DTH and IPTV in offering a larger number of channels, greater reliability even in adverse weather conditions and easier access to cheaper after-sales and customer services.

According to reports of Informa Telecoms and Media Group and Media Partners Asia (MPA), India will overtake Japan, Australia, Hong Kong and South Korea to become the second largest digital cable TV home market in the Asia Pacific region

However these growth plans largely depend on factors like having a more liberal FDI policy for cable operators, a focused plan for digitization, greater clarity on HITS guidelines and a licensing framework for last mile cable operators.