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Broadcasting
October 27, 2006
DTH vs Cable. The battle begins
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After Tata Sky launched its Direct-to-Home (DTH) service recently, the service to home TV market has become a huge battleground for bagging customers. Tata Sky a joint venture of Tatas with Hong Kong-based Star TV has to overcome the first mover advantage that Subhas Chandra’s “dishtv” already enjoys. Doordarshan’s DTH has been there even before dishtv came but being a government-owned channel it may have problems despite the free access it offers to its subscribers. Meanwhile, the Cable TV cornucopia that dominated this market with some 60 million homes as subscribers is clearly feeling the heat of competition from the new DTH operators. |
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NEW DELHI --
There are still other technologies cutting through with several marketing techniques to enter the estimated 200 million homes that urban and rural India together has. Broadband is the other competitor and as connectivity at 256Kbps enhances capacity of telecom service companies to deliver more triple-play content to subscribers, telcos are expected to lure TV channels to use their bandwidth for reaching TV pictures home. The opportunity broadband offers for TV channels is yet to be fully understood or converted into business plans but many telcos are planning their own IPTV channels for an all India launch. Telcos would have to work with Internet Service Providers (ISPs) for bringing IPTV to homes.
Convergence Plus has scoured the home TV market talking to both DTH and Cable TV operators on the emerging competition among them for widening their reach. Broadband is just emerging with telcos slowly realising a business opportunity in providing TV over broadband networks they are in the process of setting up. The TV channels are also in the game as they must ensure that the maximum access for their channels is obtained even as the three separate access providers battle it out for space that had been so far occupied by only one — that is, cable service providers.
Tata Sky's new uplink center The situation is getting hotter with the government imposing CAS (Conditional Access System) on metro cable operators to begin with. CAS will let the cat out on how many subscribers each operator reaches out to and how many of the homes watch which channel at what time. Both these information should go a long way to gain an accurate measure of how many customers each cable operator has and how much of the channels that these operators push into homes, are really watched and at what time. The resulting transparency will generate many changes in the entire system of TV viewing.
The Telecom Regulatory Authority of India (TRAI) has also got into the act. It has recently issued guidelines for making mandatory implementation of CAS though last time similar adventure by the government ended in smoke. TRAI has also said that for DTH there need be no mandatory pricing for the consumer as the rate operators have set is already lower than that of cable operators rate per channel. Naturally, the intense competition between DD, dishtv and Tata Sky for netting the skeptic subscriber who need to be convinced that the dish is a better option than cable, our interviews with the operators show that they are all aware of the marketing problem.
Both of the two private sector operators have designed different capsules to suit the differing requirements of customers. At lowest cost capsule the customer need to pay only Rs. 180 per month in North India and Rs. 160 in South India. The operators are also brush aside the criticism that cable offers more channels as compared to dish. Besides dish has many new features like interactive TV. Besides, even cable operators would have to set up set top boxes eventually as the TRAI mandate begins to bite all cable customers. The initial cost makes a difference only in regard to the dish antenna that needs to be installed for the DTH. (please see the interviews alongside)
The dish marketers might emphasise the advantage DTH gives in additional connections so that in each home there could be more than one TV to cater to the different interests of the members of the same family. Such a development would help channel owners also so that viewership would broaden. The current constraint in cable TV is that all members of the same family are forced to watch one channel at a time, the decision which channel to watch often decided by the elder members.
DTH offers variety of features including such things as child lock but STBs retailed by the cable TV operators would also be forced to install such facilities in their equipment to compete with DTH. The dish it is claimed brings far better and richer viewer experience than the cable. However, this difference might even out over the next few years due to technology developments.
The cable operators would not be contend with the situation if DTH catches up with its new features even more than the number of channels it offers. There would be enormous pressure on them to install fibre optic cables with interactivity and use broadband channels to drive TV into homes. With broadband cables the TV could become interactive and bring in a wider range of services including voice communication.
The investment required for such transformation is so high that it is doubtful if the present small time cable operators would survive as the cable service industry consolidates behind a handful of operators with deep pockets. The big operators like Siticable are already catching the wind and others would follow. Both DTH and cable operators are likely to strengthen their market power with purchase of MSOs and head end operators and seek to dictate terms to channel owners. As it has happened abroad in more sophisticated markets, both cable and DTH might co-exist finally each carving out a niche for itself.
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