dth market - india - sample

DTH Market – India

December 2009

2DTH MARKET - INDIA.PPT

SAMPLE

Executive Summary

Drivers:

�Growing middle-class and rising

disposable income

� Increasing television penetration and sale

of LCD monitors

�Price war and different package options

attracting consumers

�Advantage over traditional cable

operators

Market

Drivers &

Challenges

Trends

Competition

�Market is valued at INR XX bn in 20-- - -- and projected to reach INR YY bn in 20-- - --

�Estimated subscriber base of U mn, expected to reach V mn in the next w years

�Current overall share of DTH households among total TV households of India is pegged at a%

Challenges:

�Getting a share of the cable driven market and

facing the new age IPTV

�Trapped in TRAI’s content guidelines

�Demand supply gap for transponders in a 7

player broadcast market

�Cap on Foreign Investments

�Company 1, the first company to enter is the largest player, controlling ~t% market share

�Steep competition has led to a surge in advertising spend to improve penetration

�Due to growing number of players in the market, Average Revenue Per User (APRU) will decline

owing to price war and discounts

�Technological Innovations

�Shift from price war to offering exclusive VAS

�Combined retail of LCDs and DTH connections

�Partnerships with movie distributors


•Market Overview

•Drivers & Challenges

•Trends

•Regulations

•Competition

•Key Developments


SAMPLE

DTH industry in India has looked upbeat in recent years but

remains a niche segment

•Estimated market value of INR XX bn in 20--;

expected to reach INR YY bn at the end of 20--

•In the Indian Pay-TV market, DTH penetration

is only a% (June 09), reaching U mn out of V

mn paid subscribers

•Current overall share of DTH households

among total TV households of India is pegged

at b%

•c% of DTH subscribers reside in rural areas and

towns with a population under 1 mn and is

largely dominated by free-to-air service

•The market has 6 private broadcasting

companies namely Company 1, Company 2,

Company 3, Company 4, Company 5 Free to Air

operator – Company 6

�New entrant: Company 5 in May 20--

Overview Segmented Pay TV Subscriber Base

Distribution across TV Households (HH)

Source:

0

20

40

60

80

100

d2

d1

2006

e2

e1

2007

f3f2

f1

2008

g3g2

g1

2009e

h3h2

h1

2010e

Type 1

Type 2

Type 3

Subscribers in mn

0

20

40

60

80

l1

l2

2006

m1

m2

2007

n1

n2

2008

o1

o2

2009e

p1

p2

2010e

Type 1

Type 2

HH (%age)


SAMPLE

Overall cost structure in the DTH Market and the

breakdown of the subscriber acquisition cost

• Programming cost is the largest cost for a DTH

operator

� Determined as a proportion of subscription revenue that

the operator collects from subscribers

• Growth in subscriber base is expected to lead to a fall

in advertising expenditure to a% of overall revenues

by FY ’--

• Break-even point is estimated to be met in U-T years

Overview

Operators Cost Structure

Subscriber Acquisition Cost

Source:

b%

Cost 1

c%

Cost 2

d%

Cost 3

e%

Cost 4f%

Cost 5

g%

Cost 6

h%

Cost 7

C10P10

C9P9

C8P8

C7P7

C6P6

C1P1

C2P2

C3P3

C5

C4

Cost (INR)

P4

Parameter

P5

SAC is borne by the DTH players affecting their

profit margins substantially


Drivers and Challenges

Price war and different package

options attracting consumers

Advantage over traditional cable

operators

Drivers

The growing middle-class and rising

disposable income

Increasing television penetration and

sale of LCD monitors Cap on Foreign Investments

Trapped in TRAI’s content guidelines

Getting a share of the cable driven

market and facing the new age IPTV

Challenges

Demand supply gap for transponders

in a 7 player broadcast market


Key Trends

Shift from price war to

offering exclusive VAS

Combined retail of LCDs and DTH connections

Technological InnovationsPartnerships with movie

distributors

Trends


SAMPLE

Competition in the DTH market has grown with 6 players on

a subscriber acquisition spree

•Oligopolistic market structure

•Competition is high as market is saturated

with 6 private players and 1 free-to-air

provider namely DD Direct

•Competition here like any infrastructure

industry is about scale and volume capture

•Steep competition has led to a surge in

advertising spend to improve penetration

•With greater number of players in the market,

Average Revenue Per User (APRU) will decline

owing to price war and discounts

•Company 6 is planning to move to a paid

model increasing competition

�Plans on offering 144 pay channels, 4 hi-definition

channels and 50 radio channels

•The scope for new entrants is limited as the

challenge posed by high cost of CPE and the

high costs entailed for leasing transponders

Overview Market Share by Volumes

Source:

a%

Company 1

b%

Company 2

c%

Company 3

d%Company 4

e%

Company 5


SAMPLE

Players in the Market (1/6)

Headquarters H1

Established Oct 20- -

Financials FY ’09: Revenue - INR - - mn; Loss – INR - -

mn

Key PeoplePerson 1 – Chairman

Person 2 – MD

Company Snapshot: Company 1

Corporate Information Packages Offered

D4C4P4

C5

C3

C2

C1

Cost (INR)

D2P2

Packages Description

P1 D1

P3 D3

P5 D5

Business Highlights Interactive Services Offered

• Service 1 – Watch movies any time on demand

• Service 2 - Matrimonial & job search

• Service 3 - Planning tours on TV via Yatra.com

• Service 4 - Downloading mobile services

• Service 5 - TV banking with ICICI Bank

• Service 6 - Active worship

• Service 7 - Astro forecasts and predictions

• Service 8 - Interactive experience of sports/news

• Service 10 - Address regional language needs

• Offers largest number of channels with focus on strong

regional content in linguistic zones

• It began providing up-front subsidy on set top boxes to

acquire subscribers

• Large sales and distribution network - A ‘Dish Shoppees’ to

provide demo’s to prospective users (Jun ‘- -) and wide reach

to B towns and P dealers (Sep ‘- -)

• Received a PE investment of INR T bn through GDR from

Company L in Nov ’- -

• Heavy capex investment has enabled the company to deliver a

high end audio-video quality

Source:


Thank you for the attention

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