It’s going to be fireworks in the country’s direct-to-home (DTH) space in the coming months as the industry’s big three — Reliance Big, Dish TV and Tata Sky — scuffle for eyeballs.
Players offering lollies, line up lavish ad spends
MUMBAI: It’s going to be fireworks in the country’s direct-to-home (DTH) space in the coming months as the industry’s big three — Reliance Big, Dish TV and Tata Sky — scuffle for eyeballs.
With the entry of Reliance Big on Tuesday, rivals Tata Sky and Dish TV are also said to be offering lollies and lining up huge advertising spends to lure away customers from cable television.
Also, with Reliance Big TV targeting a 40% market share in 12 months, experts say it will be an interesting run for the crown.
Dish TV currently has about 59% market share followed by Tata Sky.
Other players such as Videocon and Bharti are expected to launch their DTH services in the current fiscal.
India currently has about 120 million TV homes and 7 million out of these have a DTH connection.
According to industry officials, this number will increase five times to 35 million by 2012.
This will essentially mean converting about 80 million cable and satellite (C&S) homes to DTH.
Arun Kapoor, CEO, Reliance Big TV, is confident that this target would be met.
“When the government takes digitisation of television to over 55 cities in the next 12-15 months, conditional access system will come into play. Customers will have to switch to digital television. From our experience we can say that people will prefer DTH over digital cable. The idea, therefore, is to grab as many customers as soon.”
He said this would become possible through lavish ad spends over the next year, most of which would be on advertising, promotions and customer acquisition.
Industry buzz is that Reliance Big TV is pumping in over Rs 150 crore for its launch campaign. The company hasn’t roped in a brand ambassador yet. “Our product is our ambassador right now,” Sanjay Behl, head-brand and marketing, Reliance Communications, said.
Meanwhile, Dish TV is said to be spending around Rs 125 crore on advertising, promotion and customer acquisition initiatives.
Tata Sky also promoting its product big time. The company recently roped in actor Aamir Khan as its brand ambassador.
Vikram Mehra, chief marketing officer of the company, said the ad campaign featuring Khan would go on air soon.
Big TV’s Kapoor said all these DTH companies cumulatively would spend Rs 800-1,000 crore on advertising in the space.
“All this money can only help grow the market,” he said.
Analysts claim that the current average revenue per user (ARPU) for DTH is around Rs 140/month, which is quite low. “This leaves a lot of room for growth,” they said.
Shubham Majumder and Nitin Mohta, analysts with Macquirie, in a March report on
India’s DTH sector said the industry is at an early stage of growth and the primary focus is on attracting customers. “We expect upgrades to higher-denomination packages from starter packages, new channel launches and better uptake of value-added/active services to raise ARPU for all key players over the next two to three years,” they said in the report.
However, considering that the pricing for all these services is competitive, how product differentiators in the DTH category pan out remains to be seen.
Tata Sky for one has been heavily promoting its interactive features such as gaming and spiritual value-added services.
In terms of configurations, Reliance Big TV seems to have an edge as it is offering MPEG4 set-top boxes that have higher compression benchmark and allow the service provider to pack in more channels. But, the MPEG2 configured set-top boxes that are being offered by Dish TV and Tata Sky have lesser compression abilities.
To counter this, Mehra of Tata Sky said the company would soon launch set-top boxes that would have PVR (personal video recording) facilities.
Despite such cut-throat competition, industry players said it’s not each-other’s market share that they were eyeing at the moment, but the target now is to convert as many cable TV households possible to DTH.
“Let’s get this clear - it’s not a war. We’re all for digitisation. The challenge is to convert from cable to DTH. When the market matures, it’s the customer who will decide which platform offers better service,” Mehra said.
Dish TV, which is currently the market leader among all private players, has close to 3.5 million DTH customers and Tata Sky claims to have 2.3 million connections.
DD Direct Plus, the government-owned free-DTH service, has more than 7 million connections.
c_arcopol@dnaindia.net
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