In a fast-changing digital-first world, even nostalgia has a shorter time-frame. It was only some years in the past that Indians had began warming as much as the concept of giving up on the age-old and unreliable cable TV connections and terrestrial TV that got here with a cumbersome antenna setup, in favour of direct-to house (DTH) satellite tv for pc TV service. In 2006, when Tata Sky launched its DTH service, the corporate had a transparent motive: give Indians a style of premium viewing with companies comparable to 24×7 buyer help, digital video recording (DVR), high-definition image high quality, and so forth. In the present day, at the least for a number of, even pay TV is quick turning into nostalgia due to the onslaught of OTT and a looming bugbear known as DD Free Dish.
To counter that, India’s largest DTH operator, which is a three way partnership between the Tata group and Sky TV (then owned by Rupert Murdoch and now owned globally by The Walt Disney Firm), has donned a brand new identify—Tata Play—and a brand new look. Its model colors blue and purple at the moment are white and pink. However the model’s fundamental ethos stays unchanged. “Now we have the identical philosophy, similar ethos and similar obsession for the shopper which is what bought us right here,” says Harit Nagpal, MD & CEO, Tata Play. “The one factor that modified a few years again was that individuals began watching past tv, and we thought since we’re distributors of content material, we ought to be medium-agnostic and turn out to be aggregators for OTT (over-the-top) content material as properly.” Tata Sky acted as a distributor/aggregator of simply tv content material whereas Tata Play gives bundled packs the place as a household, somebody can watch TV content material, somebody can watch OTT content material and somebody can watch the identical content material on their telephone. They are going to be billed as a household for his or her leisure wants from the identical vendor as an alternative of 10 totally different particular person subscriptions to maintain monitor of.
In 2019, the corporate made a foray into OTT with the launch of ‘Tata Sky Binge’, a platform that brings digital content material from a number of apps into TV, however due to its sturdy DTH model recall, individuals would nonetheless affiliate it with simply TV. “We realised we would have liked to do a refresh for the model so that individuals begin believing that we’re distributors of content material and never simply distributors of TV content material,” Nagpal explains. In FY19, the corporate’s consolidated revenue after tax (PAT) grew 463 per cent to Rs 364 crore from Rs 64 crore in FY18. Partially offset by the pandemic, the expansion couldn’t maintain for too lengthy. In FY21, it reported Rs 69 crore PAT—marginally crossing its 2017-18 numbers. That’s why the identify change was most likely extra survivalist than symbolic.
The free dish onslaught
India’s DTH trade is going through a two-pronged assault from DD Free Dish on one facet and OTT on the opposite, and the problem is greater from Free Dish, which is a free-to-air DTH service owned by public service broadcaster Prasar Bharati with round 52 million customers in India, in response to Media Companions Asia, a analysis, advisory and consulting agency. With greater than 100 TV channels on board, Free Dish, launched in 2004, has a rising presence in rural households regardless of a large shift in direction of on-line streaming platforms. Through the pandemic, thousands and thousands of DTH clients dropped their subscriptions. However Nagpal believes that was not due to OTT’s surge. “Our information reveals that it’s not the individual subscribing to Netflix who has switched off his TV subscription. Service-sector workers from villages who had lower-end plans had been intermittently switching on through the pandemic to economise on their bills,” says Nagpal.
Free Dish has lengthy been a development deterrent for DTH gamers like Tata Sky and Airtel, however many consider that it is a crucial software for individuals on the decrease finish of the spectrum to begin with free TV, get into the content-watching behavior, after which improve to higher high quality pay TV. “There are round 125 million households that don’t also have a TV as we speak. It’s a really good pool for us to poach from and get 3-5 million subscribers yearly. The larger this pool will get, the higher it’s for us. Free-to-air does the job of creating individuals purchase TVs. It’s a step-wise transition. It’s not competitors however a supply of consumers for us,” says Nagpal.
Utkarsh Sinha, Managing Director of advisory agency Bexley Advisors, says India is a leapfrog nation and may not evolve linearly prefer it’s been anticipated. “One of many largest manifestations of that is within the OTT house. Given the truth that India turned a mobile-first nation, the leisure pockets is restricted. There are a variety of content material corporations vying for a similar viewers. Hundreds of thousands who nonetheless don’t have entry to TV may go straight to cellular. Tata Play’s DTH and OTT bundle is sweet, however it completely depends upon how it’s priced,” says Sinha.
Tata Play gives a 50-mbps velocity plan at Rs 850 per 30 days. Nevertheless, customers can convey the efficient worth under Rs 500 per 30 days by selecting to pay for 12 months collectively. Rival JioFiber, Reliance Jio’s broadband service, comes with a base plan of Rs 399 per 30 days, which gives 30-mbps speeds with a FUP (honest utilization coverage) restrict of as much as 3.3 TB. However, Airtel’s Xstream Fiber connection gives a ‘fundamental’ pack of 40 mbps at Rs 499 per 30 days.
“Within the DTH enterprise, we now have a presence in 18 million houses with an ARPU (common income per consumer) of Rs 146… Free Dish continues to disrupt the enterprise mannequin pretty much as good content material continues to be supplied at no cost in huge waves of the nation. On the similar time, the irony is that the chance to transform and improve from cable is very large. There may be additionally an enormous alternative to monetise OTT content material and ship a unified linked expertise by means of Airtel Xstream,” Gopal Vittal, CEO, Bharti Airtel, stated in a latest investor name.
In keeping with Media Companions Asia, the expansion of pay TV and DTH has been hampered by Free Dish, which is exterior the purview of the New Tariff Order. No price must be paid for a free-to-air (FTA) channel by a distributor comparable to DD Free Dish whereas personal DTH operators must pay most retail worth to the broadcasters to distribute these channels to subscribers. DTH gamers have known as it discriminatory and unfair.
“We’re not questioning licence charges. We’re principally asking to not tax a know-how if a cable operator is distributing the identical know-how on the similar worth with the identical margin. Regulated by the identical regulator, why am I paying 8 per cent and he’s paying zero per cent?” asks Nagpal. Mihir Shah, Vice President, Media Companions Asia, agrees. “Through the years, migration of accelerating variety of pay channels to FTA has strengthened the buyer proposition of Free Dish, making it difficult for personal DPOs (distribution platform operators) to develop on the similar tempo,” he says, including that the most important problem for DTH is the regulation itself. “There needs to be a stage enjoying subject on laws for conventional and new different modes of video distribution.”
Tv nonetheless guidelines
In keeping with IBEF (Indian Model Fairness Basis), tv is among the largest and fastest-growing segments. In 2020, the tv market dimension stood at Rs 77,800 crore ($10.66 billion) and is estimated to face at Rs 76,900 crore ($10.53 billion) by 2022. India’s tv trade nonetheless has 120 million paying subscribers together with cable, and gamers comparable to Tata Play are banking on almost half of those that pay for cable TV to improve to pay TV in some unspecified time in the future. “TV isn’t a written off trade. It’s our bread and butter. TV and OTT are the 2 industries that can develop. That’s why we’re distributors of each,” says Nagpal.
In keeping with a latest report by CII-BCG, India grew to 70-80 million paid subscribers of OTT platforms on the finish of 2021 from simply 0.5 million in 2014-15. Through the pandemic, OTT turned the web avenue for brand new film releases and the trade has seen a 4x soar within the variety of OTT companies prior to now six years.
Seeing the large development potential of the OTT trade, Tata Play, which is understood to be one of many first to introduce improvements like Hindi language EPG (digital programme information), DVRs, HD STBs (set-top containers), and so forth., sees a buyer want whereas rising its present enterprise on account of the spillover from Free Dish and cable TV customers. “Our differentiation isn’t on pricing however on course of. We gained’t throw apps at individuals. When individuals sit down to observe TV, they don’t watch to observe Hotstar, or Zee5 or [Amazon] Prime [Video]. They’re searching for content material in a selected style or a present that everyone’s speaking about,” says Nagpal.
Tata Play took two years to construct a entrance finish that permits customers to distinguish based mostly on tastes quite than platforms. Nagpal is focusing on this new providing in direction of households. “The family subscribes for TV prefer it subscribes to electrical energy. Now, when one individual has began watching OTT, why ought to that subscription be particular person?” he argues. “You might have just one electrical energy connection in the home. You don’t pay by room. Then why ought to content material not be a shared value for the household?” he asks.
Tata Play needs to show an STB into an OTT field. “Tata is well-positioned to compete in that house. So far as leisure consumption goes, the subsequent era will likely be cord-cutters. However there’s a variety of life left in TV particularly as a result of information is such a giant deal in India. That’s the most important factor that retains DTH sticky,” says Sinha of Bexley Advisors.
The Indian market has 4 main pay DTH suppliers—Videocon d2h, Tata Play, Airtel, and Solar Direct. In keeping with a FICCI-EY report, pay TV will proceed to develop as states comparable to Uttar Pradesh, Bihar, Rajasthan and West Bengal get electrified. Nevertheless, extra new customers will enter the free TV market because the Free Dish channel rely will increase to round 200 by 2022 (from 164 in 2021), offering a low-cost promoting alternative to entrepreneurs, regardless of the choice of huge broadcasters to take their content material off the platform in February 2022.
Tata Play’s closest competitor, Airtel, additionally gives the Xstream Premium field with over 5,000 pre-loaded apps at Rs 4,798. Whereas giant telecom corporations like Jio have launched an analogous product portfolio at a way more aggressive worth level, gamers like Tata Play and Airtel have used product innovation comparable to bundling OTT with tv to distinguish themselves. “These product improvements is not going to solely preserve churn underneath verify but additionally allow the platforms to broaden their ARPU in the long term. Tata Play caters to these discerning city audiences who need to watch the very best of each worlds,” says Shah.
He believes that India may skip the multi-TV stage that was seen in a number of mature markets. “A number of developed markets had the time to evolve and see the expansion and maturity of pay TV. Whereas India simply attained its TV digitalisation aims, the simultaneous cellular information growth within the nation will make it skip the multi-TV monetisation section. In the present day 95 per cent of the houses in India are single TV. Many family members might favor shifting to cellular or tablets for extra personalised viewing,” says Shah.
He argues that Tata Play’s new proposition will work properly in city centres with lots of them adopting linked TV options. Many of those DTH gamers that intention for development from a number of streams see India extra like a continent than a rustic. “There are numerous Indias inside India. Thus, for a nationwide participant, it’s essential to have horses for programs catering to diversified viewers cohorts having a variety of viewing preferences,” provides Shah.
The India method
India is at about 55 per cent TV family penetration versus the Asian common of round 85 per cent. With the western markets such because the UK and the US having had respiration time for TV to evolve, Indian media are at totally different phases of evolution, affordability, and client alternative, the place each type of media appears to be rising manifold. KPMG says DTH broadcasting accounts for 37 per cent of the overall tv subscribers in India and is estimated at roughly Rs 22,000 crore ($3 billion) in 2020-21 as in opposition to 34 per cent in 2018-19.
Even digital subscriptions, on the again of rising consumer adoption, continued to rise strongly at 47 per cent in 2020-21, though there was some resistance because of the mixed components of OTT video gamers growing their package deal costs and the gross sales influence of a slowing financial system, in response to a KPMG report.
Specialists level out that since India has been on the all-time low by way of information pricing and web bandwidth prices, Tata Play’s aggregated proposition will make far more sense within the OTT market because it matures additional.
However why launch now? “We’ve realised that there’s a necessity out there. What number of subscriptions will individuals preserve a tab on? There’s a necessity hole,” Nagpal says.
He makes his level on the viability of a number of media in a novel method. “The aim of any transport mechanism is to switch you from level A to B. Now, comfort prices more cash. TV is just like the bus or the prepare. It’s by appointment. OTT is just like the automobile. Simply because a automobile has been invented doesn’t imply individuals will cease travelling on buses or trains,” he says.
Effectively stated, however over time, whether or not or not the vehicles outpace the trains and buses due to their comfort, stays to be seen.