Developments in television distribution

Currently, there is no standard system used across the cable industry. Each of the MSO uses the system as per their preference and affordability. Cable industry is very primitive if we look at the technology standards across the industry. Users are lured for jargons such as DTH and IPTV, which looks promising, but cable industry is the most matured, flexible & economical solution available.

Definitely DTH has its own digital & bandwidth advantages, but lack of interactivity & bundling is a great disadvantage. IPTV solution is best, but considering the fact that India does not even have the fast Internet penetration even in cities like Delhi, Mumbai, Calcutta, Chennai & Bangalore are least. Rolling fiber to homes is an unrealistic joke because even getting the GPS plan for roads are nightmare in India.

However some independent studies expect IPTV to expand in near future as the broadband penetration of TV households increases.

As the Indian cable TV world analyzes the available option to go digital, the head end and broadcasting equipment companies are trying to make money. The existing head end and the conditional access systems costs are very high (minimum of $1 million). None of the companies are providing the solution built for Indian market. Now is the best time to take cable industry to next step by bundling TV, Internet and telephone in single service.

• Digitalisation is becoming more established across the Indian television distribution network. The past two years have seen penetration of DTH increase significantly, while the adoption of CAS was slower than expected.
• During 2008, regulations regarding IPTV were clarified which is expected to pave way for both cable operators and telcos to move into IPTV without the need for any additional licences.
• While public broadcaster Doordarshan launched its mobile TV pilot project in 2007 with handset major Nokia, there were no other significant developments in this front since then. However, there have been numerous initiatives by TV broadcasters for bringing re-purposed television contents on to mobile handsets, in anticipation of growth in Mobile TV services. These include Star TV’s launch of the PLUS application and the Essel Group DMCL collaboration with BSNL to launch a mobile application.
• In 2009, Doordarshan released an Expression of Interest to hire a consultant for developing a roadmap for ‘Public Private Partnership’ for the growth of DD’s mobile TV service. Reliance Communications now offers BBC news round-the-clock via a mobile streaming (uni-cast) service to its mobile users across the country. Through this agreement, Reliance Mobile users can access BBC's trademark live-breaking-news and other programming initiatives as they happen directly on their handsets.
• While the conditional access system (CAS) was introduced in 2007 in select areas of Mumbai, Delhi and Kolkata, there have been no developments in this front since then.
• In 2008, News Corp.– owned entity Star India formed a 50-50 joint venture with DEN Digital Entertainment Networks to distribute television channels on all fixed networks, including cable, DTH (direct to home), IPTV, HITS (Head end in the Sky) and MMDS (multichannel multipoint distribution service).

Indian TV Distribution Market – Now and Future

Challenges and Growth Drivers

Challenges:

• Lack of consumer choice for last-mile access;
• Under declaration of subscriber numbers resulting in revenue loss for broadcasters and tax loss for the government;
• Absence of uniform pricing with prices varying across geographies and consumer segments;
• Lack of level playing field for alternative platforms like DTH, IP-TV, etc resulting from 'unreal' cost structures of incumbent access providers and non-uniform licensing conditions,
• Increasing content costs for TV channels as the broadcasting space gets overcrowded.
• Intense competition and inability of DTH companies ensure low ARPUs thus affecting their bottomlines
• As the number of channels increase differentiation of content is likely to become increasingly important.

Growth drivers:

• Rapid growth in the number of digitized households
• Steady increase in ARPUs realized through digital distribution platforms
• Growth in the number of channels, especially in niche and regional categories
• Growth in the number of TV and C&S households

Government Initiatives

The Government has initiated major reform measures, which have had a cascading effect on the growth of the industry.

• Appointment of the Telecom Regulatory Authority of India in 2004 as a regulator for the television industry (with its scope increased to cover broadcasting and cable services).
• Allowing 49 per cent foreign holding in cable TV and DTH.
• Permitting setting up of uplinking hubs for satellite uplinking by private TV broadcasters from Indian soil.
• Headend-in-the-Sky (HITS) was introduced to help digitalization and rural reach. HITS would help a subscriber with a wide choice of digital channels, better picture quality and value added services at affordable price. HITS would provide greater channel capacity from the present limited capacity of channels placed in prime/non prime band.

Industry wishlist:

• Enhancement in FDI limits in case of cable network and DTH to 74% in order to bring them at par with competing technologies in IPTV.
• DTH players are subjected to both service tax and entertainment tax. There is a demand for removal of such double taxation.

Indiabiznews, July 30, 2010