India's TV industry is relatively
young – what are the challenges?
The broadcast industry in India is
just about coming of age. Absence
of sustainable varied revenue
models has been a challenge with
the industry being largely
advertising supported so far.
Inadequacies in the measurement
system coupled with ballooning
creation of additional advertising
inventory in the last few years has
ensured that TV is an underpriced
medium for advertisers. The total
number of channels increased from
623 in 2011 to 845 in 2012.
Diversification of revenue
streams is a must for sustaining the
future growth in the TV industry.
The heralding in of digitisation and
subsequent addressability in
distribution should open up
additional revenue sources and
make more business models viable.
Pricing at the consumer level is
also another challenge with the
consumer having been brought up
on ridiculously low cost of TV
access and high price sensitivity.
Moreover, in the DAS regime the
government is regulating the retail
pricing and the revenue share
arrangements in the broadcast
delivery chain. Growing
subscription revenue and
establishing additional content
monetisation streams like
syndication, digital platforms, etc.
will be a key focus area for the
industry.
However, with a population of
1.2bn and a TV penetration of 730m
there is still a large growth
opportunity to be exploited. Even
within the currently penetrated
population there is a lot of scope for
growth with TV viewing time in
India averaging a little over 150
minutes per day as compared to
developed markets like the US
where it is in excess of 300 minutes
per day.
What is the outlook overall?
Looking at India, we need to
understand the various media
landscapes within the country: (1)
Urban and largely metro in
orientation, with digitisation now
seeded and cable and DTH
competing effectively; (2) Mid‐
urban / semi‐rural, where
digitisation will seed in 2014 and
develop the geography; (3) Rural,
with larger DTH penetration and
public broadcaster penetration; (4)
Homes without TV (100m) – the
growth engine of the future, which
will enable India to be as large as
China in terms of TV homes; (5) As
3G and 4G services become
effective, stored content and live
content on OTT will enable growth
of audio‐visual viewing.
Digitisation is stimulating access
to niche and defined content. Over
time, as subscriber transparency
sets in, revenues will grow for
broadcasters and enable more
content creators to be pay. In the
medium term the difference
between free and pay services will
get more sharply defined. DTH and
cable will compete effectively.
There is anticipated integration or
consolidation in cable. With many
MSOs now spreading their foot
print over digitised markets, the
focus for both platforms will be
packaging and service levels. The
industry anticipates regulation will
change in terms of bundling,
pricing and aggregation. This will
create challenges for content
creators as they would want their
brands to be picked in as many
homes as possible.
According to FICCI‐KPMG, the
total number of TV households is
estimated at 154m in 2012 and
projected to grow to 191m in 2017.
Paid C&S penetration estimated at
79% in 2012 is projected to grow to
91% in 2017.
And yet in a country of 234m
households that still leaves ample
room for growth. The digital
transformation of the industry is
gathering pace. The FICCI‐KPMG
report estimates cable ARPUs to
grow from Rs. 166 in 2012 to Rs. 289
in 2017 while DTH ARPUs are
projected to increase from Rs. 170
to Rs. 293 in the same period.
Your advice to foreign players?
There is a tectonic shift taking place
on the affiliate and TV penetration
side of the business and this will
open up even more opportunities
in the sector by making multiple
business models viable. The
regulatory environment is very
liberalised and industry bodies like
the Indian Broadcasters Federation
and the News Broadcasters
Association are extremely active in
shaping the future growth of the
industry. All in all it is a sector that
is poised for tremendous growth.
Sunil Lulla, thank you.
THE CHANNEL
|
ISSUE 1 2014
|
49
▼
ET NOW
anchors Niraj
Shah, Tanvir Gill,
Nikunj Dalmia
and Ayesha Faridi
▼
Deepika
Padukone joins
zoOm’s Editor In
Chief Omar
Qureshi for the
channel's
anniversary
▼
TIMES NOW
Editor-in-Chief
Arnab Goswami
