Access granted but cost a challenge

Media companies in India have been working on direct-to-home (DTH) ventures as far back as '96, but Government restrictions on foreign investment, coupled with the prohibitive costs of setting up and subscribing to the DTH services , have helped rein in prospective growth of the new medium.

However, the news that two more broadcasters have been given the go-ahead to offer DTH services in India -- Star, through its Space TV joint-venture with Tata, and Sun TV -- should accelerate the development of DTH, a digital platform enabling satellite broadcasters to bypass the cable operators who previously controlled the sole entry point for satellite signals into Indian homes.

The news of Star's propsective service already prompted Zee -- which launched its Dish TV DTH service in October 2003 -- to slash the cost of its rates. DTH uptake had been hampered by high subscription fees and hardware costs, comparing unfavourably with the average cable TV bill of $6.50, which buys access to over 200 channels, without the need for any hardware investment.

"Availability of content and pricing primarily drive the television subscription market in India," notes Deepak Kapoor, an executive director of PricewaterhouseCoopers' entertainment and media practice. DTH is essentially a secondary market, seeking to be the second platform in a two TV home or trying to get existing cable subscribers to switch, so the pace of growth will hinge on what viewers can watch and how much it costs, he adds.

The other main DTH player, public broadcaster Doordarshan, already offers its services for free but recently announced several new channels on its platform as a response to increased competition in the DTH sector.

Existing DTH broadcasters are working around the problem of limited content by offering exclusive channels unavailable on cable -- Dish TV, for example, carrying Zee Select, Turner Classic Movies, Zee Premier, Zee Classic, Trace TV, SoundTrack and Boomerang.

However, this cuts both ways, with many channels broadcasting on cable and satellite currently available on DTH.

Nevertheless, players are bullish on DTH's growth prospects. Sunil Khanna, CEO, Dish TV, says the DTH industry will grow from three per cent of homes in 2006 to 14 per cent in 2010, with industry estimates showing an expected increase in cable and satellite households from 53 million in 2006 to 77 million in 2010. Dish has already achieved presence in 250,000 homes, Khanna says. Vanita Keswani, media director of Madison Media, thinks DTH will be readily accepted in cable-dry areas, as viewers will not have had anything like it before. "That's the situation in some rural or semi-metro areas, while urban areas are more likely to be attracted to the superior quality of digital viewing and exclusive programming," she adds.

In tandem with the growing interest in DTH, TV ratings companies are also paying more attention, with TAM Media services planning a new panel that would ensure that viewers of the direct services are tracked and monitored. "It is interesting to note that the first time users of every new technology are the high-end segment," says LV Krishnan, CEO, TAM Media Research.

Consequently, the company is planning to set up an elite panel that will track this high-potential target audience.

However, initially DTH is expected to complement the overall TV market by providing another medium for viewers to access content, rather than boosting niche adspend. Nevertheless, the digital technology DTH employs allows far more channels to be beamed into people's homes than the analogue technology used by cable, and should in time grow the overall advertising pie with new channels.

PwC's Kapoor says: "Since India is already flooded with general entertainment channels, niche channles are expected to comein. This feature is then expected to give the boost to the niche advertising market in India."