Cable TV Vs DTH : Price War in the Digitization Era

[tech_genie]

RE: Cable TV Vs DTH : War in the Digitization Era

Cable operators try to save revenue after digitization

As the deadline for the switch-off of analogue cable TV dawns nearer, Hathway cable has introduced a new packaging system to avoid any steep decline in its revenue.

According to TRAI rules, consumers can simply unsubscribe from any channel they don't want to watch, after digitization. This will not only lower the revenue of cable networks due to a fall in subscriber revenue, but also hit them due to a possible fall in carriage fees.

As of now, channels pay large sums of money to cable networks to ensure that their channels are carried in their 'basic package' to all the networks' subscribers.

After digitization, consumers are likely to 'turn off' channels they don't wish to see, to cut their monthly bills. However, this will also affect the position of cable networks, as they won't have the ability to ensure that a particular channel will be delivered to all its subscribers.

If all consumers switch to the 'a la carte' system and away from the bouquet system, carriage fees will become meaningless.

According to TRAI rules, consumers can pick any channel that they want to see and cable operators will have to oblige. The only condition is that cable operators can demand that the minimum monthly bill for the customer has to be Rs 150. In other words, even if all the channels that you have subscribed to (including pay channels) cost only Rs 140, you will still have to pay Rs 150 per month.

To keep consumers interested in the 'bouquet system', Hathway has unveiled four new bouquet packs. The first pack is the mandatory TRAI pack of 100 free to air channels for Rs 100 per month (choice of channels up to the consumer).

The second bouquet is Basic Pay Tier Package, 176 channels for Rs. 160 + Taxes.

The second bouquet is 233 TV channels for only Rs. 220 + Taxes, the third bouquet is 258 channels for Rs. 275 per month + Taxes

In addition, it will also have an India Cricket package with an additional cost of Rs. 365 per year + Taxes.

Source: Cable operators try to save revenue after digitization | Real Time News, India

 

[iS THAT ME]

RE: Cable TV Vs DTH : War in the Digitization Era

Sounds great...at least better than any of the DTH packages...

 

[tech_genie]

RE: Cable TV Vs DTH : War in the Digitization Era

Price war begins with Dish TV, offers basic channels for free

Signalling an imminent price war in the direct-to-home (DTH) industry, Dish TV, the largest DTH services provider in India, today announced that it will offer 70 channels in the basic tier free to its subscribers in the four metros. With just three weeks left for the switch-over from analogue to digital in the four metros, more such offers from DTH players are expected as they fight in a fiercely competitive space.

Under Dish TV's offer, the customers will be eligible to receive a basic channel tier comprising of 70 channels free of cost for life. Interestingly, for the multi system operators (MSOs), the Telecom Regulatory Authority of India (Trai) has recommended Rs 100 for basic tier per month to their subscribers.

Viewers availing Dish TV's offer will have to remain active by subscribing to a regular package at least twice during a year, the company said.
RC Venkateish, Chief Executive Officer of Dish TV said, “This is a never before kind of unique facility for all those valued subscribers who will choose our services during digitisation. This is a highly differentiated and extremely consumer friendly move. Consumers in the four metros are apprehensive about this sudden switch off of their highly valued TV viewing. This will translate into huge competitive advantage for Dish TV as none of the other competitors both from cable as well as DTH offer this facility, moreover as stated above Cable operators have already announced a Rs 100 monthly charge for Basic tier, which will be provided free of cost by Dish TV.”

Adding further, Dish TV COO Salil Kapoor said, “For the subscribers ‘switch off’ of the services or their TV going blank suddenly cuts of their information and entertainment lifeline. Dish TV is now ensuring that this lifeline never gets cuts of for their valued subscribers. Our endeavour of never ending commitment to our consumers to provide highly differentiated competitive advantage over cable and other DTH making us the platform of choice.”

The move, if copied by other players, may affect the already low ARPU (average revenue per user) levels of the DTH industry, experts believe. However, industry pundits also add that if DTH win over cable in the first phase, they have a huge upside of sheer volume, which will eventually more than compensate for such offers.

Source: Price war begins with Dish TV, offers basic channels for free

 

[tech_genie]

Broadcaster, MSOs negotiate for distribution revenues

With barely a month left for digitisation to kick in, broadcaster and MSOs are engaged in hectic negotiations over distribution revenues. Sajeet Manghat and Ashmit Kumar of CNBC-TV18, report that initial indications suggest MSOs are at a price disadvantage to DTH operators and deals with broadcasters are proving difficult to clinch.

The October 31st deadline for digitisation is approaching fast and MSOs are busy finalising and unveiling their basic tier packages. But the going is tough and the digitisation drive may see these MSOs getting the short end of the stick, when it comes to pricing.

For some, basic tier pricing is almost at a 20 percent premium to that of DTH operators. That's because MSOs have to pay entertainment tax of Rs 25 per subscriber in Delhi, and Rs 45 per subscriber in Mumbai, in addition to service tax. Whereas, for DTH operators, these taxes are worked into the pricing.

While the numbers of cable channels are similar to DTH, cable operators can ramp up the bouquet, based on agreements signed with channels. However, some broadcasters are yet to sign deals with the four major MSOs -- Hathway, Den, Digicable and Siticable.

For example, Media Pro, comprising Star and Zee excluding Sports is yet to sign with Digicable. Star Sports Group is yet to sign with Digi Cable and Siti Cable. TenSports and Ten Cricket are yet to sign with Hathway, Digicable & Siticable.

IndiaCast, comprising the TV18 channels, Viacom & ETV, is yet to sign with Den Networks. Sony's One Alliance is yet to sign with Siti Cable. ABP News is yet to sign with Hathway and Den. TV Today Network is yet to sign with Hathway, DEN and Siticable and the Sun Group is yet to sign with any of the major cable networks.

Of the 6.84 million cable subscribers going digitisation in phase 1, MSOs have been able to digitise only 4.67 million subscribers, that 68% of the total cable subscribers. Including DTH subscribers in the four Metros digitisation has reached 77% of the total subscriber base of 8.26 million. Mumbai has achieved 95 percent digitization, Kolkata 67 percent, Delhi 53 percent and Chennai 49 percent.

Alarmingly for Chennai, not a single set top box has been added in Chennai in the last three months.

 

[Bapun]

Revenues will be high after full digitisation in India..

 

[tech_genie]

Picture perfect



To watch digital TV you need no longer look to direct-to-home (DTH) service providers such as Tata Sky, Dish TV, Airtel, Reliance and others. Your local cable TV operator will be able to bring you the sharp pictures that you’ve longed to see for so many years.

Indeed, the digitisation of cable television is likely to translate into a bonanza for consumers. Since cable operators will now be in direct competition with DTH service providers, the former will have to improve their quality of service, offer hundreds of channels more and come up with competitive subscriber package pricing as well.

Though DTH has been growing rapidly since it was introduced in India about six years ago, even today the number of DTH subscribers is nowhere near that of cable TV. The total number of DTH subscribers in the country is expected to touch about 40 million this year, while the cable subscriber base is at a huge 94 million. Back in 2006, there were only around 1 million DTH subscribers, which means there has been an increase of 6.5 million subscribers per year. On the other hand, cable has only added 26 million subscribers since 2006, or just over 4.3 million annually.

Clearly, DTH has scored over cable TV with its superior picture quality and customer-friendly service. As Milan Sheth, a partner of Ernst and Young India’s technology practice arm, says, “DTH rose because it offered a unique user-oriented experience.”

Even so, many people continued with cable television as switching to DTH involved investing in a set top box and a dish, which was a costlier option. But now with cable TV coming on a par with DTH, bad customer service could potentially drive subscribers away from cable and into the arms of DTH, says Sheth.

Of course, the biggest and most basic advantage of digitising cable TV is that subscribers will be able to get sharp, crystal clear pictures on their television screens, says K.K. Binani, secretary of the Cable TV Equipment Traders and Manufacturers Association. “Cable’s picture quality was inferior because it was analog. This move makes it [digital quality] universal,” Binani points out.

Once they go digital, cable television will also be able to offer such services as video-on-demand and the facility to record your favourite programmes — so long the exclusive preserve of DTH.

Another major benefit to consumers will be the massive increase in the number of channels that cable television will be able to offer now. “Currently we have about 90 channels,” says Viswa Adhikari, proprietor of Star Vision Cable Link, a Calcutta-based cable TV operator. “But with digitisation, we will be able to provide our customers with around 400 channels — maybe more.” Technically, you can get 1,000 channels on digitised cable, adds Binani, although India has only about 700 channels in total.

Once digitisation takes place, cable will actually score over DTH on some fronts. “Unlike DTH companies, cable service providers don’t have to pay for licence space. This means we can send out more data, and hence more channels,” says Binani. The other big advantage, he points out, is that cable would continue to be able to regionalise content. “If there is a predominantly Bengali area in Delhi, for example, cable operators will be able to provide Bengali programming and packages for it — something that DTH cannot do,” he says.

The most exciting development could be the arrival of Internet broadband on digital cable service. You will no longer need to get a separate Internet connection for your computer, since your cable connection would include that.

Of course, things are not going to change overnight. The logistics of upgrading and digitising India’s massive cable TV network is a huge and complicated one. However, Sujit Das, managing director of AMBC Pvt. Ltd, a multi-service operator (MSO) in Calcutta, is confident that the process of digitisation will go smoothly. “The government is rolling this out in phases. Phase one, which is the June 30 date, will be only in the metros. Phase two will be in tier-II cities such as Pune, and Hyderabad, which are expected to go digital by December 31 this year. The upgradation process will be completed for the entire country by 2014.”

A major challenge, as far as cable TV operators are concerned, could be the shortage of digital set top boxes (STBs), most of which are imported from China, Korea and Japan, and the cost of digital hardware. There could be a supply bottleneck, predicts Das. “We need 94 million STBs by 2014. And there’s the cost of import duty as well.”

There is no clarity either on who will bear the cost of laying the optic fibre cables, setting up the new hardware, and so on. “Will the consumers be expected to pay for this, or will the MSOs and cable operators have to shoulder the burden,” he asks.

Again, neither the MSOs nor the cable operators are sure what customers will have to pay for watching digital television. Insiders reveal that the Telecom Regulatory Authority of India is still working out the pricing for the new services. “Right now, we charge Rs 150 for a basic channel package,” says Kajal Mitra, who runs Sky Vision, a cable television provider in Calcutta. “For Rs 500 or thereabouts, we will provide more channels, though the pricing hasn’t been fixed yet. We will certainly not charge more than DTH, though. We are now in direct competition with them.”

 

[tech_genie]

MSO at a price disadvantage over DTH

MSO at a price disadvantage over DTH

With digitization deadline round the corner it has been known that the broadcaster and MSOs are engaged in hectic negotiations over distribution revenues as per the report in moneycontrol.com.

The report highlights that the MSOs are at a price disadvantage to DTH operators as MSOs are getting the short end of the stick, when it comes to pricing.

The reason being MSO’s have to pay entertainment tax of Rs 25 per subscriber in Delhi, and Rs 45 per subscriber in Mumbai, in addition to service tax. Whereas, for DTH operators, these taxes are worked into the pricing and basic tier pricing of MSO is almost at a 20 percent premium to that of DTH operators.

While the numbers of cable channels are similar to DTH, cable operators can ramp up the bouquet, based on agreements signed with channels. However, some broadcasters are yet to sign deals with the four major MSOs -- Hathway, Den, Digicable and Siticable.

Of the 6.84 million cable subscribers going digitization in phase 1, MSOs have been able to digitize only 4.67 million subscribers, that 68% of the total cable subscribers. Including DTH subscribers in the four Metros digitization has reached 77% of the total subscriber base of 8.26 million. Mumbai has achieved 95 percent digitization, Kolkata 67 percent, Delhi 53 percent and Chennai 49 percent.