Q&A: R C Venkateish, CEO, Dish TV

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3 Nov 2010
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R C Venkateish is chuffed. It has been just a year since he took over as CEO of the Rs 1,437-crore Dish TV. And it has become the world’s third-largest DTH player with 10.9 million subscribers, just behind the US-based DirecTV (19.4 million) and Dish Network (14.19 million). It still remains the only profitable DTH player in India. Vanita Kohli-Khandekar spoke to Venkateish about the the structure of the DTH business and what Dish is up to. Edited excerpts:

What next at Dish?
The industry, so far, has been controlled by local monopolies. Nowhere in India do you have a choice of cable operators. They don’t have the wherewithal to invest in boxes (and, therefore, digitisation). Multi-system operators or MSOs (signal distributors) cover a very small area. Therefore, there is a barrier to digitise. What Dish TV has done is to pioneer digital access for consumers. So, the first phase was about creating the market. The second phase (now) is to introduce new technology such as high definition (HD). The third will be 3D.

The Indian DTH market is overcrowded; six players, hyper competition and low average revenue per user (ARPU). Do you see consolidation coming?
Nowhere in the world does non-exclusivity of content exist. All platforms don’t have access to the same content, so DTH is profitable. In the US, for example, if there is 100 hours of content made, 60 may be taken by A, 30 by B and another 10 by a third player. Therefore, there can’t be more than two-three players. That makes the market profitable. Here the same content is available to everybody (it is mandatory for broadcasters to offer the same content to all platforms). So, you have six players with low ARPU (average revenues per user) and long break-evens.

What do you reckon will help ARPU go up from the current Rs 150-200 a month?
The market was so far dominated by cable operators. In the good old days, they actually paid to get a channel. Now MSOs charge a carriage fee and give a portion of it to cable operators. Therefore, the business model of the MSO is carriage. The LCO (local cable operator) gets money from the MSO, so he keeps prices low. At some time in the next two-three years DTH will become 50 per cent of the market (DTH accounts for roughly 35 million of India’s 134 million TV homes). That is when pricing power will shift to us.

Can’t value-added-services (VAS) such as movie-on-demand help?
VAS has been much talked about, but you have to look at it in the current Indian mindset where the consumer struggles to give Rs 100. Also pay-per-view is not movies-on-demand. It is near-movie-on-demand. It isn’t as if there are thousands of movies available on tap – this is about a few films at fixed times. Then there are other VAS services such as astrology, cooking, etc. Rs 5 here or Rs 10 there is not going to be a game changer. HD will be the game changer. It can break the price myth. For example, ARPU on HD for 40 channels is Rs 550 while regular ARPU is Rs 150.
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