In 80s, India had just one television channel, i.e. Doordarshan, which used to be the only source of news and entertainment. Even this channel did not cover enough households. Contrast this with the present scenario. As of March 2013, India had more than 400 news and current affairs channels and 438 entertainment channels (I&B Ministry).
Size Of TV Industry
According to the FICCI-KPMG’s Indian Media and Entertainment Industry Report 2014′, the number of TV households in India increased to 161 million in 2013, implying a TV penetration of 60 per cent. The number of Cable & Satellite (C&S) subscribers also increased to 139 million in 2013, which is 9 million higher than the previous year.
FICCI-KPMG Report has predicted that by 2018, 95% of TV households will have Cable & Satellite connection. The C&S subscriber base is expected to grow to 181 million by 2018, of this, paid C&S base is expected to be 171 million in 2013, representing 90 per cent of TV households.
Regulatory Measures
In 2013, lot of regulatory measures were taken to monitor the Indian broadcast industry. Some of them were listed by the FICCI-KPMG report are:
- Process of digitisation was ushered in by the TRAI; everyone in the TV ecosystem is expected to comply with TRAI norms
- Process of Digital cable set top boxes (STBs) was rolled out in Phase I and II cities
- Broadcasters were also asked to implement 12 minute ad caps
Content Production
- Low entry barrier and highly creative nature of the industry are keeping the content production industry fragmented,
- Production costs are moving upward, inflation is not the only culprit, escalation in the cost can also be linked to improvement in production quality
- Increased competition has also led to higher investments in production quality
- Content providers will have more opportunities thanks to the process of digitisation; digitisation will also help improve content quality; there will be more localised content and niche channels as well
- Content producers are recognising the need for owning intellectual property (IP) rights for content so as to be able to monetise it better. IP rights also provide a barrier to entry in an extremely fragmented industry with several small players
Broadcasting
- Indian broadcasting industry was crippled by the combination of factors including declining advertising revenue, weak operating environment and TRAI’s 12 minute ad cap regulations
- Hindi and Regional General Entertainment Channels (GEC) remained the favourite bet for advertisers in 2013; a large chunk of advertising money flew to GECs, considered to be safer bets in an environment of slow advertising growth
- The long-term outlook for TV advertising remains positive and advertising revenues are expected to grow at a 13 per cent CAGR from 2013-18
- Subscription revenues increased in 2013, partly due to higher subscription revenues from Phase I & II cities and partly due to better negotiation through consolidated channel aggregators
- The industry will experience the real benefits of digitisation in 2014 and 2015 ; in coming years, subscription revenue will go up and carriage fees will come down
- TAM’s increased coverage of LC1 markets has resulted in some of the carriage savings being redirected to increase reach in LC1 markets
Distribution
- Rollout of STBs in Phase I and Phase II cities is complete; however some cities like Chennai, Coimbatore and Hyderabad are lagging behind. Deployment of STBs in Phase II cities was smoother than that in Phase I cities on account of learnings from Phase I experience.
- Customer verification process is going in Phase II cities
- When it comes to wean away analogue subscribers, DTH players performance was less than satisfactory, however DTH companies performed strongly on ARPU (Average revenue Per User)
