Mumbai: India is set to become the top pay television market in Asia-Pacific by 2015, but excessive regulation could hamstring growth and commoditise the industry, research firm Media Partners Asia (MPA) said in a report.
Indian pay TV revenue from advertising and subscription grew 17% in 2006 to $4.2 billion (Rs17,597 crore) and is likely to more than double to $10 billion by 2011, further rising to $16 billion by 2015, MPA said. India had 71 million television homes in 2006, of which 61% had pay television, MPA said. As per the forecast, penetration will rise in 2015 to nearly 90% of an estimated 185 million television homes.
With those totals, the direct-to-home (DTH) satellite market would grow from about 2.6 million subscribers in 2006 to 38 million by 2015, MPA estimated. India, currently the world’s third-largest pay TV market, has a population of more than 1 billion.
MPA said regulation in India was becoming “intrusive”, especially in revenue-sharing deals, retail and wholesale rates, as well as programme exclusivity and distribution.
“This has potentially damaged consequences for pay TV content and distribution, which could become heavily commoditised in the long term,” MPA executive director Vivek Couto said.
Profit margins of top broadcasters, including News Corp.’s Star India, Zee Entertainment Enterprises Ltd., Sony Entertainment TV and Sun TV would be under pressure from competition and higher operating costs.
Greater digitisation of distribution would stem piracy and under-declaration of subscriber numbers by cable operators, and also encourage consolidation of operators and distributors. “In the short to medium term, private equity and financial investors could fund cable consolidation, though current valuations for (distributors) are inflated,” Couto said.
Potential investors include CVC Asia, Singapore state investor Temasek, Carlyle Group, Macquarie Media Group and ChrysCapital and Providence Equity Partners, the MPA report said.