Is DTH feeling the heat?

Direct to home (DTH) operators are probably feeling the heat at the top end from Netflix and Amazon Prime Video, and cable operators at the bottom


Pressure on DTH firms may be driving them to start offering hybrid set-top boxes  to their customers. Photo: Indranil Bhoumik/Mint
Pressure on DTH firms may be driving them to start offering hybrid set-top boxes to their customers. Photo: Indranil Bhoumik/Mint

For the last few months, a close friend has been toying with the idea of surrendering his direct-to-home (DTH) television connection. He hasn’t been switching on his DTH set-top box, he says, and finds himself increasingly consuming entertainment content online—especially on video-streaming sites Amazon Prime and Netflix. He is a crime genre fan.

Another acquaintance—who is always griping about lack of content on his DTH platform—has been contemplating buying an Internet TV to watch online videos from the various over-the-top (OTT) video-streaming sites now available in the country. He has not spoken about giving up DTH as yet, but is clearly gravitating towards online content consumption.

Of course both these viewers represent the affluent consumer who lives in the metro. But are they indicative of an audience that is increasingly amenable to shunning appointment viewing and turning to online content? Does this mean that DTH—which relays TV channels directly to consumer homes with the help of a satellite dish—is under pressure?

Media industry experts feel that DTH is probably feeling the heat both at the top end and at the bottom. At the top end, OTT may be affecting its popularity as consumers choose to binge-watch their favourite TV shows or originals on video platforms. The viewing experience on these services has been facilitated and enhanced by the penetration of smart devices including smartphones and improved broadband speeds.

At the lower end, there’s DD Free Dish that is giving private DTH operators a run for their money. DD Free Dish is the free DTH service of Doordarshan that is gaining popularity in small towns and villages as more and more TV channels go free-to-air.

For now, DTH consumers cannot pull content at will nor can they consume it on the go. Earlier this week, Star India’s OTT platform Hotstar published a full-page advertisement in leading newspapers claiming: “This VIVO IPL, urban India has switched from large screens to Hotstar”, further emphasizing the popularity of video streaming. Hotstar owns the digital rights to the Indian Premier League T20 cricket tournament.

Interestingly, the latest Ficci-KPMG report (2017) on media and entertainment says that “urban consumers have been early adopters of video, especially in the age group 15-34, which constitutes 70-75% of the total Internet base. With on-demand accessibility, aggressively priced high-speed 4G data services, and a latent demand for differentiated content, OTT video-on-demand (VoD) services have seen an upsurge in the last one year”.

The same report cites Uday Sodhi, executive vice-president and head (digital business) at Sony Pictures Networks India Pvt. Ltd, as saying that an ever-evolving device-led Internet ecosystem, higher data speeds available to consumers and the positive impact of demonetisation on digital payments are going to be key growth drivers of the OTT VoD segment in the near future. Sony Pictures Networks India runs Sony LIV, a video-streaming platform.

To be sure, such pressure on DTH firms may be driving them to start offering hybrid set-top boxes to their customers. The new connected boxes will eliminate the need to buy Internet TVs or other streaming devices as the set-top box will offer both linear programming as well as on-demand video such as Netflix and Amazon Prime.

Airtel Digital TV, the DTH arm of Bharti Airtel Ltd, launched one such box on Wednesday which brings online content as well as a bouquet of satellite channels to your TV.

Cable TV company Den Networks Ltd is also looking at introducing a similar connected box, says its chief executive S.N. Sharma. In fact the company—which has 13 million subscribers—also launched an OTT platform Den TV a month ago. Sharma says they thought it fit to launch Den TV as the audience’s consumption pattern is changing. “There’s need for entertainment when you are on the move. You watch content on the mobile, in the car,” he says. Currently, the service is complimentary to Den Network customers and offers 130 live channels, more than 2,500 films and 10,000 hours of programming.

Sharma does not feel that cable TV is under immediate threat from OTT as several cable TV companies are also offering broadband connections. “Our broadband subscriber requirements are growing. If earlier they downloaded 20GB data a month, it’s gone up to 60GB now,” he says. Growth in DTH, meanwhile, has lost some of its steam. But according to Jawahar Goel, chairman and managing director at DTH firm Dish TV India Ltd, that is on account of demonetization, which affected rural areas where the service is popular. The rural economy shrank because of demonetization and TV viewers moved to DD Free Dish, he says.

Currently, DD Free Dish has 22 million subscribers, according to estimates by television viewership measurement agency Broadcast Audience Research Council (Barc) India. The platform offers 80 channels including private Hindi entertainment channels like Star Utsav, Sony Pal, Zee Anmol, Viacom18’s Rishtey and Rishtey Cineplex as well as news channels like Aaj Tak, ABP News and News 24. Of course content on some of these channels is old and lags behind what is shown on their pay TV channels. But the rural consumer is not complaining as DD plans to add 24 new channels this year, taking the total count to 104.

Goel partly agrees that small devices like laptops and phones do pose a challenge as media is being consumed on them, “but unlike them, DTH does not face any bandwidth issues. Also you must remember that while some firms may have made data free for a while, ultimately rates will harden. And it will be costlier to watch a one-hour video or a film online than say on DTH. DTH has no such cost. So the pressures on DTH are temporary, not permanent.”

As rural electrification progresses, DTH will be popular among villages which have neither cable TV nor Internet today, argues Goel. “Yes, people are watching Netflix and Amazon but that is additional. They are not abandoning DTH or giving up linear TV yet,” he says.

Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.

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