DTH Industry

Distribution platform for multichannel TV programs by using a satellite system which transmits signals directly to subscriber premises. Simplified Working of DTH :
Broadcaster sends signals Satellite receives signals Dish Antenna of consumer receives signals Set Top Box Decodes signals and sends them to TV

DTH in India Rs.3000 Crore Industry

Doordarshan - the only TV channel - owned and

operated by the Government of India - TV set had its own antenna to capture the signals Cable Television Ordinance Law passed in 1995 - Enabled cable operators to feed channels; later private companies started airing their own channel This led to the explosive growth in no. of TV channels and no. of cable operators (1,00,000 cable operators), consequently dip in quality of service

Advent of DTH
Shortcomings of Cable operators
Strikes Increase in Tariff plan Selective Broadcast Poor Service

Arrived as immediate threat to the high-end cable Networks, with major players like DishTV by Zee group, TataSky joint venture of Tata & Star TV, Big TV

Global Scenario

Source: http://www.strategyr.com/DTH_Satellite_TV_Services_Market_Report.aspx

Market Penetration

Structure of Indian DTH Industry

DTH Market Share in India

8 13 2 30 Dish TV Sun DTH Tata Sky 25 Big TV

22

Airtel
D2H

Source: Business Standard News Paper Monday 9th November 2009 page no.2

Herfindahl Index
Measure of the size of firms in relationship to the industry

Defined as the sum of the squares of the market shares of 50 largest firms within the industry The higher the HHI Index the more oligopolistic is the industry. For the Indian DTH industry, H=2246
n

H = s i2
i=1

Substitutes
Good which is to some extent interchangeable with another good DTH is a new entrant, faces direct and stiff competition from various service providers: Terrestrial Television
a public service broadcaster nominated by the Government of India one of the largest broadcasting organizations in the world enjoyed the monopoly for some time

Substitutes Contd.
Cable TV Operators
a huge demand of cable TV operators poses a serious threat and stiff competition to DTH Industry

Conditional Access System(CAS)

provide the subscriber the choice channel he/she wishes to view very much similar to DTH

Substitutes Contd.
IPTV
service is delivered using the Internet Protocol far superior than any other alternative

OnLine TV
offers users to watch TV programs online with increased penetration of broadband connection, it can pose significant challenge to DTH

Cartel
Formal (explicit) agreement among firms Members may agree on such matters like
Price fixing Total industry output Market shares Allocation of customers Allocation of territories Bid rigging, establishment of common sales agencies The division of profits or combination of these

Complement Goods

Changes in substitutes and complements over time

Changes in Doordarshan, DD Direct+
Changes in DD Direct+

Changes in CAS
Changes in IPTV

Changes in Online TV
Changes in Complement

Entry Barriers in DTH industry

High Initial Setup & Operational Cost
DTH is a low margin and high volume industry Non-Price Competition: Content differentiation

Multicultural & Multilingual Geography

Long gestation and break even period

Recent entries in the industry

Big TV from ADAG(Anil Dhirubhai Ambani Group) Sun DTH by promoers of SUN TV Digital TV from Bharati telemedia D2H from Videocon

Short story of

BIG TV, achieved the 1 million subscriber mark, within 90 days of its launch. Captured the share of 15 per cent in just 3 months in the fast-evolving Indian DTH sector. It has become the 3 rd largest player in very short time and is positioned to challenge DishTV and TataSky. BIG TV poses very serious challenge to DishTV & Sky TV.

How about launching a new DTH venture?