INDUSTRY ANALYSIS ON DIRECT TO HOME(DTH)

Department of Business AdministrationUniversity of Lucknow

Submitted to:Dr. J.K Sharma Presented by:

Mithun Garg(Marketing)

Introduction

The history of Indian television dates back to the launch of doordarshan, India’s national TV network in 1959.

Channel Doordarshan was owned and operated by government of India.

In those era every home which had a TV set used to have its own antenna to capture the signals.

The 9th Asian games which were held in 1982 in the country’s capital New Delhi heralded the mark of color TV broadcasting in India.

List of players in the industry

Doordarshan – (DD-Direct +) of Prasar Bharati.

Dish TV of ZEE group. Tata Sky joined venture between Tata and

Rupert Murdoch’s Sky TV. Sun direct of Sun Network. BIG TV of Reliance Anil Dhirubhai Ambani

group. Airtel digital TV of Bharati telemedia. Videocon d2h of Videocon industries.

Indian DTH Industry

The structure of the DTH industry in India can be categorized as an “Oligopoly”.

An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists).

Key characteristics of “Oligopoly” are following : Few larger supplier dominates the market Interdependence between firms Each firm produces branded products Significant entry barriers into the market in the long

run which allows firms to make supernormal profits. Each oligopolist is aware of the actions of the others.

Growth of industry

The revenue of Indian Direct-To-Home (DTH) market is expected to be more than $ 5 billion by 2020, as mandatory cable TV digitization would help the DTH players expand their subscriber base.

The active DTH subscriber base is estimated to grow from 32.4 million in 2012 to 63.8 million by 2017 and 76.6 million by 2020.

Porter’s five forces model

Porter’s five forces model

Threat from substitutes: Cable TV operators Internet protocol television(IPTV)/Online TV Terrestrial transmission

Bargaining power of suppliers:The bargaining power of India DTH operators with CPE(customer premise equipment) suppliers have been steadily increasing.

Threat of new entrants: Initial setup cost is high which again acts as a barrier

to entry. Their already exist well settled DTH service providers.

Porter’s five forces model

Bargaining power of buyers: Due to intensified competition installation prices are

declining, subscribers now have a wide range of options.

Customers will continue to have a high bargaining power until DTH platforms try to differentiate them as superior players with better content and clarity.

Rivalry among existing firms: With seven operational players the inter firm rivalry Is

quite high. The competition from state owned DD-Direct to

private players is negligible as the number of channels offered by DD-Direct is very limited.

SWOT AnalysisStrength: Increased high definition services Declining content acquisition cost Rural penetration

Weakness: Capital intensive industry Skilled labor Satellite technology Signals Viewer migration

SWOT AnalysisOpportunity: Increasing number of TV households Mandatory cable TV digitization in some cities Increasing disposable income 

Threat: Development of technology may turn DTH services

obsolete Competition from other TV distribution players Slowdown in economic growth Set top box shortage Climate Radio Cinema halls New entrants

DTH Comparison at a Glance

Rank

Total Customers

Total customer Market Share %

Active Customers

Active Customer Market Share %

% of Active Customers

Growth Rate

Average Revenue Per User

1 Dish TV(13.4mn)

Dish TV (28%)

Dish TV (6.9mn)

Dish TV (23%)

Airtel DTH (72.5%)

Airtel DTH Tata Sky

2 Tata Sky (9.2mn)

Tata Sky (19%)

Airtel DTH (5.8mn)

Airtel DTH (19%)

Videocon D2H (69%)

Videocon D2H

Airtel DTH

3 Airtel DTH (8.0mn) 

Airtel DTH (18%)

Tata Sky (5.7mn)

Tata Sky (19%)

Sun Direct (64.5%)

Sun Direct Videocon D2H

4 Sun Direct (7.6mn)

Sun Direct (16%)

Sun Direct (4.9mn)

Sun Direct (18%)

Tata Sky (62%)

Dish TV Dish TV

5 Videocon D2H(6.1mn)

Videocon D2H (13%)

Videocon D2H (4.2mn)

Videocon D2H (14%)

Reliance Digital TV (52%)

Tata Sky Reliance Digital TV

6 Reliance Digital TV(4.4mn)

Reliance Digital TV (9%)

Reliance Digital TV (2.3mn)

Reliance Digital TV (8%)

Dish TV (51.5%)

Reliance Digital TV

Sun Direct

Critical success factors of DTH industry

Content Regulation Pricing and consumerism Advertising Strategy Technology

Conclusion

The DTH market in India is growing at a fast pace and the number of active subscribers in the country is also increasing.

The Government is providing ample support to the DTH sector in the country, and this has encouraged newer players to enter the market.

However, with the stiff level of competition from the existing multi-channel cable network and upcoming technologies including IPTV, players need to be consistently innovative.