The Big Leap Beckons

While not many Indians are aware of broadband and what it can offer, the
likeliness towards the broadband concept in the country is as high as 75%.
Similarly, 32% subscribers of cable TV in the country can be potential adopters
of TV services in future. On the pay per view services and video-on-demand (VoD)
front, two out of ten Indian households are willing to subscribe to these
services. These are the findings of IDC India’s recent survey on the TV
services market in the country.

So what would be the impact of such a huge demand in future? Explains Vibhas
Amawate, assistant manager–Internet, convergence and communication, IDC India,
‘‘The idiot box as is all set to shed its image and become active if not
smart.’’ What he means is that with the advent of innovative technologies,
TV is moving towards becoming more interactive and a good revenue source for not
only broadcasting companies but also for a host of other industries–from
content creation to advertising agencies and cable operators to satellite
service providers. According to Amawate, TV services such as interactive TV (iTV),
VoD and TV commerce (t-commerce) would be the major trigger for TV’s rise as
an important source of active entertainment and revenues in developed countries.

IDC predicts that the market for VoD, direct to home (DTH) services and basic
services would be approximately Rs 60,000 million by 2006. There is a rider
though. Says Amawate, ‘‘The projections are based on the presumption that
the government does not backs out from its policy of opening the DTH services
market to private sector and provided the bandwidth situation in India improves
with time.’’ There are other triggers too.

According to experts, the information and broadcasting minister Sushma Swaraj’s
recent announcement about government’s intentions of making it mandatory for
all cable TV service providers to install set top boxes at the customer’s
premises has further fuelled activity in this space. These regulations would
make the competition fierce.

While the IDC report ‘Outlook for TV Services in India’ agrees that the
TV services market in the country is in a nascent stage, the report predicts
that the DTH services revenues would increase from a base of Rs11.8 crore in
2002 to Rs 157.4 crore by 2006. The primary driver to this, according to the
report, definitely has to be policies that would encourage advent of players and
also a competition amongst them. According to the report, the pay per view
services are expected to increase from Rs 5.8 crore in 2002 to Rs 111.4 crore by
2006, the primary drivers for this being stringent government-backed controls to
check piracy and increase in the monthly cable subscription rates. And while the
research agency predicts that the VOD services would increase from a base of Rs
60 million in 2002 to Rs 11.6 crore by 2006, it expects the basic services
revenue to touch Rs 5,544 crore during the same period.

The IDC report suggest, that the service providers should initially build a
niche and then consolidate their operations through a mix of new service
offerings. However, it cautions that service providers would have to make
conscious efforts in developing and segmenting the market before they can
actually think of consolidating the niche. Also, the service providers need to
monitor very closely the paradigm shifts in the consumer behavior to be able to
take advantage of the same.

And while the transitional revenue models is expected to see the advent of
services like VOD, iTV and Walled Gardens (an iTV application where users can
access Web-like content formatted for the TV screen by the service provider),
the futuristic revenue models would see the advent of t-commerce.

The success factors, experts suggest, would be the company’s ability to
move first in this market space. Besides, creation and delivery of compelling
content proposition, forming a right kind of consortia and upgradation to
digital format of broadcasting would also hold the key.

SHUBHENDU PARTH In New Delhi