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The Big Leap Beckons

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DQI Bureau
New Update

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.

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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.

Year 2006...

  • DTH: Rs 157.4 crore

  • Pay per view services: Rs 111.4 crore

  • Video on Demand: Rs 11.6 crore

  • Basic Cable Services:

    Rs 5,544 crore

Triggers...

  • Liberalization of the information and broadcasting segment

  • Private sector participation in the DTH services market

  • Increase in bandwidth availability

  • Stringent controls to check piracy

  • Increase in monthly subscription rates

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.

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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.

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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

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