According to a study done by Goldman Sachs and Kotak Securities, Star could be the major gainer in direct-to-home (DTH) services in the country. According to the study, the driving force would be sports channels like ESPN and STAR Sports.
The study also points out that a channel could choose to be exclusively on the DTH platform and ignore the cable route, if revenue were sufficiently attractive.
The survey has estimated that STAR Sports and ESPN could easily receive Rs 25 per subscriber per month each from premium subscribers given their dominance over cricket rights till 2005 year end.
According to the study, by putting channels like STAR Sports and ESPN exclusively to DTH would translate into revenue of Rs 300 crore per annum, which is higher than the current turnover of Rs 150 crore and advertisement revenue of Rs 100 crore.
The Study also points out that cable and DTH can co-exist in India and the country has a huge population and large area.
According to the study, it will not be cost effective for modern, upgrade cable systems to pass all homes, the direct-to-home services may find its existence very easy.
The study also points out that since beyond a certain number of subscribers, floating costs, rather than fixed costs, become paramount for both cable and DTH operators, both will coexist.