Digital Television Outlook
The rate at which digital television – primarily DTH, followed by Digital Cable (CAS) – is growing, replays the same excitement of the late 90s when Analog Cable TV was scoring over Terrestrial.
Most of 2010, we had been hearing the number ‘one million per month’ of Digital TV connections led largely by DTH. At this rate, it’s not difficult to imagine a situation in which Digital TV becomes half of the Cable-&-Satellite (C&S) Universe in 20 to 24 months – some time in 2012-13.
There are several interesting threads that are bound to change as the market moves into 50-50 share between Analog and Digital TV. Some of the developments that will leave this market changed forever are in the areas of distribution and content:
Part A) Future of Distribution
Box Features: The set-top-box (STB) is changing rapidly with a host of companies (largely European, American, South Asian) working at a furious pace with faster chipsets, larger memory and enhanced software to dramatically increase features of the box and improve user experience. This is bound to see the newer boxes have fantastic visually appealing interfaces, better games, hundreds of apps. The return path that’s needed for the boxes to become transaction enabled, however does not seem to be a reality in the Indian market with the exception of a handful of players working to bring in that technology. If this had been the case, we would have also seen everything from train ticket booking to pizza orders via the STB.
Recorders: Already launched, this device promises to introduce the kind of viewing ease and flexibility that viewers are going to absolutely love. If the viewer doesn’t need to follow the airing or telecast timings, she is set free. With the ability to fast-forward or skip advertising spots, this is not the most popular gadget from the standpoint of media planners and advertisers. Funnily, for advertisers, it’s perhaps just as dreaded a contraption, as was the TV remote control in the 90s.
Hybrid Boxes: The Hybrid boxes, wherein you can seamlessly watch videos from conventional Live TV channels, play games with friends, surf the web, as well as watch streaming videos from the Internet are the next technology leap that will change TV consumption in the elite segments. These boxes will have a return path and will bring back hugely valuable information back on what the viewers are doing on the STB. With two DTH players already testing this for their STBs, the entire On-Demand suite of offerings could become a reality. Devices like Google-TV, Apple-TV or Smart-TVs (TV sets that have a web connection) might eventually end up shorting the operator in delivering content and services. If movies, music, news could be just streamed into your TV sets, would you still need the operator? Interestingly, there are a host of local players who are also testing similar models to launch in a space getting known more as OTT (Over-The-Top devices).
VAS: Value Added Services are bound to increase with the rapid emergence of newer STBs and the OTT devices. The VAS offerings will be led by video, audio (music) and games initially. Eventually they will touch utilities, information and education, but that time frame would be dependent on pace of technology and its adoption by operators to create a ‘marketplace’. Needless to say that content companies will see a host of ways emerge to reach to consumers.
Carriage Fees: This is going to be an interesting scenario. If bandwidth with TV operators increases, would carriage fees disappear? Or maybe come down? Will the increase in bandwidth match up to the increase in number of channels? If it doesn’t, then the current logjam relating to bandwidth demand outstripping supply continues.
Part B) Future of Content
The emergence of digital television has provided content owners, broadcasters and operators with newer dilemmas. High Definition, Video-On-Demand, To-Stream-Or-Not-To-Stream (Web, Mobile, YouTube), Technology Investments – are just some of them.
High Definition: Content is all set to get stunningly clear and visually attractive with the new standard in broadcasting – HD. While STAR has announced Star Plus serials to move to HD, there is word on an HD telecast for key cricket tournaments, including IPL. Other general entertainment channels will have to follow suit sooner than later.
Fragmentation at an Individual Level: We have all heard of Viewer Fragmentation at the universe level – the phenomenon of a set of viewers scattering over more and more channels. Have you heard of fragmentation at an individual viewer level? And that too at a mad, crazy scale? Read on…
Five years ago, when the prevailing standard of TV distribution was still only Analog Cable, the average number of channels per viewer that would explain 80 per centof viewing was pegged at 6 to 8 channels. Today, with digital invading the landscape, the number of channels in those homes has tripled. What has also happened is that Bollywood, music and GEC re-runs have become accessible to more and more channels who play it irrespective of their original niche space. This has led to fragmentation at an individual viewer level wherein, according to a latest TAM report, that same viewer who would watch 6-8 channels 80 per cent of the time, now views 50+ channels. Mind-boggling and scary!
Content Search: When TV meets the Web, search assumes criticality. How will viewers search for millions of episodes across thousands of shows from hundreds of channels is a question that’s inspired a lot of innovations from our firm (What’s-On-India). The good news is that with better devices, greater memory and faster chipsets, search will become easier and sexier. I will rein in my temptation to spill the beans in this area given our ongoing work in partnership with major operators.
The next two years are going to be fairly challenging as leadership in this industry would be tested for the calls and bets that organisations would be forced to take. Plus these calls need to be taken in reference to effective monetisation routes for each of the investments. Did I just hear some groans about the ‘good old days’?
(Atul Phadnis, Chief Executive, What’s-On-India, the country’s first and only consumer TV guidance company. The company has 2 verticals – the first being What’s-ON-India channel, which is already in 25 million homes across DTH and Cable. The second vertical is an industry wide EPG system that connects up with 450 channels and 20 million set-top-boxes.)