Growth in ad revenues expected for HD channels to go up by 20% in 2015. Just as the potential for ad revenues is huge for broadcasters in terms of advertising, the potential in terms of subscription revenues is also massive. For TV broadcasters ARPUs for HD is 3x more than the SD subscribers, while for DTH and MSO players it is 1.5-2x more than SD subscribers.
HD subscribers account for 4 million of the DTH subscribers in India (approximately 10%) according to FICCI-KPMG report. Tata Sky leads the pack among other DTH players with approximately 2.5 million HD subscribers till date and having a 25-30% HD subscriber base. They are followed by other DTH players such as Dish TV, Airtel DTH and Videocon d2h. Although some of these DTH companies did not wish to disclose their HD subscriber base it can be seen that their subscriber base is a share of remaining 1.5 million HD DTH subscribers. On the other hand, the HD subscriber base among MSOs is roughly 2.9 million of the digital cable subscribers. Some of the top players among them include Hathway, Den Network and InDigital. This brings the total of HD subscribers in India to an approximate figure of 7 million subscribers. With HD channel package rates ranging from Rs.125-150 per month, the HD subscription revenues could be approximately in the range of Rs.1,000-1,300 crore currently. As HD subscriptions have seen a 15-20% growth during the previous year we can expect this to increase phenomenally.
The potential for broadcasters is immense especially since there is a push from DTH players for consumers to adopt HD. Many DTH providers are now offering only HD set-top-boxes to customers for faster HD adoption. Similarly, on the TV set manufacturers’ side, the number of HD TV sets has increased in production as well as consumption. In 2014 about 8 million units were expected to be sold out of which approximately 55 per cent was expected to have been HD panel TV sales, says FICCI-KPMG report.
The number of HD channels has also grown during the span of five years. What started off with one channel (Movies Now) in 2010 has now grown to 40 HD channels. Star India has 9 HD channels plus 3 HD channels of its alliance partner which include NGC, Nat Geo Wild and Fox. Viacom18 and Zee TV have 3 HD channels each, while MSM has 4 HD channels. Times Network has two HD channels, while Sun Network has 4 channels. Turner has 3 channels and four independent HD channels.
Though HD channels for genres such as Hindi GECs and Hindi Movies exist, smaller niche channels have also done quite successfully too in the HD space. According to recent data sourced from TAM subscribers on HD, Star Plus HD was in the lead with 1.9 million GVTs followed by Colors HD with 1.6 million GVTs, Zee TV HD with 1.2 million GVTs and Life OK HD with 1.0 million GVTs. It was followed by Hindi movie channels such as Zee Cinema and Star Gold. Sports channels Ten Sport and Star Sports HD1 followed next with music channel MTunes with 47,311 GVTs coming in before Sony PIX HD with 23,674 GVTs.
However, in terms of revenues, niche channels are not that far behind to the other mainline GEC channels on the HD front. Mainline GEC channels such as Hindi GECs, Hindi movies and regional channels in HD feeds have together got an estimated revenue of Rs.190 crore according to recent data gathered by a media research agency on the top 10 HD channels by revenue. Niche channels are not far behind with an estimated Rs.162 crore in revenues. Star Plus HD gains the highest in terms of revenue with an estimated revenue of Rs.70 crore. Sports channel Star Sports HD has done remarkably well and is at second spot with an estimated Rs.69 crore. MTunes, which was one of the first channels to start in HD, in terms of revenue is estimated to be at Rs.50 crore. Zee TV HD is in fact at No.4 with an estimated revenue Rs.35 crore, followed by Colors HD with an estimated revenue of Rs.28 crore. Other niche segment HD channels such Star Movies (Rs.27 crore), Sun TV (Rs.24 crore), Gemini (Rs.22 crore), Star World (Rs.16 crore) and Star Gold (Rs.11 crore) follow. This shows the vast potential for niche segment channels in the HD feeds front. The revenue strength of niche channels in HD may owe it to the fact of their niche target audience that they cater to and also the fact that they are a premium audience. The report also says that niche segments such as the sports genre commands a premium for HD feeds. This can be seen in the separate feed for Star Sports HD that had created during the World Cup. As the audiences for HD are those who are ready to pay for good content and with tastes for content apart from the masses the niche segment channels do have an opportunity here to benefit more than general entertainment channels. They might even be able to match up or go even higher in terms of revenues from the HD feeds which is far from possible in SD feeds.
There is a huge revenue base from advertising on HD channels that we had seen previously and is expected to increase by around 20% during this year and we can expect more niche channels to join the fray. Though many of the niche channels may be doing well because of the fewer number of channels in the HD space and many of them not having separate sales for HD feeds, the question remains whether niche channels will able to maintain their supremacy in the HD space when most channels turn the HD way.