CTV, FAST expansion puts traditional cable operators on the backfoot

India’s television distribution market is entering a phase where the biggest threat to cable operators may no longer come from traditional DTH rivals or OTT platforms, but from distributors themselves moving onto connected television (CTV) and Free Ad-Supported Streaming Television (FAST).

Dish TV-backed Vzy’s launch of Linear TV Streaming (LTS), with more than 200 live television channels, 29+ OTT platforms and free content on one application, marks a significant escalation. Tata Play and Sun Direct are also exploring CTV propositions, pointing to a broader movement among traditional television distributors towards internet-enabled television.

For broadcasters, the move offers another route to audiences. For distributors, it offers a way to reduce dependence on physical infrastructure and reach households directly over broadband. For cable operators, however, it threatens to turn their core product, linear television, into an internet-delivered service that can bypass the local distribution network.

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From last-mile networks to connected screens

The concern is particularly sharp because CTV platforms can aggregate the same channels traditionally delivered by cable, while adding OTT and free content around them. That potentially weakens the value proposition of the cable connection, especially in urban households that already have broadband and smart TVs.

For decades, cable operators and MSOs have built their businesses around last-mile connectivity. They have invested in fibre networks, headends, set-top boxes, local infrastructure, customer acquisition and service. Their competitive advantage has traditionally been their physical reach into homes.

Once a television is connected to the internet, the consumer can access linear channels through applications without necessarily relying on the traditional cable distribution chain. A platform such as Vzy can place live television, OTT services and free content within the same interface, effectively competing for the same viewing occasion that cable operators have historically controlled.

A senior executive at a multi-system operator, requesting anonymity, said, “This is not simply another delivery platform. If distributors can take the same linear channels to the consumer through an app, the traditional cable network becomes easier to bypass. Cable operators have invested in last-mile networks, set-top boxes, customer service and compliance. The question is whether an app-based distributor will carry comparable obligations.”

Cable operators see regulatory asymmetry

The issue is increasingly becoming a regulatory question as well.

The Telecom Regulatory Authority of India (TRAI) has been examining the regulatory framework for Application-based Linear Television Distribution (ALTD) services, including FAST. Its consultation has brought into focus the difference between traditional television distribution platforms and emerging internet-based services carrying linear channels.

For cable operators, the concern is that traditional distributors operate within a defined regulatory framework while internet-based services can potentially deliver similar television content without carrying the same obligations.

The All India Digital Cable Federation (AIDCF), which represents major digital cable operators, has also taken the dispute to the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) in a case involving Prasar Bharati’s WAVES OTT platform.

AIDCF has challenged Prasar Bharati’s move to onboard linear satellite television channels on WAVES. The federation has argued that the existing uplinking and downlinking framework permits broadcasters to provide channel reception decoders to recognised distribution platform operators, including MSOs, DTH, HITS and IPTV operators, but does not expressly include OTT platforms.

The case has broader implications because WAVES is effectively testing whether linear television can be distributed through an OTT environment outside the traditional distribution architecture.

For cable operators, the concern is that allowing such models without equivalent regulatory obligations could create an uneven playing field.

An industry executive representing a cable network said, “The issue is not whether technology should evolve. The issue is whether two entities performing substantially similar distribution functions should be subject to completely different regulatory frameworks. If an application can distribute linear channels nationally without the infrastructure and obligations imposed on cable operators, the economics of the traditional distribution business will inevitably come under pressure.”

TRAI debate could determine the next phase

TRAI’s examination of ALTD and FAST comes at a critical point for the industry.

The regulator has recognised that internet-delivered linear television is becoming a meaningful part of the television ecosystem and has sought stakeholder views on how these services should be treated.

The consultation also comes as CTV penetration rises and broadcasters, advertisers, agencies and technology companies increasingly look at connected screens as a distinct television environment.

The regulatory question is therefore no longer simply whether FAST should be allowed. The bigger question is whether internet-based linear television should be brought within a framework that recognises its similarities with conventional distribution while accounting for the differences in technology.

For cable operators, the distinction could have significant commercial consequences.

Broadcasters see CTV as another distribution opportunity

Broadcasters, however, have a different incentive.

For them, CTV represents another avenue to distribute content at a time when television audiences are increasingly fragmented across cable, DTH, OTT platforms, smart TVs and other connected devices.

JioStar CEO, Entertainment, Kevin Vaz has said the company sees an opportunity to combine the scale and familiarity of linear television with the convenience of streaming. Sony Pictures Networks India MD and CEO Gaurav Banerjee has similarly highlighted the way audiences move between linear television and streaming depending on content, screen and viewing occasion.

A senior broadcaster executive said, “The audience is already moving across platforms. Broadcasters have to follow that audience. If connected television becomes an important screen, our content needs to be present there. This is about expanding access rather than replacing one distribution partner with another.”

For broadcasters, the economics are also potentially attractive. CTV can create additional viewing environments and advertising opportunities while allowing linear channels to retain their relevance beyond conventional distribution networks.

The participation of JioStar, Sony Pictures Networks India, Warner Bros Discovery India and Zee Entertainment in Vzy’s LTS proposition underlines the importance of content partnerships to the model.

DTH players are becoming aggregators

The strategic shift is significant because traditional DTH operators are no longer positioning themselves solely as satellite distributors.

Vzy’s proposition combines more than 200 live television channels with 29+ OTT platforms and free content. That makes the platform less like a conventional DTH service and more like an entertainment aggregation layer sitting on top of the connected television.

The model potentially gives distributors a new relationship with the consumer.

Instead of simply delivering channels, they can control content discovery, aggregation and potentially advertising. They can also use existing subscriber relationships to push consumers towards internet-based services.

That represents a fundamental change in the role of the distributor.

A cable industry source said, “The biggest concern is that the distributor is moving closer to becoming the platform. Today the distributor delivers the channel. Tomorrow the distributor can decide how the consumer discovers the channel, which OTT service is promoted and where the advertising opportunity sits. That changes the power equation across the industry.”

FAST could intensify pressure on cable

FAST adds another layer to the emerging competition.

Traditionally, FAST has referred to free, ad-supported linear television channels delivered through internet-connected devices. But India's connected-TV ecosystem is increasingly blurring the boundaries between FAST, free-to-air channels, OTT services, linear television and hybrid aggregation models.

The India CTV & FAST Council has been discussing how the definition of FAST may need to evolve as the ecosystem expands.

For cable operators, the growth of FAST could mean that consumers have access to an increasing amount of free television content without paying specifically for a traditional television distribution connection.

That does not necessarily mean an immediate migration away from cable. But it could weaken the perceived need for a conventional pay-TV connection among certain consumer segments, particularly where broadband and smart-TV penetration are high.

The fight is moving from the last mile to the screen

The bigger structural change is that the television distribution battle is moving away from the last mile and towards the screen itself.

In the traditional model, cable operators and DTH companies competed over subscriber acquisition, channel packs, pricing and distribution reach. In the connected-TV environment, the competition expands to include content aggregation, user interface, discovery, applications, advertising and audience data.

This could eventually alter the relationship between broadcasters and distributors.

Broadcasters may increasingly want their channels available across multiple distribution environments, while distributors may seek greater control over how that content is packaged and presented to consumers.

For cable operators, this creates a difficult transition. Their networks remain critical to millions of homes, but the value of the physical distribution layer could come under pressure if the same content can increasingly be delivered through broadband.

Cable operators face a fight beyond DTH

The emerging threat, therefore, is not simply that DTH operators are entering CTV. It is that the traditional distinction between DTH, cable, OTT and FAST is beginning to disappear.

A consumer may watch a broadcaster’s linear channel through cable in the morning, an OTT platform on a smart TV in the evening and a FAST channel later, without necessarily distinguishing between the underlying distribution technologies.

That makes control of the connected television interface increasingly important.

For broadcasters, DTH-led CTV platforms offer another distribution route and an opportunity to reach fragmented audiences. For DTH companies, they offer a way to extend their businesses beyond satellite television. For cable operators, however, the shift could challenge the economic value of the infrastructure on which their businesses have been built.

The outcome of TRAI’s regulatory process and the AIDCF’s TDSAT challenge could therefore become important markers for the next phase of India's television distribution market.

The battle is no longer simply between cable and DTH. It is increasingly about who controls the connected television screen, who owns the consumer relationship and who captures the value created when linear television moves onto the internet.