Prabhudas Lilladher, a research based financial services organization in a report said that the pay TV services including cable TV and Direct-to-Home (DTH) will deliver “low single digits” growth in India. The firm in a report on Tuesday said that the “uptick in DD Free Dish” along with the “higher growth in connected TVs” will restrict the growth of pay TV homes across India. Prabhudas Lilladher highlighted that the pay TV homes, since 2012, have been on the rise across the country except for the services registering a dip in 2019.
DD Free Dish Registers Increase in Subscriber Base
In 2019, the firm said that the pay TV services registered lower growth as compared to the previous years due to multiple reasons including the English language viewers shifting to Over-the-Top (OTT) platforms. Prabhudas Lilladher said that the “strong content pie” on the OTT platforms enabled the English language viewers to make the shift from pay TV services. The firm also highlights that the DD Free Dish, the free DTH service from Prasar Bharati also registered an increase in its subscriber base in 2019, contributing to the restrictive growth of pay TV services.
Prabhudas Lilladher said that the DD Free Dish is now estimated to have a subscriber base of 35 million to 38 million with the platform now hosting 104 channels as of 2019.
“Post NTO 1.0, majority of the large broadcasters pulled out their FTA channels from Free Dish as TRAI mandated that FTA and pay channels cannot be part of the same bouquet,” Prabhudas Lilladher said in its report.
The firm highlighted that the broadcasters converted their free-to-air (FTA) channels into pay channels in the price range of Rs 0 to Rs 1 and included them in the bouquets. Prabhudas Lilladher said that the move resulted in the “significant fall” in the reach of these channels with their “ad-revenues plummeted.”
“In contrast, channels which remained on the Free Dish platform like Big Magic and Dangal saw significant rise in viewership and ad-revenues,” Prabhudas Lilladher said in its report. “Thus, all major broadcasters like ZEEL, Sony, Star and TV18 have decided to make a comeback on Free Dish with their 2nd rung GEC’s like Zee Anmol, Zee Anmol Cinema, Star Utsav, Colors Rishtey and Sony Pal.”
Similarly, Prabhudas Lilladher said that the smart connected TVs are now present across 15 million to 20 million homes as of 2019, due to “rising affordability.” The firm said that it estimates the smart connected TVs base to cross 40 million by 2025 in India.
Indian OTT Market “Overcrowded”
Prabhudas Lilladher said that the Indian OTT market is “overcrowded” with over 30 players competing in the segment. The firm said that the OTT market in the country is in “evolution stage” with “most broadcasters” said to be “investing aggressively in building their own platform.” Prabhudas Lilladher said that the OTT segment is witnessing “gradual shift in content consumption habits” with key factors including “cheap data” and increase in mobile subscriber base aiding OTT consumption.
“Rising rural internet penetration is expected to lead to migration in viewing habits from linear TV to digital in the long term,” Prabhudas Lilladher said in its report. “Hence, having an OTT platform with strong content is key to capitalize on this emerging trend.”
The firm said that Zee5, the OTT platform run by Essel Group through its Zee Entertainment Enterprises is “strongly placed in competitive OTT market.”
“ZEEL has been aggressively investing in ZEE5 and expects break-even by FY24E,” Prabhudas Lilladher said in its report. “We believe ZEEL’s strategy to transit to digital medium is a step in the right direction given migration in viewing patterns from linear TV to OTT.”