DTH Industry

Introduction
With the Indian economy booming at a GDP growth rate of 8.7%, there is sense of growth prevailing everywhere.
The average Indians disposable income and purchasing power has risen to never before levels. The Indian
Entertainment & Media industry is also not far behind. It is currently estimated at a worth of Rs. 450 billion with a
CAGR of 18% over next 5 years. Terms which were alien to Indians like DTH, Digital Cable, and IPTV are
suddenly finding presence of country’s journals.

India would overtake Japan as Asia’s largest DTH by next year and be Asia’s leading cable market by 2010 and the
most-profitable Pay-TV market by 2015. This growth presents a lot of interesting scenarios.

With the 'CAS' issue not yet resolved, there's 'DTH' coming up to muddle things up for
you and me.

Doordarshan will launch its Direct-To-Home telecast from April 1. Broadcasters like
Star and Zee are pushing hard for DTH services in India too.

So what is this DTH all about? How, if at all, does it help the customer? Is it good? Let's
show some detail for DTH service.

What is DTH?

DTH stands for Direct-To-Home television. DTH is defined as the reception of satellite programmes with a personal dish in an
individual home.

DTH does away with the need for the local cable operator and puts the broadcaster directly in touch with the consumer. Only
cable operators can receive satellite programmes and they then distribute them to individual homes.

How does DTH work?

DTH network consists of a broadcasting centre, satellites, encoders, multiplexers,

modulators and DTH receivers.

DTH service provider has to lease Ku-band transponders from the satellite. The encoder
converts the audio, video and data signals into the digital format and the multiplexer mixes
these signals. At the user end, there will be a small dish antenna and set-top boxes to decode and view numerous channels.
On the user's end, receiving dishes can be as small as 45 cm in diameter.

DTH is an encrypted transmission that travels to the consumer directly through a satellite. DTH transmission is received
directly by the consumer at his end through the small dish antenna. A set-top box, unlike the regular cable connection,
decodes the encrypted transmission.

Tata Sky uplinks channels to its satellite that transmits

digital signals directly to a minidish fixed on the
subscriber's balcony, terrace or outside the window. The
minidish relays the signals to Digicomp that decrypts
and relays them to the television. A large building with
multiple inhabitants can use a single minidish with
individual digicomp at each home.

TATA SKY
Introduction

Tata Sky
Type Joint venture between Tata Group (80% stake) and STAR
TV (20% stake)
Profile

Founded 2004

Headquarters Kirloskar Business Park, Bangalore,  India Tata

Sky is
Industry DTH Pay TV a DTH
Products Direct broadcast satellite

Slogan Isko laga daala, toh life jingalala

Website www.TataSky.com
satellite television provider in India. It is a joint venture between the Tata Group, that owns 80% and STAR TV that owns a 20%
stake.

Tata Sky was incorporated in 2004 but 'Tata Sky was launched' in 8 th August, 2006. It currently offers close to 110 channels and
some interactive ones.

Its current tagline is "Isko laga daala, toh life jingalala!”

The company uses the Sky brand owned by BSkyB. The Sky brand, owned by the UK-based British Sky Broadcasting
Group, has more than 20 years of experience in satellite broadcasting, and is well known for its innovative products
and services. With this service, Tata Sky has joined a select international group of DTH businesses that operate in
areas as far away as the UK and Italy in Europe, and Mexico and Brazil in Latin America.

What is Tata Sky?

Imagine a world where a roar in Corbett National Park can be heard in pristine CD quality sound. A flower blossoming can be
appreciated in digital detail. And a sunset in Hawaii viewed in all the 84,612 shades of orange.

A world where the mere push of a button gives you courtside seats at the Wimbledon or balcony seats to the latest blockbuster
movie.

Imagine a world where audio CDs will be outdated, and DVD libraries, frankly, unnecessary.

In this world, wires will be redundant and handheld gaming consoles a thing of the past. Information will travel through space,
and the mighty remote will give you access to your personal choice of channels.

This is the future. This is DTH from TATA and STAR. The next wave of technology that will revolutionize home entertainment in
India. This is Tata Sky.

Vision
Tata Sky plans to launch its DTH service with top-of-the-line infrastructure and revolutionize Indian entertainment through its
superior DVD quality picture and CD quality sound. The service envisions to:

Connect every television home

Empower every television viewer

Revolutionize home entertainment

Area of business

Tata Sky offers viewers a variety of popular channels in categories ranging from entertainment, sports, movies and
music to news and documentaries in DVD-quality picture and CD-quality sound. The service further aims to empower
television viewers with choice, control and convenience through a wide range of programming and interactive
features, thus becoming a one-stop shop for all the television entertainment needs of customers.

With state-of-the-art digital infrastructure and partners that include global leaders in digital technology, Tata Sky
provides for hardware installation at subscribers' homes, as well as after-sales service through an extensive customer
service network that provides complete customer care. Tata Sky also retails its hardware and prepaid recharge
vouchers through popular consumer electronic stores to facilitate consumer access.

COMPETITORS
IPTV is service where television signals are digitally sent over Telecommunications line. MTNL & BSNL
plan to tap this line. Even with strict regulations (not yet enforced) it is a considerable threat due to its new
level of interactivity.

Threat of New Entrants- Low

With 7 players in the DTH space, threat of new entrants is relatively low due to enough competition. Getting
a license is relatively low but issues related to pricing of CPE and getting required transponders. Also first
mover advantage exists in this industry.

Competitive Rivalry- Medium

With 7 players established in the market inter firm rivalry is intense.

DD offers free service but has a very small bouquet of channels. Dish TV got first movers advantage and has
a highest market share in the market. The new players have very big brand names and have started with
extensive publicity. There is also competition with respect to acquiring content. There are also regional
discrepancies.

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My product is tata sky 3d hd receiver

Delivering 3D experience to the living room

The TATA SKY 3D MPEG-4 AVC HD Contribution Encoder provides a natural platform for 3D contribution links, ensuring full
control of encoding parameters, exact synchronization and time-stamping of the compressed frames and the generation of a fully
packaged 3D simulcast.

TATA SKY RX8200 Receiver: new technology for these receivers ensures that the exact temporal and spatial relationship
between left and right feeds is also maintained at the receive end, avoiding possibly severe reductions in early 3D customer
experience.

TATA SKY HD encoder: for today's DTH delivery, it is paramount that 3D deployments using frame-compatible methods use the
best available compression technology to maximize the consumer 3D experience. This encoder provides the MPEG-4 AVC HD
compression, using new in-house technology designed to enable conversion to an all-HD world

 World-first solution delivers 3D movie-theater experience to the living room   

 Soaring demand for 3D TVs - revenues set to hit USD 60 billion in five years
 Complete solution for delivering 3D from venue to viewer at home

HOW 3D TECNOLOGY WORKS

 9. Value Added Services are gaining steam.

Threats

1. IPTV provides superior technology if implemented

2. Cable Set top Boxes provide easy switching due to negligible switching costs

3. Increasing Competition internally

4. Dependency on CPE suppliers to some extent

5. High dependence for transponders on ISRO

6. Dependency on broadcasters for their channel content and thus increase in cost

7. Videocon may enter DTH by building its own set top boxes.

8. No Exclusivity in Content and Rule of ‘Must Carry’

9. Cap on Investment (20%)

10. Interoperability Regulations

11. Cap on foreign Investment (49%)

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Strategy - Product Matrix

TATA Sky’s target customers include various strata of the society, with different service packages available
to each one. To improve its performance in the competitive DTH market, TATA Sky management should
assess its brand positioning among its target segment by establishing a distinctive image for the company
compared to competing companies.

But these initiatives presents challenges, which TATA Sky is currently facing squeezed by rising costs,
sporadic nature of demand, and relentless downward pricing pressure due to competition. Adding to it,
slackening of demand, and higher interest rates are not welcome signs for it. With this in mind, TATA Sky
should try to be rapid-paced and highly competitive. To counter these challenges and still be profitable, we
have tried to suggest various strategies based on what will suit demands in the Indian market and its
consumer behaviour to increase TATA Sky market share.

Current situation:

 Tata Sky crossed the two million connections mark in a period of 20 months, thus retaining its
position as the fastest growing direct-to-home service provider across the globe.

 The marketing budget that TATA Sky begun with was 15% of sales. This included around 5% for
advertisements, 7% discounts and promotions and 1% sponsorships.

 Currently TATA Sky has roped in Aamir Khan as its brand ambassador. Aamir Khan would feature
in all TATA Sky brand and product communication, including advertisements in TV, print and radio.

 Further, tie ups with ITC E-Choupal and Godrej Aadhar give it wider rural reach. Also for its
distribution, TATA Sky has a tie up with ITC International Business Division.

 The 24X7 guru.com has joined hands with TATA Sky to provide content for Active Learning.

 Tata Sky has adopted a 360 degree marketing campaign approach that encapsulates television,
print, outdoor and radio along with on-ground activities and marketing on the digital platform.

 Tata Sky plans tie-ups with Sony Pictures, Fox for content- Pay per View service for exclusive
events.

Target:

Tata Sky hopes to have about eight million connections by 2012.

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Product
Tata Sky launches itself as a DTH services requiring a Dish, A set top box and network access card per
television. Later variant like Community dish for entire building were launched. Latest the Tata Sky Plus
with Personal Video Recording technology has been launched.
Various services provided by TATA Sky include:
 Active Services
Active Cooking
Active Stories
Active Newsroom
Active Darshan
Active WizKids
Active Sports
Active Learning
Active Games
Active Astrology
 Parental Control
 Search and Scan Banner
 Guide (including Hindi Display)
 Customer Service- 24 x 7 help. Support in 11 languages
Considering a survey result, based on consumers preferences:

Program Choices Reception Price

New Technology Technical Support Customer Services

50

40

30

20

10

0
1 2 3 4 5 6

Factors Affecting Consumer buying Behaviours:

1. Price: Tata Sky has offered competitive pricing but has been on the higher end and its due to
promotional campaigns it has added in incentives leading to increase in customer base. In search of
newer audiences in smaller towns, DTH operator Tata Sky is introducing a new Rs 99 package —
Super Hit Pack

2. Customer Services: Tata sky offers an excellent website and dedicated customer line. They have the
concept of registered mobile number providing easy communication. But their Customer service
lines are always busy and the waiting period is usually very long. This may be an irritant for existing
customers.
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 3. Reception: The reception is usually excellent in comparison to existing cable TV. But during
monsoons and Cloudy days they are affected. The rate of signal distortion is more for Community
dishes in comparison to Individual dishes. This technical problem should be sorted.

4. Program Choices: After litigations, Tata sky is able to offer huge bouquet of channels but it is still
less compared to the Cable TV. They should ensure extensive program choices to induce switching
from Cable to DTH

5. New Technology: Tata sky Plus is an initiative in this direction. Various services under Active are
part of this Technology game. Being a interactive and dynamic offering would increase its appeal.

6. Technical Support: Technical support system of Tata sky is well establishes. If a 24 hrs limit can be
provided for all complaints and work on ‘holidays’ when people are generally home could be sold as
a USP.

Tata Sky as a product has evolved from the time to inception. Further to enhance the product, new
services and technologies can be imbibed like:
1. Common Dish per house for Multiple Television sets
2. Combined Product with Television - Rural Areas , especially and Niche Segment Targeting if
Combined with LCDs

3. Connectivity with other digital Monitors like Laptops for Commercial Usage

4. Guide can be displayed in Multiple Regional Languages

5. Voice over in Multiple Languages (Currently limited availability in for some programs)

6. Interactive Video Games (with consol)

7. Inclusion of Radio Reception. Development of Visual Radio service.

8. Variety in Movie Listing with Bollywood, Hollywood and Regional Channels

9. Special channels for Songs Request like Jukebox could be launched

10. Stock Market related interactive service on Active

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Price
Competition has increased may fold with completion providing freebies and slashing prices. The following
price related strategies could be adopted, which may lead to a short term loss but a medium term break even
and profit:

1. Free Set Top: Following the line of Dish TV, Set top Boxes can be given free while ensuring lock in
by providing base pack free for limited time duration, thus inducing update to next level.

2. Lock in of 1 year: Ensure long term lock ins by providing incentives for pre payment of long term
charges. Continue with current strategy of providing 2 months free on payment of 10 months
services.

3. Multiple Connections: Provide discounts for consumers buying second Tata Sky Connection (up to
50% off)

4. Encourage References: Provide discounts on Monthly charges if reference from existing consumer
becomes a new customer.

5. Regional Disparity: Provide free regional packs in local areas to ensure switch from Cable TV to
DTH service, i.e. provide free south Jumbo pack for customers in all Southern States.

6. Community Dish: Provide Incentives in the form of Free Months charges for first 3-6 months and
reduce the Installation charges per flat.

7. Payment Options: Allow multiple points of payment, ensuring timely payment and convenience to
the customer – Credit Card through Website (implemented), Pre Paid cards from Retail shops to be
activated using Telephone (Implemeneted) and Drop Boxes at Societies.

8. Postpaid: Some clients depending upon few background check criteria can be given Billing service
i.e. Payment at end of Month

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Place
State Share (%)
Maharashtra 12.1
Gujrat 10.5
Karnataka 7.2
Uttar Pradesh 6.9
Tamil Nadu 6.6
Punjab 6.4
Orissa 5.3
West Bengal 4.7
Kerala 4.6
Andhra Pradesh 4.6
Rajasthan 4.5
Assam 4.0
Madhya Pradesh 3.8
Others 18.8
Total 100

Clearly, there is a lot of scope of increase in the number of customers across all the states. Looking at the
current distribution system that Tata Sky has adopted:

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Including the local cable operators as distributors would be an extremely useful way of reaching out
to the target market:

a. Staff of cable operators be made the distributors for Tata Sky (familiarity with people)

b. All distributors be given a status of Tata Sky employees

c. Attractive options be given to them to become distributors

Another focus could be the rural market. A snapshot of the rural market:

a. 199 million total household in India

b. 119 million (60% of total house holds) TV households

c. 50 million are having Cable

d. 55 million TV sets in rural area

e. Rural TV households growing by 3-4 million each year.

f. Only 2-3 % of rural household have access to Cable

g. Growing focus towards more satellite channels

Strategies for the rural sector can be:

a. Customizing offering

b. Combination of various national channels with regional channels

c. Educational Package

d. Appointing the village head as Distributor and the promoter as the villagers tend to listen to
village head

e. This can be supplemented by giving the connection to village head free for initial period

Another avenue that can be explored is Mini – Theatres (Class B towns)

a. Setting up Mini – Theatres in rural sector to promote the Product

b. Events like Cricket matches, movies etc.

c. These Mini – Theatres can be the Point of Sales for Tata Sky

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The promotional strategies suggested are:

Promotion

1. Packages for Special Events like the cricket World Cup

2. Targeting Tata employees could be a useful way pr promoting the product

3. Give the option of instalments and other promotional schemes to the new users

4. Tie up with real estate developers to target the new constructions

a. The number of old buildings being demolished and being reconstructed are also on the rise.
This could be a major target for promotions

5. Door to door marketing should be used to heighten the awareness levels as well

6. Local Games Sponsorships can also be used to increase the awareness levels

7. Another way could be using the prominent part of the Building for placing Hoardings of Tata Sky
Ads

a. Finding the strategic building in the locality

b. Consideration can be in form of cash payment to the Housing society

c. Providing free connections to Households in these buildings

8. Another new avenue that can be explored is the railway stations:

a. Posters on railway station roofs

b. Tickers at Major suburban Railway stations

9. Use of Internet- Applications which involve sharing of videos on how one consumes TV, benefits of
DTH over cable TV, etc. across social networking sites like Orkut, ibibo, etc.

10. 'Ek-pe-Teen and Do-pe-Paanch' the offer entails three months of free subscription on the purchase
of one connection, and five months of free subscription on purchase of two or more connections.

11. Tata Sky launched an interactive game quiz featured around MS Dhoni to coincide with the
Twenty20 World Cup. In the past, the DTH operator has been test-piloting feature by running
several contests around programmes and the interactive features were made available to its
customers