X L R I

D T H A CASE STUDY
By DEBDATTA MUKHERJEE (PGCRM 2) SID RR 09013 SMD ID - 104497

Centre : Jamshedpur

CHALLENGES BEFORE DISH TV

I. CHALLENGES BEFORE DISH TV WHEN IT PIONEERED THE MARKET

Building up distribution network from the base zero. Uncertainty as to whether the distribution system would actually pay off and yield the desired result since it was the pioneer in the field and in the market .

The success of distribution thru dealers was questionable as the dealers were used to selling low cost telecom products like handsets as compared to Set Top Boxes (STB) whose price was high.
When the distribution channels would start operating , they would keep other brands as well to offer choices to the willing customers ,thereby throwing competition before Dish TV from other brands , that are offered by the dealers . Acceptance of its output across various pockets backgrounds and segments of society , spread over various geographical territories having dissimilar, activities and composition. It was not merely selling a Set Top Box , but greater challenge lay in acquisition of and retaining a CUSTOMER . Competence of Channel management , closely monitoring the movements of customers in the markets and taking necessary and adequate steps to ensure that they only buy its Set Top Boxes.

PERFORMANCE OF TATA SKY

II.PERFORMANCE OF TATA SKY
Launch : Launched on 15th August 2006.

Market Share : Of the 120 million TV homes in India at present, 80 million are

cable &satellite homes (C & S) , and 14 million avail of DTH. Out of these, Tata Sky has sold 2.3 million connections , and presently occupying the third position in this industry.

Key Performance Strategies:

Tata Sky has adopted interactive service as its key proposition and recently roped in film celebrity Amir Khan as its brand ambassador . To stand apart from other players, Tata Sky has decided to invest more in interactive services particularly, as Indian broadcasting regulation does not allow exclusivity of content. It has about 10 interactive services including : Active Wizkids About 1500 schools across the country have been persuaded to adopt Active Wizkids as part of their teaching, and children spend about 66 minutes on weekdays and 78 minutes on weekends on this interactive learning aid. Active Stories Another interactive learning aid for children and students.

PERFORMANCE OF TATA SKY contd.(2)

Active Matrimony It provides a platform for match selection and further negotiations, which, if positive, culminates into marriage. It has also tied up with Bharat matrimony.com to provide a matrimonial channel to the users.

Active Star News - It brings new across the world to its viewers.
Showcase It is a system of movie rentals on pay per view basis . However, movie on demand service has not been very successful and has not been able to generate great revenues for the company. On the movie front, to change the perception of watching pirated movies on cable with half of the screen covered by advertisement ,Tata Sky has focussed on and working hard on two aspects : Approaching the producer to release the movie simultaneously on Tata Sky alongwith its normal release, thereby minimising the possibility of piracy , and To apprise and educate the customers of the pleasure of an ad-free movie experience.

PERFORMANCE OF TATA SKY contd.(3)

Pricing : To increase its market share , Tata Sky, with the second highest number of subscribers , has dropped the prices of its Set Top Boxes by 50% and lowered the subscription fees by 20% , with plans to reduce even further. Investments : Tata Sky DTH service has invested Rs. 2000 crores to acquire 20 lakh customers, and another 2000 crore investment is on its way. Product Launch : Towards mid October08, Tata Sky has launched a new service Tata Sky + with a premium Set Top Box which gives the power to pause , record and rewind live TV, the ads for which have been endorsed by Amir Khan . Future Prospect : Tata Sky hopes to have 8 million connections by 2012.

ENTRY OF AIRTEL & BIG TV

III. CHANGE IN MARKET DYNAMICS WITH ENTRY OF AIRTEL & BIG TV.

AIRTEL :
Airtels DTH services from Bharti, were launched in early October08. It has a distribution network of close to a million outlets. In pricing sphere , it has come up with two pricing points One, keeping in tune with current market prices & The other , a superior offering . It has also hired a galaxy of celebrities to endorse its product(s). Airtel , with a subscriber base of 75 million , has very ambitious plans of capturing a significant market share in the near future and make its foray in the market .

ENTRY OF AIRTEL & BIG TVcontd(2)

BIG TV :
Big TV from Reliance Communications , has focussed on marketing in various forms Within first three weeks of its launch , Big TV : Took 15000 spots on television , 20,000 spots on Radio and over 600 screens in cinema halls. Taken up advertising on Internet through sites like Yahoo , Rediff & Google Taken up several thousand hoardings , 80,000 retail signage and digital screen inside malls. Created special experience zones at over 2000 Reliance branded outlets. Targeted campaigns to cover 5 crore Reliance mobile customers 5 million Reliance Energy customers 4 million ADAG shareholders, and 2 million Reliance PCO partners. Taken up retailing through a lakh outlets across the country . Big TV aims to capture 40% market share in next 12 months .

ENTRY OF AIRTEL & BIG TVcontd(3)

Thus with strong entrants like Airtel & Big TV , equipped with their respective powerful tools, they would emerge as market leaders in the industry in times to come , surpassing confidently all other players and contenders in the market.

FACTORS HELPING THE NEW ENTRANTS :

DISTRIBUTION NETWORK
Big TV and Airtel are telecom players and have a well laid out distribution network in place by virtue of their telecom business .

TECHNOLOGY
Both Airtel & Big TV are MPE4 ready. MPE4 format helps in better compression and not only superior reproduction of image and audio output , but also more number of channels can be squeezed out of a limited number of transponders .

OTHERS
Among other parameters like content , reach , pricing etc, which determine the position of a player in the market , Airtel & Big TV have an edge over other players in all these spheres , particularly Airtel , which is coming in a big way . Thus , they are the biggest contenders for market leaders in the near future.

CHALLENGES BEFORE TATA SKY AND DISH TV

IV. CHALLENGES BEFORE DISH TV & TATA SKY IN THE CONTEXT OF MPEG2 VS MPEG4 FORMAT
Most of the DTH players import their Set Top Box. Both Dish TV & Tata Sky have MPEG2 format. MPEG2 Set Top Box costs Rs.1568/- to Rs.2450/- to import. However, almost all players sell their Set Top Box below their cost price . In contrast to MPEG2 format, Airtel & Big TV are MPEG4 ready. MPEG4 format helps in better compression and superior reproduction of image and audio output . MPEG4 is a compression technology that not only helps in squeezing out more channels on a limited number of transponders but also enables high definition content to be viewed. In view of improved technology of MPEG4 Set Top Boxes as against MPEG2 , Dish TV & Tata Sky have been thrown open to the following challenges :

UPGRADATION OF TECHNOLOGY
It is imperative that Dish TV & Tata Sky upgrade their technology from MPEG2 to MPEG4 and thus remain in competition alongwith new players who are armed with superior technology .

CHALLENGES BEFORE TATA SKY AND DISH TV contd.(2)

INVESTMENT REQUIRED FOR UPGRADATION
Both Dish TV & Tata Sky have to invest huge amount in switching over to MPEG4 technology. While doing so , it has two options : a) It can either dispose off MPEG2 Set Top Boxes and replace them with MPEG4 STBs b) It can upgrade the existing MPEG2 Set Top Boxes with MPEG4 technology. The relative expenditure involved in both the cases have to be carefully looked into before taking a decision.

CUSTOMER RETENTION AND CUSTOMER ACQUISITION

Unless Dish TV & Tata Sky switches over to MPEG4 technology on a war footing basis, it is quite likely that with Big TVs entry into the market and launching of Bhartis Airtel DTH, customers of Dish TV & Tata Sky would switch over to Airtel or Big TV DTH , because customers these days no longer go by brands alone but also look for value for money. Therefore , it is essential for Dish TV and Tata Sky that after technology upgradation , they not only have to ensure that their existing customer base is retained intact but also acquire new customers who may , given a chance , would turn to other players.

CHALLENGES BEFORE TATA SKY AND DISH TV contd.(3)

PRICING FACTOR
In spite of huge investments on upgradation , Dish TV and Tata Sky have to keep their subscription rates very competitive , preferably on the lower side , and come up with attractive pricing packages so as to lure new customers and prevent the existing customers from switching loyalty to other brands.

BREAKING EVEN
Breaking even in this industry is a tough game . Now with technology upgradation and low pricing , it becomes all the more tougher for Dish TV and Tata Sky to break even and the period required to break even under new situation and scenario becomes even more longer.

EXPANSION ACTVITIES OF SUN DIRECT

V. ACTIVITIES REQUIRED BY SUN DIRECT FOR EXPANSION
Sun Direct was launched in the beginning of 2008 in four southern states of India , viz. Tamilnadu , Kerala, Karnataka, Andhra Pradesh and Pondicherry as it only had south Indian language channels numbering to 110. In order to expand to other regions , it should take up the following activities :

CONVERSION OF EXISTING CABLE CUSTOMERS

Sun Direct should target to convert its existing cable TV network Arasus customers to its DTH customers.

PRICE REVISION
Although it offers the most competitive price package with subscription at Rs. 75/a month , which is equal or even lower than cable operators charges, it should raise its charges reasonably and justifiably so as to include add ons such as Hindi package , Kids package , and English movie packages to have a wider network of customers.

EXPANSION ACTVITIES OF SUN DIRECT

contd. (2)
LAY EMPHASIS ON HINDI PACKAGES By inclusion of Hindi Packages , it can reach out to Hindi speaking markets and thus expand its customer base to all over India instead of confining only to South India . CHANGES IN TECHNOLOGY Technological improvements and innovations , which are key factors for expansion , should be thoroughly examined , evaluated and adopted because in fact , technology is the primary factor for a customer to experience anything . MODIFICATION IN PACKAGE DEAL The present package of Rs.1999/- for installation plus one years free subscription can be modified to a justifiably higher rate with a two years free subscription , which would, no doubt , not only attract new customers , but would also invite switchovers form other brands.

EXPANSION ACTVITIES OF SUN DIRECT

contd. (3)
IMAGE MAKEOVER In order to overcome being tagged as a regional channel , it should lay stress on its brand building exercise by taking celebrities of other regions apart from south India , to endorse its products and thus present a national look instead of a regional appearance . COUNTRYWIDE LAUNCH Sun Directs plan to go pan India soon should be implemented and executed as early as possible.

KEY ISSUES FOR FUTURE SUCCESS

VI. KEY ISSUES IN THIS INDUSTRY FOR FUTURE SUCCESS Distribution network Technological Development Price Package Value added service (VAS) Marketing campaigns , advertisements & promotions Govt. Regulation making Conditional Access System (CAS) mandatory , leaving the customer to choose between Free to Air (FTA) or CAS or DTH.

With DTH dishing out a greater and better fare , this would be the obvious choice of customers , thus paving the way for this industry to grow faster .

KEY ISSUES FOR FUTURE SUCCESS contd.(2)

Interoperability of Set Top Boxes duly certified by Bureau of Indian Standards, whereby a single Set Top Box would provide access to the service of any service provider with technical changes in the box. Brand image building by players. Contents offered and no. of channels available to a customer for viewing . Setting up of call centres for customer service . Breaking language barriers to make foray into regional markets which was hitherto dominated by regional players .