India Pay-TV and OTT Video Market Analysis

 The pay-TV market environment in India is a swirling maze of economic, political, legal and social factors that are critical to business models and financial success. Also, due to overlapping government jurisdiction, a slow-down in the implementation of reforms is commonly observed. For instance, the digitization mandate (a 4-phase process that aims at converting all analog subscribers in India to digital), when passed in 2012, had severe opposition from various political and regional parties, and state governments alike. The start date for the digitization process was postponed twice before it actually began. Even though the mandated timeframe for phases 1 & 2 of digitization is over (March 2013), all analog subscribers in regions covered under these phases have not converted to digital due to various politically triggered factors.

In spite of these factors, this market is set to see extreme growth in several segments, notably STBs and OTT services.

This report presents the latest market developments, trends and forecasts for the pay-TV and over-the-top (OTT) video markets in India. Furthermore, it assesses the impact of key government regulations on each segment. The report also includes comprehensive analyses of the Indian STB market and its growth potential.

Each pay-TV segment is analyzed ‒ cable, satellite/DTH and IPTV in an in-depth manner, including the current market scenario, market trends and challenges for growth through 2017.

The OTT video landscape in India is presented and leading players in the industry are identified. Also discussed are the key drivers and challenges that shape the current and future outlook for OTT (and especially SVoD) in India.

Finally, the report focuses on the STB market in India. The digitization mandate is expected to create a huge demand for STBs in the coming years. The STB market share by type, high-definition (HD) vs. standard-definition (SD) STBs, domestic vs. international shipments and an overall forecast through 2017 is presented.

 Executive Summary  1

Introduction  6

The India Overview ‒ Impact of the Current Political and Business Environment on the Pay-TV Industry  7

The Indian Consumer: 7

The Ongoing Digitization Process (2012 – 2014) 9

Introduction  9

Under-reporting of Subscriber Numbers by Local Cable Operators (LCOs) 9

Discrepancy in Pricing Structure Due to Local Monopolies Enjoyed by LCOs and MSOs 9

Limited Capacity of the Analog System. 10

Impact of Digitization Across the Pay-TV Value Chain  10

Broadcasters 11

Multi-system Operators (MSOs) 11

Local Cable Operators (LCOs) 12

DTH Operators 12

Consumers 12

The Roadmap for Implementing Digitalization with Addressability in Cable TV Systems in India  13

Target Subscriber Base by Phase for Digitization. 13

Estimated Capital Expenditure on Digitization. 14

Phases 1 and 2 of Digitization 2012 – 2013: Conversion Achieved  16

Total Number of Digital TV Subscribers Post Phases 1 and 2. 17

Advantage DTH: 19

Phases 3 and 4 (2013 – 2014): Expectations and Challenges 20

The Post-Digitization Scenario  21

Expected Revenue Sharing Model – Cable TV. 21

Expected increase in the Average Revenue per User (ARPU) – Cable TV. 21

India Pay-TV Market ‒ 2012 through 2017  23

Overview ‒ The India Context 23

The History and Characteristics of Pay-TV in India. 23

TV Households and Pay-TV Subscribers 24

The Pay-TV Market (2012) 24

Cable TV  26

The Subscriber Base 2009 – 2012. 26

Market Share 2012. 28

Key Government Regulations, Trends and Challenges 29

Market Forecast ‒ Cable TV 2013 – 2017. 30

DTH  31

The Subscriber Base 2012. 31

DTH Market Share 2012. 32

Key Government Regulations, Trends and Challenges 34

Market Forecast ‒ DTH 2013 – 2017. 34

IPTV  35

The Current Market Size. 35

Key Government Regulations, Trends and Challenges 35

Market Forecast ‒ IPTV 2013 – 2017. 36

The OTT Video Market 37

The Current OTT Market Scenario in India  37

Market Share ‒ OTT SVoD 2012  38

OTT Market Potential 39

Broadband Subscriptions: 40

Cellular Subscriptions: 40

Households with Computers and Internet Access: 40

Smartphone Users: 40

3G Subscriptions and the expected 4G Roll Out:. 40

Key Trends and Challenges 41

Inefficient Internet Infrastructure: 42

Digital Literacy: 42

Video Piracy: 42

Market Forecast ‒ OTT SVoD 2013 – 2017  43

The Set-top Box Market 44

Set-top Box Market Overview  44

Market Share ‒ Cable, Satellite and IPTV Set-top Boxes 2012. 44

Market Share ‒ Domestic vs. International STB Vendors 2012. 44

Market Share ‒ Key Players 2012. 45

International vs. Domestic Shipments 2012. 46

High-definition (HD) Set-top Box vs. Standard-definition (SD) Set-top Boxes 2012. 47

Market Forecast 48

Set-top Box Installed Base 2013 – 2017. 48

Set-top Box Unit Shipment Forecast 2013 – 2017. 49

Final Thoughts 51

Research Methodology  52