ST.

STEPHENS COLLEGE UZHAVOOR

A STUDY OF CUSTOMER PERCEPTION TOWARDS DTH SERVICES

Chapter 1 Introduction

INTRODUCTION Growing middle class, media exposure and changing lifestyle of Indian population has put India in global pie as a promising market for a business houses to enter and flourish and DTH is not an exception. Future growth in this industry is largely depended on the players ability to provide customized services which requires a deep understanding of consumer perception and satisfaction for DTH services. The basic objective of the study is to undertake a study of consumer perception of DTH services. CUSTOMER PERCEPTION Customer perception can be defined as A marketing concept that encompasses a customer's impression, awareness and/or consciousness about a company or its offerings. Customer perception is typically affected by advertising, reviews, public relations, social media, personal experiences and other channels In todays globalizing economy competition is getting more and more fierce. That means it becomes more difficult for products and services to differentiate themselves from other offerings than ever before. Not only is the number of competitive offerings rising due to globalization of production, sourcing, logistics and access to information. Many products and services face new competition from substitutes and from completely new offerings or bundles from industry outsiders. Since product differences are closed at an increasing speed and many companies try to win the battle for customers by price reductions, products and services tend to become commodities. Customer behavior becomes more hybrids. On one hand, customers are increasingly price sensitive. On the other hand they enjoy branded and luxury goods. Customer perceptions are influenced by a variety of factors. Besides the actual outcome i.e. did the product or service deliver the expected function and did it fulfill the customers need, the whole process of consumption and all interactions involved are of crucial importance. In todays globalised information driven economy this can also comprise issues like How other customers or influencing groups perceive the product or brand, The degree to which the customer feels the actual marketing campaign addresses the most important issues, Responsiveness and service quality of any affiliates. Customer perceptions are dynamic. First of all, with the developing

relationship between customer and company, his perceptions of the company and its products or services will change. HISTORY OF INDIAN BROADCASTING INDUSTRY The history of Indian Television dates back to the launch of Doordarshan, the countrys national television network in 1959 when the transmission was in black & white. The 9th Asian games which were held in 1982 in the countrys capital New Delhi heralded the mark of color television broadcast in India. In 1991, Indian economy was liberalized from the license raj and major initiatives like inviting FDI, deregulation of domestic businesses emerged. This led to the influx of foreign channels like Star TV and creation of domestic satellite channels like Sun TV and Zee TV. This virtually destroyed the monopoly held by Doordarshan. In 1992, the cable TV industry started which changed the way the average Indian watches the television. Every city in India had a new breed of entrepreneurs called as Local Cable Operators (LCO) taking in charge of distribution. Since this was a disorganized sector carrying new channels on the existing infrastructure required new investments which the operators were reluctant to make. This led to the emergence of a new breed of firms called as Multi System Operators (MSO) who had heavy financial muscles to make capital investments and liaised between the cable operators and the channels. MSOs provide the feed to the local operators for a fee. In 1995, government felt the need of regulation in Cable TV and passed the Cable TV network (Regulation) Act. This was also the time when the state owned Doordarshan and All India Radio came under a new holding called as PrasarBharati to give them enough autonomy. The LCOs reported a lower number of connections where as the broadcasters demanded a higher rate. MSOs were finding it difficult to operate under these conditions. This led to an amendment of the Cable TV networks (Regulation) Act in 2002 to provide Conditional Access System (CAS). With CAS, the last mile distribution could be addressable with accuracy and digitalization of broadcast was also possible. CAS was rolled out in 2003 staring from Chennai and later to parts of Delhi, Mumbai and Kolkata. Later on, the United Front Government had issued a ban on use of ku bandtransmission. After a change of government, the ban got lifted finally in 2001 and TRAI issued the guidelines for operating DTH. Countrys first DTH license was awarded to Dish TV in 2003 which started operations in 2004. PrasarBharati also started its product DD-Direct+. In 2007, TRAI proposed a new initiative by name Headend-In-The-Sky (HITS) model as an alternative to the existing cable

distribution. Instead of the MSOs providing the bundle, there will be a single HITS operator who will prepare the bundle of channels and beam it to the Headend in the satellite. With the average Indian getting younger, and hence more likely to spend on nonessentials, the entertainment industry has the potential to grow explosively in the future. Now the industry is ready to enter a second stage of growth powered by the twin engines of technology (availability of quality infrastructure and the accelerated penetration of digital connectivity) and an enabling regulatory environment. DTH DTH is short form of Direct-To-Home technology. DTH is defined as the reception of satellite program with a personal dish in an individual home. DTH Digital TV system receives signals directly from satellite through the dish, decodes it with the Set-Top Box and then sends stunningly clear picture and sound to TV. DTH services were first proposed in India in 1996. But they did not pass approval because there were concerns over national security and a cultural invasion. In 1997, the government even imposed a ban when the Indian Sky Broadcasting (ISkyB) was about to launch its DTH services in India. Finally in 2000, DTH was allowed. The new policy requires all operators to set up earth stations in India within 12 months of getting a license. DTH licenses in India will cost around 85 million Rupees and will be valid for 10 years. The companies offering DTH service will have to have an Indian chief and foreign equity has been capped at 49 per cent. There is no limit on the number of companies that can apply for the DTH license. DTH does away with the need for the local cable operator and puts the broadcaster directly in touch with the consumer. CAS CAS stands for conditional access system, which is a digital mode of transmitting TV channels trough a set-top box (STB). The transmission signals are encrypted and viewers need to buy a set-top box to receive and decrypt the signal. The STB is required to watch only pay channels, not free-to-air channels, like Doordarshan. DTH INDUSTRY IN INDIA DTH service was launched back in 2004 by launch of Dish TV by Essel Group's Zee Entertainment Enterprises. Later on public broadcaster Doordarshan launched its free to air DTH named DD Direct+. In 2006 Tata teleservices in collaboration with British

Sky Broadcasting, a subsidiary of News Corporation started a service named Tata Sky. In 2007 the war of DTH heated up when 2 telecom giants Airtel and Reliance Communications along with a strong south Indian media group Sun TV and Electronics Company Videocon declared to launch their DTH services. The south Indian DTH service mostly providing South Indian Channels SUN DIRECT was launched in mid 2008 which provides service in South Indian States and Reliance ADAG launched their DTH service on 19 August 2008. Later on Airtel launched its services as Airtel Digital TV on 9 October 2008. As of July 2009 Videocon D2H+ has soft launched in Haryana, Punjab, Himachal Pradesh, Jammu & Kashmir and Chandigarh. In the current context of the global financial meltdown, the Direct to Home (DTH) industry in India is in the throes of multifarious challenges and opportunities. List of key players in the Indian DTH industry 1. 2. 3. 4. 5. 6. 7. Doordarshan (DD-Direct +) by Prasar Bharati Dish TV by ZEE group Tata Sky joined venture of Tata and Rupert Murdochs Sky TV Sun direct, an initiative of Sun Network BIG TV by Reliance Anil Dhirubhai Ambani group Airtel digital TV by Bharati telemedia Videocon d2h by videocon industries

Categorization of players in the industry 1. Government owned player: DD Direct+ 2. Private players: Dish TV, Tata Sky, Sun direct, Big TV, Airtel digital TV, Videocon d2h.

SCOPE OR SIGNIFICANCE OF THE STUDY The total number of households in our country is around 231 Million out of which Television households are only 148 Million (TAM Annual universe Update 2012). DTH Subscribers registered with Pvt. Service Providers is 44.21 Million (Indian

Telecom Services Performance Indicator Report Dec 2011 by TRAI). That shows the future growth potential of DTH industry. With the Government drive for rise in rural electrification, income and the consumption patterns, people have started demanding quality products. This is resulting into faster adoption of DTH as a category. The presence of all channels across the country is an enabler and will continue to be the game changer in favor of DTH Platforms. The recent regulation of Telecom Regulatory Authority stipulating the complete Digitalization by 2013 will further strengthen the demand and growth of the sector. With the government aggressively pushing in for digitization of TV, Multi System Cable Operators (MSOs) are expected to lose 15-20 per cent of their subscribers to DTH during the phase one that requires the digitization of Mumbai, Delhi, Chennai and Kolkata by end of October 2012. The recent success in installation of DTH TV in railways and buses will also unfold opportunities of such roll out in times to come. The new retail chain outlets spreading all across the country will also help in presence and acceptance of the DTH category as an off-the-shelf product. The recent successful launch of HD set top box, set top box with live recording etc will also create a new demand for the technology, further accentuating the growth story. In nut shell, the rise of rural consumption, reduction in the entry level price, variety of content, wide spectrum of value added service, large landscape still under cable dry area and the approach towards personalizing the services to the customers will continue to act as opportunity areas in the forthcoming years for DTH service. STATEMENT OF THE PROBLEM The Indian economy has emerged stronger and is more resilient after the recent global melt-down, which is reflected in the growth of consumption pattern across all economic strata. Despite the recent rise in inflation and interest rate, the growth in the items of mass consumption has not been deterred. India continues to sell around 13 to 14 Million Television sets per year and it is expected that this phenomenon will continue for years to come. The reduction in the prices of Color TV has led to widespread acceptability of the DTH in the rural area also. Moreover, the recent variety of Television sets such as LCD TV, Plasma TV, LED TV, 3D TV etc have resulted in adoption of DTH as a medium of receiving the channels. I have not found any studies regarding this topic in my area during recent times. I have found that a study on customer perception with regard to DTH services is relevant because of the increasing number of DTH customers in my locality leaving the local cable operators.

OBJECTIVES 1. To understand the customer perception on DTH services and how it affects their buying behavior 2. To understand the reasons behind the shifting to DTH Service. 3. To compare various key DTH Service Providers

METHODOLOGY SAMPLING, SAMPLING SIZE, TECHNIQUE PRIMARY DATA COLLECTION SECONDARY DATA COLLECTION