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1. Introduction
2. Literature Review and Conceptual Framework
3. Methodology
4. Data Analysis and Findings
5. Conclusions and Recommendations
6. Bibliography
 INDUSTRY ANALYSIS
ON
DIRECT TO HOME (DTH)

CONTENTS

Chapter
1. Introduction
2. Product lines and consumer behavior
3. Growth of the industry
4. Technology of production and distribution
5. Marketing
6. Innovation
7. Strategies and competition in the industry
8. Business environment
9. Critical success factors

Appendices
 Chapter
-1

Introduction
INTRODUCTION

Overview of the Industry

The history of Indian television dates back to the launch of doordarshan, India’s
national TV network in 1959. The transmission was in black & white. The 9th
Asian games which were held in 1982 in the country’s capital New Delhi heralded
the mark of color TV broadcasting in India. In 1991, Indian economy was
liberalized from the License Raj and major initiatives like inviting foreign direct
investments, deregulation of domestic business emerged. This lead to the in flux
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 lead to revolution.
Every city in the India had a complex web of co-axial cables running through the
streets with a new breed of entrepreneurs called as cablewallahs or Local Cable
Operators (LCO) taking in charge of distribution. The film industry was shocked
by this sudden growth and there were even organized protests for calling off the
Cable TV industry. There were simply too many cable operators in the country
and the channels had a difficult time in getting its returns as the existing system
was a non-addressable and the operators could simply give a reduced number of
subscribers to amass profit. This lead to the emergency of a new breed of firms
called as Multi System Operators (MSO) who had heavy financial muscles to
make capital investments. . The MSO industry became highly monopolistic which
warrants government participation to ensure competition.
Later on, the United Front Government had issued a ban on use of ku band
transmission. After a change of government, the ban got lifted finally in 2001 and
TRAI issued the guidelines for operating DTH. Country’s first private DTH
license was awarded to Dish TV in 2003 which started operations in 2004. Prasar
Bharati also started its product DD-Direct+.
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 which is the business under taken by some companies by observing
the rate of growth and scope for business & opportunity in the Indian market
which has 120 million viewers of TV.

With the Indian economy growing at a GDP growth rate of 7.4%, there is a sense
of growth prevailing every where. The average Indian’s disposable income and
purchasing has risen to never before levels. The Indian entertainment and media
industry is not far behind. It is currently estimated at a worth of Rs.450 billion with
a CAGR of 18% over the next 5 years. Terms which were alien to Indian’s like
capital DTH, digital cables, IPTV are suddenly finding presence in the country’s
journals.
In 2007, TRAI proposed a new initiative by name “Head end-In-The-Sky (HITS)”
Model as an alternative to the existing cable distribution. Instead of the MSO’s
providing the bundle, there will be a single HITS operator who will prepare the
bundle of channels and beam it to the Headed in the satellite. The LCO’s can
receive this digitalized bundle and deliver to the individual homes. With HITS,
country wide implementation of CAS becomes instantaneous and cost-effective.
This benefits both the broadcasters and the customers by ensuring
Addressability, Better quality of service and increased number of channels.
Another emerging trend is the IPTV which is yet to be regulated and one can
expect lot of action in this sector.
According to a report on Direct to home (DTH) service, it predicts that India
would overtake Japan as Asia’s largest DTH by 2010 and be the Asia’s leading
cable market by 2010 and the most profitable pay-TV market by 20015.

List of players in the industry

• Doordarshan – (DD-Direct +) of Prasar Bharati comprising of 33 FTA
channels and 12 All India Radio Channels.
• Dish TV of ZEE group.
• Tata Sky joined venture between Tata and Rupert Murdoch’s Sky TV.
• Sun direct of Sun Network.
• BIG TV of Reliance Anil Dhirubhai Ambani group.
 • Airtel digital TV of Bharati telemedia
• Videocon d2h of videocon industries

Categorization of players in the industry

Government owned player: DD Direct+.

Private players: Dish TV, Tata Sky, Sun direct, Big TV, Airtel digital TV, Videocon
d2h

Brief profile of players in the industry

DD DIRECT+

Doordarshan is the public television broadcaster of India and a division of Prasar

Bharati, a public service broadcaster nominated by the Government of India. It is
one of the largest broadcasting organizations in the world in terms of the
infrastructure of studios and transmitters. Recently, it has also started Digital
Terrestrial Transmitters. On September 15 2009, Doordarshan celebrated its
50th anniversary.
Doordarshan had a modest beginning with the experimental telecast starting
in Delhi on 15 September 1959 with a small transmitter and a makeshift studio.
The regular daily transmission started in 1965 as a part of All India Radio.
The television service was extended to Bombay (now Mumbai) and Amritsar in
1972. Till 1975, seven Indian cities had television service and Doordarshan
remained the only television channel in India. Television services were separated
from radio in 1976. Each office of All India Radio and Doordarshan were placed
under the management of two separate Director Generals in New Delhi.
Finally Doordarshan as a National Broadcaster came into existence.
National telecasts were introduced in 1982. In the same year, color TV was
introduced in the Indian market with the live telecast of the Independence Day
speech by then Prime Minister Indira Gandhi on 15 August 1982, followed by the
1982 Asian Games being held in Delhi. Now more than 90 percent of the Indian
population can receive Doordarshan (DD National) programmes through a
network of nearly 1400 terrestrial transmitters and about 46 Doordarshan studios
produce TV programs today.

DD Direct+ is a free Direct to Home (DTH) service that provides satellite

television and audio programming to households and businesses in the Indian
subcontinent. Owned by parent company Doordarshan, DD Direct Plus was
launched on December 16, 2004. Now chairman of DD plus+ is Shri Arun
Bhatnagar and CEO is B S Lalli under the ministry of information and
broadcasting.

Dish TV

Dish TV is the first private DTH satellite television provider in India, using MPEG-
2 digital compression technology, transmitting using NSS Satellite at 95.0. Dish
TV's managing director and Head of Business is Jawahar Goel who is also the
promoter of Essel Group and is also the President of Indian Broadcasting
Foundation and Mr. Subhash Chandra is the Chairman of Dish TV. Dish TV is a
division of Zee Network Enterprise (Essel Group Venture). EGV has national and
global presence with business interests in media programming, broadcasting &
distribution, speciality packaging and entertainment. Zee Network incorporated
dishtv to modernize TV viewing. By digitalizing Indian entertainment, this
enterprise brought best television viewing technology to the living room. It not
only transmits high quality programmes through satellite; but also gives a
complete control of selecting channels and paying
DTH service was launched back in 2004 by launching of Dish TV by Essel
Group's Enterprises. Dish TV is on the same satellite where DD Direct+ is. Dish
TV started its service in Pakistan with the collaboration of Budget
Communication. Dish TV was only DTH operator in India to carry the two Turner
channels, Turner Classic Movies and Boomerang. Both the channels were
removed from the platform due to unknown reasons in March 2009. Dish TV
uses NSS-6 to broadcast its programmes. NSS-6 was launched on 17
December, 2002 by European-based satellite provider, New Skies. Dish TV
hopped on to NSS-6 from an INSAT satellite in July 2004. The change in the
satellite was to increase the channel offering as NSS 6 offered more transponder
capacity.

Tata Sky

Tata Sky is a DTH satellite television provider in India, using MPEG-2 digital
compression technology, transmitting using INSAT 4A at 83.0°. Tata sky is
incorporated in 2004; Tata Sky is a JV between the TATA Group and STAR. Tata
Sky DTH endeavors to offer Indian viewers a world-class television viewing
experience through its satellite television service. Vikram Kaushik is present CEO
of Tata Sky Ltd. The TATA Group is one of India's largest and most respected
business conglomerates. It comprises 93 operating companies in seven business
sectors and diversified group: information systems and communications,
engineering, materials, services, energy, consumer products and chemicals. The
TATA Group has operations in more than 40 countries across six continents and
its companies export products and services to 140 nations.
The Group and its enterprises have been steadfast and distinctive in its
adherence to business ethics and their commitment to corporate social
responsibility. This is a legacy that has earned the Group the trust of many
millions of stakeholders in measure few business houses anywhere in the world
can match. The SKY brand, owned by the UK-based British Sky Broadcasting
Group, brings to Tata Sky the reputation of more than 20 years experience of
satellite broadcasting. SKY is well known for the innovative products and
services launched by BSky, such as DTH broadcasting in 1989, digital satellite
broadcasting in 1998, interactive television services in 1999 and the SKY+
personal video recorder in 2001. Tata Sky joins an international group of DTH
businesses that includes platforms as far apart as the UK and Italy in Europe,
and Mexico and Brazil in Latin America. Tata Sky Ltd is the First Indian DTH
provider to be awarded the ISO 27001:2005 accreditation, the ultimate
benchmark for information security. The assessment for the certification was
conducted by Intertek Systems Certification, the management systems
registration business unit of Intertek Group plc and is accredited by several
internationally-recognized accreditation bodies worldwide.
In October 2008, Tata Sky announced launching of DVR service Tata Sky+
which allowed 45 hours of recording in a MPEG-4 compatible Set Top Box. The
remote is provided with playback control keys and is being sold with special
offers for existing subscribers. Tata Sky was selected as a SUPER BRAND for
the year 2009-2010 by an independent and voluntary council of experts known
as Super brands Council. It is the only Indian DTH to have won this distinction.

Sun Direct

Sun Direct is a DTH satellite television provider in India, using MPEG-4 digital
compression technology, transmitting using INSAT 4B at 93.5°E. It is the
country's first MPEG 4 technology DTH service provider. Sun Direct is a DTH
service in India headquartered in Chennai, Tamil Nadu. Sun Direct TV was
registered in February 16, 2005. However, the failed launch of INSAT 4C
resulted in a lack of transponders, delaying the launch. The service was finally
launched on December 2007 after availability of transponders from INSAT 4CR.
Because of the lowest pricing of any DTH in India Sun Direct spread rapidly all
over the country. On December Sun Direct was launched in Mumbai and
announced its pan India launch. By 2009 it became leading DTH provider with 3
million subscribers. This makes it 4th largest DTH service provider of India. In
April 2009 Sun Direct officially launched its High-Definition service in India.
Sun Direct uses the latest MPEG-4 based technology to increase broadcast
capacity.
Sun Direct provide next-generation services in fast-growing and emerging
markets quickly and efficiently. Sun Direct selected Oracle based on its
convergent multi-service capabilities and proven real-time scalability allowing it to
consolidate billing operations, enables powerful new service offerings and
improves visibility into customer information across services.

BIG TV

Reliance BIG TV is a DTH satellite television provider in India based in Navi

Mumbai, using MPEG-4 digital compression technology, transmitting using
MEASAT-3 91.5°east. It is the 5th DTH service launched in India. Reliance BIG
TV limited is a part of Reliance Communications Ltd., a subsidiary of Reliance
Anil Dhirubhai Ambani Group founded by the Late Dhirubhai Ambani, the Indian
business tycoon and owned by his son Anil Ambani. BIG TV started operations
from 19 August 2008 with the slogan "TV ho Tho BIG Ho" ("If you have a TV,
make it BIG"). It currently offers close to 200 channels and many interactive ones,
32 cinema halls (i.e. Pay Per View Cinema Channels) as well as many Radio
channels. The company plans to increase the number of channels in the near
future to 400 and begin High Definition (HD) broadcast. It is the first Pan-India
DTH provider that uses MPEG-4 for broadcasting. There are also plans to
introduce services like i-Stock, i-News and other such interactive services in the
future.
Reliance BIG TV was launched on August 19, 2008 with the sole aim of providing
the consumer with quality and enriched home entertainment service at value-
driven pricing. Reliance BIG TV's launch in August was probably the biggest roll-
out in home entertainment ever and deployed the most advanced MPEG4
technology that enabled them to deliver best quality digital audio-video to the
consumer. It also got prepared for the future when Hi-Definition TV will be
launched in India because only MPEG4 technology can support HD TV and not
MPEG2 which is used by the earlier entrants in the DTH industry.
Reliance BIG TV's retailer network is spread across 100,000 outlets in 6,500
towns in India. This was literally unheard of in the DTH industry. They had
effectively out-stripped the competition here. When it came to pricing –
packaging, their introductory offer stood at Rs. 1,490/- with 3 to 6 months of free
subscription. They also introduced 32 Pay-Per-View Movie Channels, the highest
by any DTH player.

Airtel digital TV

Bharti Airtel Limited is the flagship company of Bharti Enterprises and is India’s
largest integrated and the first private telecom services provider with a footprint in
all the 23 telecom circles. As India's leading telecommunications company, the
Airtel brand has played the role of a major catalyst in India's reforms, contributing
to its economic resurgence. Airtel since its inception has been at the forefront of
technology and has steered the course of the telecom sector in the country with
its world class products and services.

Airtel Digital TV is a DTH (Direct to Home) service from Bharti Airtel. It uses
MPEG-4 digital compression with DVB-S2 technology, transmitting using INSAT
4CR 74°E
Airtel digital launched on 8 October, 2008 with a 360 degree mega campaign
'Come Home to the Magic. Since then it has launched 2 other campaigns: ‘Stars
come home’ (March 2009) and ‘DTH Picture Clarity (August 2009) has increased
its channel base to 183+ channels. Airtel digital TV is now amongst the fastest
growing DTH brands in the country and is available across 5000+ towns in India.
It has also been ranked as the best DTH service by “Living Digital” magazine.
Airtel chief Sunil Mittal said that Airtel digital TV and other DTH players have a
bright future in Indian market as the people are getting more attracted towards
DTH because of its quality and affordability.

Videocon d2h

Videocon d2h is a DTH satellite television provider in India based in Mumbai,

using MPEG-4 with DVB S2 digital compression technology
Videocon Leasing & Industrial Finance Limited was incorporated on 4th
September, 1986 as Adhigam Trading Private Limited. In terms of the necessary
resolutions
Passed under Sec. 21 of the Companies Act, 1956, the name of the Company
was changed to Videocon Leasing & Industrial Finance Limited on 14th
February, 1991. The Company received a fresh certificate of incorporation from
the Registrar of Companies, Gujarat at Ahmedabad on 14thFebruary, 1991.
Videocon d2h launched May 1, 2009. it came with a very good strategy for selling
both of its electronic products like TV’s DVD’s along with the new set top box.
This is offering direct to TV with out any set top box also. Only the antenna is
enough, it also came with DVD which is connected directly to the TV or antenna
is connected to DVD which gives a best quality of out put.

Chapter
-2
 Product Lines And Consumer Behavior

PRODUCT LINES AND CONSUMER BEHAVIOUR

Range of products
• Set-Top-Box.
• Head-Antenna.
• Cable
• DVD
• Remote
• LCD TV/PLASMA TV/CATHODE RAY TV/LED TV

Product description

SET-TOP-BOX:
The set top box comprises of the MPEG-2 OR MPEG-4 with DVB2 technology.

Head-antenna:
Antenna which receives signals directly from satellites,

Cable:
Cable connects antenna to the set up box
DVD:
One of the recent entrants into DTH industry is vediocon. This came with set top
box with DVD

ACCESS CARD:
The access card is another important thing in the set top box setup
Where the access card will receive the signals directly from satellite trough head
top antenna

LCD TV:
Some companies are offering the whole set of LCD TV with DTH connection
Ant in the case of cathode ray tubes and in case of PLASMA

Remote:
A compactable remote for both SET UP BOX and TV is used in operating both
TV and Set top box.

Complimentary Goods
LCD TV, DVD, CT TV, Cables, plus box, Ups, Home theaters, sound box, plastic
and paper which are used for recharge cards.

Substitutes
Local Cable Operators, Inter-Net which is bringing many facilities like live TV
channels, along with the net browsing, Theaters, radio stations, I pods.
 Chapter
-3

Growth Of The Industry

GROWTH OF THE INDUSTRY

Rate of Growth
The DTH service market in India has emerged as one of the most lucrative
markets which have successfully resisted the impacts of the current economic
slowdown. The slowdown has certainly proved a boon for the Indian DTH
industry as people have now started to cut on their entertainment expenditure
and instead of viewing movies at theatres, they are preferring to stay at home
with their television sets.
With the Indian economy growing at a GDP growth rate of 7.4%, there is a sense
of growth prevailing every where. The average Indian’s disposable income and
purchasing has risen to never before levels. The industry is anticipated to add
nearly 5 Lakh subscribers per month during 2009 and the numbers are
forecasted to surge further at a CAGR of around 30% through 2012, "Indian
DTH Market Forecast to 2012". 20% annual growth is being witnessed in the
DTH sector in India with over 8.5 million households having digital pay-TV.
A report attributes that the anticipated growth to the efforts of DTH industry
players who are all trying to lure viewers by cutting down prices as well as
offering perks even though it translates into loss of Rs 1,600-2,000 on each new
subscriber acquired by them. They have started to offer a number of value-added
services such as 'movie on demand', live recording of TV content, matrimonial
match-making, etc.

Pattern of Growth

The big game is all about shaping up grandiose plans to master the winning rules
to garner as much portion of the Indian DTH pie as possible by a handful of
players. Since the DTH space denotes big value, akin to the space occupied by
television and telephony, inter-firm rivalries have thrown up price wars, discount
schemes, procurement of transponders, ambitious targets for improving the
subscription base, popular bouquet of channels, set top boxes with superior
quality of videos, improving content, etc as a desperate means to entice the
Indian viewer.
The pattern of growth is very difficult to determine because a business cycle
takes place in long term. But this industry is having very short period for making
or observing a business cycle.
The analysis that can be made is though the economic cycles is not continues
and it was in boom then when the industry started and now just the economy is in
recovering stage from the recession. Interesting factor is that all the industries
are hit seriously buy the rescission but DTH industry has reported growth
continuously but only it has slowdown the rate of its growth. Now the industry is
growing at 20% for every annum.

Growth Determinants

Demand constraints and SCAR are the factors which effects the growth of the
industry. Growth determinant and high TV sales increase the chance for more
sales of set top box which will effect the growth. When the facilities of the
products increase it acts as a growth determinant.
The entertainment channels and the news channels players increase the growth
to opt the DTH. Some of the DTH players are bringing innovative plans like live
shopping, broad band, and etc will act as growth determinants.
 Chapter
-4

Technology Of Production And Distribution

TECHNOLOGY OF PRODUCTION AND DISTRIBUTION

Cost Structure
The costs incurred by the DTH players is mainly on its technology, satellite dish,
set top box accessory cards, Ku band transponders in the satellites, customer
premise equipment(CPE). The launch of satellites is another huge cost which the
DTH plays shares the transponders. And it costs them much than any thing.
Another cost incurred is on operating cost.
Economies of Scale
Economies of scale may be utilized by any size firm expanding its scale of
operation. The common ones are purchasing (bulk buying of materials through
long-term contracts), managerial (increasing the specialization of managers),
financial (obtaining lower-interest charges when borrowing from banks and
having access to a greater range of financial instruments), and marketing
(spreading the cost of advertising over a greater range of output in media
markets).
Cost Advantages
1] Direct customer relationship.
2] Better storage
3] Extensive use of resources.
4] Availability of labour at cheap rates

Economies of Scope
An economic theory stating that the average total cost of production decreases
as a result of increasing the number of different goods produced.
Often, as the number of products promoted is increased and the DTH players
used, more people can be reached with each rupee spent. These efficiencies do
not last, however; at some point, additional advertising expenditure on new
products will start to be less effective (an example of diseconomies of scope). If
a sales force is selling several products they can often do so more efficiently than
if they are selling only one product. The cost of their travel time is distributed over
a greater revenue base, so cost efficiency improves.
There can also be synergies between products such that offering a complete
range of products gives the consumer a more desirable product offering than a
single product would. Economies of scope can also operate through distribution
efficiencies. It can be more efficient to ship a range of products to any given
location than to ship a single type of product to that location.
Value added
Many players are using this DTH as the basis and giving many value added
services to the customers. Some of the players are giving best valued services
to the customers like Airtel gives live-news, home shopping, live gaming, broad
band, horoscope, radio, and etc. Tata sky is giving recording for more than 4
hours, and came with a differential strategy of Tata sky+ with other facilities. Big
TV is giving live with Big movies, Dish TV is giving live TV on the wheels, and
many other value additions.

Logistics
Logistics is still a nascent and fragmented industry in India. It is estimated that
while outsourced logistics accounts for 54% of total logistics spending in India,
organized players have only 10% of the pie.
DTH industry follows a good logistics which is as similar to the logistics which are
used buy automobile industry, for the effective management of the DTH industry.

Labor

Labours are included in every activity of the business, most of the people working
are not daily labours, they are employed and paid monthly in the form of salary.
DTH requires skilled labor like management executives, administrators, software
engineers, sales executives and attorneys.
 Chapter
-5

Marketing

Marketing

Market segmentation, marketing strategies, marketing practices and marketing

concepts specific to the industry

Indian TV channel broadcast 15.7-mn advertisement every year, which totals to

362-mn seconds of TV advertisement every year. India currently has over 400
channels.
TV viewer ship has declined by 5% since 2001. TV broadcasters are expected to
go hike in advertisement rate this year by 16-18%. Market segmentation in DTH
industry mainly concentrates on women who don’t like missing their daily soap
and news more ever women are able to learn English speaking which is a very
special feature of DTH. DTH also concentrates on children also by providing
them games, dictionary, some discovery videos specially inbuilt, maths, science
and social knowledge. It also focuses on old people as it has updated videos of
various holy and religious places.
DTH uses different marketing strategies for promotion and sales of its product. It
gives advertisements with their brand ambassadors which attract customers,
door to door selling, on the phone selling, discount and offer sales, packages, etc
Marketing practices is a continuous process as the competition keeps increasing
among the players in the industry. Each player is investing lots of money in
promoting there brands. Many players are making advertisement with movie
actor and actress as brand ambassadors for their products because DTH is
mainly considered with entertainment.
Some of the companies like Tata sky is having Super Star Amir khan as brand
ambassador and Airtel is having many film stars like kareena kapoor,
A.R.Rehaman, saif ali khan, etc. Dish TV is also having Super Star Sharuk khan
as the brand ambassador.
Sun direct also uses southern actress for their brand promotion. Marketing
practices are the decisions taken by the manufacturing company to increase
sales, expand themselves into many areas etc. Successful marketing practices
bring sale up, while unsuccessful marketing practices have no impact on sale or
negatively impact sale.Marketing concepts specific to the industry is primarily
targeted at a niche segment who buy the TV sets from the electronic retail
chains.

Chapter
-6
 Innovation

Innovation
Types of innovation, concepts of innovation relevant to the industry, source of
innovation, rate of innovation and economies of scale.

The concept of innovation in DTH industry is INCREMENTAL innovation; every

thing that is done is due to constant research of many marketing and analysts to
bring many innovations to the existing products in the DTH industry. Incremental
innovation is the apt innovation which is suitable and all the DTH players are
concentrating up on.
This innovation makes the business to grow continuously and brings advantages
to the customers using the products and the service.

There are many sources of innovation for this industry as mentioned in the
above, the technology and the people are the main sources for the innovation.
Customer’s opinions and their needs can be served by providing a service which
is matching to their needs and requirements. In this days every company setups
its own R&D in its own company with very intelligent people for meeting the
expectation op the customer.
Digital TV, the DTH service from Airtel, has announced India’s first skin
integration innovation on its EPG screen in partnership with Yahoo. Yahoo takes
forward its latest brand campaign “YOU” in this first of its kind partnership where
an online portal will use DTH as a medium to promote itself.
The ‘Electronic Programming Guide’ screen on Airtel digital TV is now completely
integrated with Yahoo India’s homepage. Customers will find a message ‘Fill your
home page with all the things that make YOU’ when they log onto to the EPG
screen. A prompting ‘Red Button’ will take them to a dedicated landing page that
elaborates the offerings on Yahoo India’s new home page. The ‘YOU’ campaign
enables users to customized the home page as per their liking and empowers
them with the choice to integrate social applications such as Facebook with their
Yahoo homepage. This whole idea was conceived by NetworkPlay, right from
design elements to execution and thanks to Mindshare for buying into the idea
and flawlessly helping people execute it.

Tata Teleservices Limited has announced a technological breakthrough—a first-

of-its-kind innovation in India with the launch of TATA Photon TV, a new
application that allows Tata Photon Plus subscribers to watch live television
channels on their laptops while on the move, and on their personal computers at
home and in the office. The Photon TV service is exclusively available to Photon
Plus users. “With its growing popularity, Photon Plus has caught the admiration
of millions of users across the country, with its high-speed data access
capabilities and the ease of mobility.
TATA Photon TV is a personal computer- and laptop-based video-streaming
application, which allows Tata Photon Plus users to view live TV feed from
various sports, news, entertainment and regional channels, and to watch
recorded TV shows from the library (viz Coffee with Karan, Zoom, Pogo, etc),
movies, music and videos on demand.
Internet Browsing charges will be charged as per your Photon+ tariff plan and it
would be applicable while viewing Photon TV. These charges would be over and
above the subscription charges for the Photon TV. (approximate data usage is 1-
2MB per Min).

Rate of innovation in this sector is growing at a faster rate in the recent years
where as it is not very impressive before this period. The reason for this is the
fair competition between the all players in this DTH industry. It led to the
development of new products in this sector which also led to the diversification of
products as there is abolition of entry of foreign industries into Indian industries
initially. It also made the industries in this sector to establish their own R&D
departments for successful product innovations like Airtel Live, Vediocon d2h.

The brand loyalty for each and every company is very high, so there is no need
of lot of costs to be pored in marketing and promotion of the service and product.
Every function that is performed by the players is a well planned and executed
properly.
So in all the areas those players are using the expertise people in the industry
and performing operations in DTH industry very economically.

Chapter-7

Strategies And Competition In The Industry

Strategies and competition in the industry

Competitors, Strategies used in the industry, Porter’s generic strategies model,

porter’s five forces model and analysis using it, element of industry structure,
porter’s value chain model analysis, swot analysis, concept of generic value
chain, concept of growth share market matrix, company position .

Competitors
Every company has its own goal, every company wants to achieve and full fill its
goals, many companies like the big players in the industry wants to grab most of
the market share. Some of the companies want to achieve 10million customer
base by 2010 they are Dish TV, Tata sky, Sun direct, BIG TV etc.
The industry’s objective is to achieve 60million customers buy ‘2012’ i.e., nearly
50% of the present existing customers.

Strategies used in the industry

Technology transfer is one of strategy used in the industry and it is existence for
a long time. In recent decades, concerted effort has been made to exploit the
existing technology to a larger extent by transfer of technology, to generate
greater economic impetus. It provides opportunity to generate larger returns on
the investments made in R&D. Its importance lies in its ability to stimulate and
strengthen the innovation process.

Porter’s generic strategies model

Generic strategies were used initially in the early 1980s, and seem to be even
more popular today. They outline the three main strategic options open to
organization that wish to achieve a sustainable competitive advantage.

The generic strategies are: 1. Cost leadership, 2. Differentiation, and 3. Focus

1. Cost leadership
In the case of media products, means they should be offered at a price lower
than their competitors’ but with as good benefits, or, the unique benefits the
media products offer can over-offset the premium.
2. Differentiation
Differentiation in DTH refers to when a organization provides unique benefits to
the users through product innovation. This is to increase the probability of the
media users to choose the product. A media organization with a target user
loyalty can concentrate more on how to fully meet the target user’s needs rather
than on product cost saving.
3. Focus
Focus strategy is also known as a 'niche' strategy. The clutter of ads has now
spilled out on the number of channel availability due to which people are spoilt for
choice. Thus Niche channels are the only way to maintain viewer loyalty. TATA
Photon plus is more niche oriented.

SWOT Analysis
STRENGHT
Growing number of player and competitive advantage.
Supply creates its own demand.
Brand name
Service and flexibility.

WEAKNESS
Skilled labor
Satellite technology
Signals
Viewer migration.
Uncertainty in viewer ship.

OPPORTUNITY
Technology
Distribution
Innovation
Value adding

THREAT
Economic downturn.
Climate
Radio
Cinema halls
Broad casting of channels
New entrants

Porter’s five force model

The five forces which one must consider to analyze any industry are the rivalry
between the firms within the industry being analyzed, the bargaining power of
buyers, the bargaining power of suppliers, the threat of substitute products or
services, and the threat of new entrants (also known as barriers to entry). They
are also shown in the diagram below. Initially propounded by Harvard Business
School Professor Michael Porter, the Five Forces framework has been accepted
as a strategic framework which one can apply to analyze any industry.
Threat of substitutes
DTH gives stiff competition from the terrestrial, cable & IPTV. As per the industry
estimates, there are 130 million TV homes of which 71 million are served by
cable and around 6 million served by DTH with the remaining taken by terrestrial
transmission. As IPTV is a new entrant there is not much data on its subscriber
base.

Bargaining power of suppliers

DTH industry relies on three major suppliers. Customer premise equipment
(CPE)
Comparing of the satellite Dish, Set Top Box with the necessary Access Card,
the Ku band transponders are obtaining satellites and content. With India set to
overtake Japan as Asia’s largest DTH by next year, the bargaining power of India
DTH operators with CPE suppliers have been steadily increasing.

Bargaining power of buyers

With enough operations to choose both from the point of alternate mediums like
cable, IPTV and terrestrial broadcast and from the point of increasing DTH
operators, the consumer is at his will to decide. Customers will continue to have
a high bargaining power until DTH platforms try to differentiate them as superior
players with better content and clarity.

Rivalry among existing firms

With 3 operational players and 4 players in the queue, inter firm rivalry is quite
high.
The competition from state owned DD-Direct to private players in negligible from
the content point of view as the number of channels offered by DD-Direct is very
limited. However, DD-Direct does not change any monthly subscription charges.
Between Dish TV is Tata Sky there is an intense rivalry exhibited by price war
and discount schemes offered to new connections. Being the first mover, dish TV
had price advantage in both the STB offers superiors DVD quality Video to its
advanced STB.
While Dish TV is planning to spend Rs. 850crs over the next 3 years, the rival
TataSky is willing to spend Rr.2000crs over the medium term. The companies
have also set ambitious targets with Dish TV aiming to reach 5 million
subscribers in the next 18 to 20 months while Tata sky aiming to reach 8million
subscribers in the next 18 to 20 months while Tata sky aiming for 8 million
subscribers by 2012.

Threat of new entrants

With already 7 player’s space in the DTH space, threat of new entrants is low.
There is already enough competition which will discourage new firms to enter this
business. While getting a licensee is relatively easy, the barriers to entry are high
when it comes to pricing of CPE and getting the required transponder. There is a
definite, first mover advantage.

Analysis of the Industry using Porter’s value chain model

Porter’s value chain analysis is considered with the value analysis of the several
functions of the DTH industry, it makes to understand the importance of this
model to develop and add on value to the present features of the industry and it’s
functioning.
Value analysis says that an effective logistics should be undertaken to
commencement of the business in cost effective way. The most the cost
effective, the more value is added to the process. It is noting but proper or
optimal use of the resources present and using the technology. This value
addition is not only in the logistics, it should be carried in all areas of the
management, production, distribution and etc. Thus DTH industry can increase
its value addition to the customers and the features and of industry.

Concept of growth share matrix (BCG model)

The BCG – GROWTH SHARE MATRIX is a portfolio planning model developed
by Bruce Henderson of the Boston Consulting Group in the early 1970's. It is
based on the observation that a company's business units can be classified into
four categories based on combinations of market growth and market share
relative to the largest competitor, hence the name” growth share”.

Under the BCG GROWTH-SHARE MATRIX, as an industry matures and its

growth rate declines, a business unit will become either a cash cow or a dog,
determined solely by whether it had become the market leader during the period
of high growth. While originally developed as a model for resource allocation
among the various business units in a corporation, the growth-share matrix also
can be used for resource allocation among products within a single business unit.
In the DTH industry when the market share is obtained then it is automatically
treated as the market leader, and also it needs maximum market share to extent,
when the market is not in incremental state then the growth rate of the industry
will retain. Again this industry follows all the variables in the all areas till the both
will come into normal level.
 Chapter
-8

Business Environment

Business Environment
PESTEL Model
Political factor
 Chapter
-9

Critical Success Factors

Critical success factors

Appendices
Appendices

MEDIUM 2008
TV 40.7
PRESS 46.9
RADIO 3.2
CINEMA 0.7
OUTDOOR6.8
INTERNET 1.7

GROWTH RATE OF ADVERTISEMENT REVENUE IN DIFFERENT MEDIUM:

Medium Year of growth in 2008(%)
TV 22
Press 18
Radio 40
Cinema 50
Outdoor 14
Internet 45
Total 20

Indian TV channel broadcast 15.7-mn advertisement every year, which totals to

362-mn seconds of TV advertisement every year. India currently has over 400
channels.
TV viewer ship has declined by 5% since 2001. TV broadcasters are expected to
go hike in advertisement rate this year by 16-18%.

Yearly results of dish tv

In Rs (crores)

Mar '06 Mar '07 Mar '08 Mar '09

Sales Turnover 31.46 190.94 413.28 737.69
Other Income -- 3.40 2.43 1.27
Total Income 31.46 194.34 415.72 738.97
Total Expenses 114.44 376.11 632.34 926.41
Operating Profit -82.98 -185.17 -219.06 -188.72
Profit On Sale Of Assets -- -- -- --
Profit On Sale Of Investments -- -- -- --
Gain/Loss On Foreign
-- -- -- --
Exchange
VRS Adjustment -- -- -- --
Other Extraordinary
-- -- -- --
Income/Expenses
Total Extraordinary
-120.34 -- -- --
Income/Expenses
Tax On Extraordinary Items -- -- -- --
Net Extra Ordinary
-- -- -- --
Income/Expenses
Gross Profit -82.98 -181.77 -216.63 -187.45
Interest 1.67 11.78 46.95 72.70
PBDT -204.99 -193.55 -263.56 -260.14
Depreciation 2.84 57.53 149.05 215.41
Depreciation On Revaluation
-- -- -- --
Of Assets
PBT -207.83 -251.08 -412.61 -475.55
Tax 0.03 0.25 0.59 0.73
Net Profit -207.86 -251.33 -413.20 -476.28
Prior Years Income/Expenses 0.03 -0.55 -- --
Depreciation for Previous
-- -- -- --
Years Written Back/ Provided
Dividend -- -- -- --
Dividend Tax -- -- -- --
Dividend (%) -- -- -- --
Earnings Per Share -- -- -- --
Book Value -- -- -- --
Equity 71.57 42.82 42.82 68.73
Reserves 45.97 -82.30 -495.50 279.23
Face Value 1.00 1.00 1.00 1.00

Reference:
Bibliography: