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DTH to boost fortunes of satellite channels

NetScribes/Sunil Joshi

With the government expected to give the nod to direct-to-home (DTH) services, the Indian broadcasting scene is poised for some major changes. While the decision will free satellite channels and individual subscribers from the whims and fancies of the cable operator, the latter could come in for some tough times in the future.

Once the government allows the KU-band DTH service, individual cable subscribers can directly receive satellite channels without the cable operator as an intermediary. All they need is a small 16/18-inch dish antenna and related equipment.

The DTH distribution rights will be be given to only one or two bidders with the necessary infrastructure. Rupert Murdoch's Star TV is a strong contender. However, when contacted, Star TV preferred to be diplomatic. "We will wait for the decision to be finalised and, based on the market moves, we will put up our own distribution system in 3-4 months," says Arun Mohan, executive vice-president, distribution, Star TV.

The threat to the cable operator lies in the huge projected growth of the DTH market. "The DTH market is expected to touch 2 million subscribers in two years," says an analyst at RenSearch, the equity research arm of Renaissance Securities. But the economics of DTH may restrict its use to high networth individuals and corporates.

"The DTH service will enable the individual subscriber to choose the channels that he wishes to watch and get billed only for them," says the analyst.

Better sound and image quality on account of the KU band, which comprises high-level frequencies measuring up to 12 Giga Hertz (GHZ), will place satellite channels in a position to call the shots in the market. For one, free-to-air channels can turn into pay channels, charging a premium for the quality of telecast.

MTV and Channel [V] are seen benefiting the most, given the importance of visual and audio quality in the business of music channels.

DTH will also enable satellite channels to bypass the cable operator and set their own rates for their pay channels. Pay channel rates have always been a bone of contention between the channels and the cable operators.

There's more in store for the Indian subscribers, who will now have more channels to choose from. So far, the maximum frequency - the Extended C-band of 4.8 GHZ - was available only to the Government of India and Doordarshan. The satellite channels had only up to 4.2 GHZ available to them. The 12 GHZ set free by the KU band will enable many other foreign channels to beam to India.

The only loser seems to be the cable operator, who could lose the captive market of subscribers. However, cable operators are not too perturbed.

"We have the price advantage, as we charge a reasonable amount for all the channels that we air. The cost of the satellite dish and related equipment is too high for the service to become an immediate hit. Besides, a subscriber will have to shell out twice what he pays now by way of monthly subscription," says S. Selven, the proprietor of Selven Electronics, a Mumbai cable operator.

The dish antenna, integrated receiver decoder (IRD) and other cable accessories will together cost Rs 20,000. Also, since the billing will be done by the broadcasting station (the channel which will get the DTH distribution rights), the subscriber will be charged on the basis of the bouquet system. A bouquet system is a group of channels under one banner.

"As cable operators with a large number of subscribers, we can spread the costs over many subscribers, thus bringing down the charges. The individual subscriber will not be able to do this," says Selven.

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