Has digitisation slowed down, stalled or derailed? That is the sense one gets at industry forums or while talking to people within.
At a Frost & Sullivan summit on television last month, the lead panel discussion was a tiringly familiar litany of all that is wrong with the way digitisation is being attempted in India. On the sidelines of the summit, Tony D'Silva, group CEO for media at Hinduja Ventures, worried whether the government would ensure that there is a deadline to digitise all of India's 153 million TV homes? His firm, one of the largest cable operators in India, has just lined up between $90-100 million for a nationwide roll-out of a headend-in-the-sky over the next 18 months. It is a different way of delivering TV signals to cable operators. Jittery investors want to know for sure if digitisation is, largely, on schedule.
Digitisation is critical because it will bring three key benefits in the long-run - Rs 12,000 crore more as revenues across the television industry, more choice for consumers and better monetisation of the world's second-largest TV market.
Eighty six million, or just over half of India's 153 million TV homes, are digital either through direct-to-home (62 million) or through digital cable (24 million). This has increased transparency, pay revenues and access to content. Going by Hong Kong-based consultancy Media Partners Asia's numbers, pay revenues for Indian broadcasters rose by 15 per cent in 2013 against 2012, largely on the back of more digital homes. And going by rating agency TAM Media Research's data, all kinds of content are now finding their way to the target audience, thanks to digitisation. For instance, Tamil and Telugu programming have seen a rise in Delhi, while English entertainment has seen time spent almost doubling.
This is because at a very basic level, digitisation first increases bandwidth, so it is possible to offer more. And all digital set-top boxes come with an electronic programming guide. The quality of the guide can actually change what people watch and the way they watch it, say data from both TAM and What's On India. The latter provides TV search technology. For instance, if you are a English-entertainment junkie and have a good guide, chances are you will head straight onto the cluster of English channels and surf only between them.
These, by the way, are just the early results. Once digitisation is complete and operational, prices will fall as packages change and adapt, and variety will come into play. Not to mention the additional Rs 12,000 crore in revenues that could come only because the process will plug leakages.
Going by past history, those numbers and facts are the best possible proof that digitisation is a much-needed change in the Rs 42,720-crore Indian television industry. Haphazard hyper-growth, poor regulation and short-sighted broadcasters have shaped India's TV industry into a structural nightmare. When there was no digital, more than 80 per cent of the money collected from consumers leaked away as undeclared cash. (currently over Rs 27,000 crore is collected on the ground). This left broadcasters gasping for pay revenues, especially at a time when advertising was slowing down. The only way was digitisation. A digital set-top box increases capacity 10 times. That means, instead of 100 channels, a cable operator can now offer 1,000 channels. This removes bandwidth shortages, increases variety, helps customisation and brings transparency. In late 2011, the government amended the Cable Television Networks (Regulation) Act, making it mandatory to sell TV signals through an addressable digital set-top box. The deadline for all of India to be digitised was December 2014.
Technically though, digitisation began when direct-to-home television first came into India in 2003. After it was mandated, in two-and-a-half years, more than half of India is digital. And that figure will only rise. Globally, smaller markets than India have taken anywhere between five to 10 years to digitise. India has done very well so far.
So maybe, it isn't fair to say that digitisation has stalled.
Sure, it has slowed down in the first six months of a year that were dominated by elections. What could get delayed are the benefits of digitisation as KYC forms, channel packages et al, go back and forth between broadcasters, TV distributors and last-mile operators. But that is no reason to start rethinking it.
Last week, Prakash Javadekar, the new minister for Information and Broadcasting, made a move that suggested this government is as serious on digitisation as the last one. It has got the telecom ministry to declare set-top boxes as essential telecom equipment, making it more competitive for domestic manufacturers (such as Videocon) to make them and generally pushing down the cost of importing them too. This should hasten the ordering of the millions of set-top boxes needed to finish digitisation. Giving cable, direct-to-home and other capital-intensive TV distribution formats infrastructure status, too, would help, at least to raise the last tranche of capital needed. Remember that the $4-odd billion that direct-to-home operators have invested so far has hardly seen returns, thanks to price regulation.
This is India's third attempt at digitisation. And so far, it is going reasonably well, given a hyper-fragmented, chaotic market with thousands of operators and broadcasters. Some fatigue is normal, but the industry should not give up on it, not now.
Twitter: @vanitakohlik
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