Tata Sky’s latest offer giving a 50 per cent discount on Tata Sky Plus might just change the pricing in the direct-to-home (DTH) segment.
As a part of its first anniversary celebration, the DTH player earlier this month offered to give at almost half the price digital video recorder (DVR)-based set-top boxes that allow users to pause, record and rewind any show. The DVR-based set-top box, which originally came with a price tag of Rs 8,999, are now on offer for Rs 4,999. However, the offer is valid till Diwali.
Owing to the cut-throat competition in the Indian market, the average revenue per user (ARPU) of DTH players has remained low at $3-4 (Rs 147-Rs 196) per month as against $21 (Rs 1,029) for most of their peers in the Asia Pacific region, according to the Ficci Frames 2009 report.
Despite this, some of these players have been heavily subsidising the personal video recorder (PVR)-based set-top box as India is a price-sensitive market, point out industry insiders.
These are some of the reasons why players like Airtel, Reliance Big TV, Sun Direct and even the leader of the pack, Dish TV, have deferred their plans to launch the PVR offering. But still they are layers are luring users with offers, to retain their market share.
Dish TV, which had earlier announced its intention to launch PVR-based set-top boxes, has reportedly put the plan on the back burner. But not to be left behind its competitors, Dish TV Chief Operating Officer (COO) Salil Kapoor has announced affordable channel pricing to bring new customers to the company. “We will offer 185 channels at Rs 125 and every 10th customer will get Rs 1,000 as cash-back,” he says.
The latest entrant in the DTH market, Sun Direct, which has achieved a subscription base of four million, is gearing up for festive sales. The company’s COO Tony D’Silva says, “We certainly plan to launch a PVR offering, but this is not the right time. It’s not just about price, there are many other issues like exclusivity of content. Otherwise, why should the user record the shows?”
Instead of PVR, the DTH player has launched Sun Direct-HD (high definition). “This product will appeal to the top rung users who are looking for a better viewing experience,” adds D’Silva.
The Sun Direct HD pack, which includes HD set-top box and accessories, HD installation, HD activation and HD content charge, comes at Rs 14,799 for a year. Users have the option to choose between the basic package (130 channels) plus two HD channels and the Jumbo Pack of 30 popular pay channels.
Reliance Big TV, which also has a subscription base of four million, is going slow on launching its PVR offering. While Big TV declined comment on the PVR offering, a company official said: “I don’t think the Indian user is ready for such services. Reasons being pricing and lack of technological awareness. But the company will certainly launch its DVR offering at a much lower price point.”
Big TV has announced a slew of new offerings for the festive season. For only Rs 1,690, the company is offering three months’ subscription of its Silver Pack. It has added 22 new channels to its platform. On monthly subscription packs, customers can avail themselves of new top-up packs for longer duration at attractive prices.
Despite all the concerns among DTH players, Devendra Parulekar, partner, DTH Segment Champion, Ernst & Young, feels that the initial investments by Tata Sky for creating a market will give it the first-mover advantage. “PVR is an idea, and someone has to make a beginning. Besides, PVRs will be targeted at customers who are upwardly mobile and technology savvy. I think each firm will have their own strategy to win high-end customers who will create better ARPU for them,” concludes Parulekar.
