FICCI-KPMG-Report-13-FRAMES

Recommendations

Info

22 The power of a billion: Realizing the Indian dream C&S subscribers by platform The Indian market is large enough to provide significant growth opportunities for digital cable as well as DTH service providers. No. of Subscribers “ “ End customer ARPUs have not gone up just yet. It will take up to 1-2 years for ARPUs to go up. - N P Singh COO, Multi Screen Media Private Limited Source: KPMG in India analysis, Industry discussions conducted by KPMG in India Note: (1) DTH figures are net of churn (2) Figures are rounded to the nearest integer and may not add up exactly to column totals “ Indian consumers need to pay more for television content. ARPUs need to go up. Monthly ARPUs in developed markets are 5-6 times that of a single multiplex movie ticket, while in India that ratio is close to 1. This proves that television is undervalued as a medium by the consumers. “ - Asheesh Chatterjee Chief Financial Officer, Reliance Broadcast Network Limited © 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. ARPUs gains to materialise, but in the medium term With the race to acquire subscribers and pending deployment of channel packages, ARPUs continue to be low. This is expected to continue as digitisation progresses across phases. However, deployment of channel packages across cable customers over the next 3 to 4 years is expected to lead to significant increase in ARPU. In addition to ‘value’ packs, MSOs may look at creation of ‘premium packs’ for top paying subscribers leading to increase in ARPU levels. Digitisation will also provide an opportunity for subscription-based niche content which will lead to additional revenue gains. Further, rising penetration of HD services is expected to provide a boost to ARPU. ARPU per month “ Core services will continue to drive the DTH growth in India for next few years and HD services will be a key revenue driver. Apart from this, niche subscription driven channels and innovative pay-per-view kind of models will drive ancillary revenue. However we are still further away from bundling of DTH and broadband services. 2012 2013P 2014P 2015P 2016P 2017P Cable 166 174 194 227 260 289 DTH 170 180 209 236 266 293 Source: KPMG in India analysis, Industry discussions conducted by KPMG in India “ - Rohit Jain Deputy CEO, Videocon D2H
The power of a billion: Realizing the Indian dream 23 Investing in TV distribution – Why India is attractive The size of India’s E&M opportunity was never in doubt. The only factor that marred the attractiveness of this opportunity was policy and its implementation. With distribution primarily in analogue mode, the subscription from the customers, of which only a small percentage was accounted, did not find its way back to the stakeholders who created the content and facilitated its movement, including the government. Hence this prevented the content creators from investing in what they created, the platforms from upgrading their delivery mechanism and the government from rationalizing taxes. DTH did set the ball of addressable system rolling, however its expansion was stunted due to competition with analogue cable whose cost structure was completely different due to under-declaration. The fact that with a third of pay TV industry’s subscribers, DTH contributes more than cable to the broadcasters as well as to the government is testimony to the differential cost bases between the platform types. Introduction of DAS (Digital Addressable System), in phases is expected to change this scenario. Successful implementation in Delhi and Mumbai has given the government the confidence that implementation can happen without the possibility of public unrest. It has also given the vested interests, who were hitherto working against its implementation, the clarity that Digitisation is now only a matter of ‘when’ and not ‘whether’. Implementation of addressable systems will make the entire E&M ecosystem healthy with every component sufficiently profitable and capable of investing to attract, retain and extract more value from its subscribers. Hence the low penetration levels will demonstrate high levels of growth in the short run after adequate infrastructural investments are made. In the long term, with a large revenue base and reduced capex intensity, the sector is likely to give fair returns to the investors. However, some quick corrections are required to give the potential investors some confidence to invest in the cable businesses. Inter alia, these include: • Infrastructure, processes and trained people to manage customer interactions for creation and updating of customised packages • Field service infrastructure to manage installations and repairs within acceptable time frame • Ability to attract and retain experienced management from relevant industries • Build a brand of service and value All of this is possible only if the businesses get to scale and create contiguity versus the current sub scale and fragmented state. I am sure everyone of the large cable platforms are planning their moves to achieve all of the above and more so that we move towards a profitable Entertainment & Media ecosystem which attracts adequate FDI. The laws have been created to support the moves. - Harit Nagpal Managing Director & CEO, Tata Sky Broadcasting and Content production Introduction The television advertising industry continued to be under pressure due to the soft global and domestic economic condition. This resulted in muted growth, particularly in the first half of 2012. On an overall basis, the total TV advertisement market is estimated to have grown around 8 18 percent in 2012, lower than industry expectations. In comparison, growth in the TV advertisement market was estimated to be 12 percent in 2011 and 17 percent in 2010. “ “ Adsales growth has been soft in 2012. 2013 will see better growth, but will not be a blockbuster year. - Rohit Jain Deputy CEO, Videocon D2H Unless otherwise noted, all information included in this column/ article was provided by Harit Nagpal. The views and opinions expressed herein are those of the authors and do not necessarily represent the views and opinions of KPMG in India. 18. Industry discussions conducted by KPMG in India “ 2012 has been the toughest year in recent times; in many ways, it was even worse than when the subprime crisis hit in 2008. At least then, the sentiment was still bullish coming on the back of a few years of robust growth. This time, the mood is a lot more downbeat. Everyone is going into capital conservation mode. Having said that, in 2008, the perception of things to come was much worse than reality, and ad spends were perhaps cut down a lot more than was warranted. “ - Uday Shankar CEO, Star India © 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Page 1 and 2: This heading style is set in Univer
Page 3 and 4: The power of a billion Realizing th
Page 5 and 6: Radio too, is set for the - roll ou
Page 7 and 8: 42 Print Regional to the rescue 58
Page 9 and 10: 01 The power of a billion: Realizin
Page 11 and 12: The power of a billion: Realizing t
Page 15 and 16: 02 Introduction The power of a bill
Page 23: The power of a billion: Realizing t
Page 59 and 60: 57 Hiring and retaining talent The
Page 75 and 76:
The power of a billion: Realizing t
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Page 87 and 88:
Page 89 and 90:
Page 91 and 92:
05 The power of a billion: Realizin
Page 93 and 94:
Page 95 and 96:
The smartphone is a very sophistica
Page 97 and 98:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Page 105 and 106:
Page 107 and 108:
Page 109 and 110:
“ With brand advertising gatherin
Page 111 and 112:
Music The success of the iTunes mod
Page 113 and 114:
Page 115 and 116:
Page 117 and 118:
06 Round up of the year that was Th
Page 119 and 120:
Page 121 and 122:
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
Page 129 and 130:
Page 131 and 132:
Page 133 and 134:
Page 135 and 136:
Page 137 and 138:
Page 139 and 140:
Page 141 and 142:
Page 143 and 144:
Page 145 and 146:
FICCI 2013 143 “ The Amendments t
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
Page 153 and 154:
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
© 2013 KPMG, an Indian Registered
Page 161 and 162:
09 Outlook for the year The power o
Page 163 and 164:
Page 165 and 166:
Page 167 and 168:
Page 169 and 170:
Page 171 and 172:
Page 173 and 174:
Page 175 and 176:
11 Technology The power of a billio
Page 177 and 178:
Page 179 and 180:
Page 181 and 182:
Page 183 and 184:
Page 185 and 186:
Page 187 and 188:
© 2013 KPMG, an Indian Registered
Page 189 and 190:
Page 191 and 192:
Page 193 and 194:
Page 195 and 196:
Page 197 and 198:
Page 199 and 200:
Page 201 and 202:
Acknowledgement We acknowledge the
show all

FICCI-KPMG-Report-13-FRAMES

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?