Why should television channel providers in India worry about their subscribers in the next 5 years?

Television is undoubtedly the most prominent form of entertainment in every household. Barring the underprivileged ones at the bottom of the food chain, even the working class from the lower section of the Indian society boasts of having a television set at home. And to cater to a population of 1.23 Bn, there are over 500 television channels in different languages.

2012 (All figures in Mn) 2013(All figures in Mn)
Percentage change
Total Households 231 234 +0.01
Households owning a TV 148 153 +4
Cable & Satellite enabled Households 126 140 +11
Digital connection enabled Households 42 59 +40

The table above shows the change in trends of TV owners as compared to last year, with data collected by TAM media research. Although initially Government’s move to regulate the subscription of TV channels by enabling CAS (Cable Access System) received some resistance, but the number of DTH subscribers is still seeing a phenomenal growth.

However this pasture is not going to stay green for another coming decade. India is slowly but gradually shedding off its ‘developing country’ status. With the recent Mars mission launch, it isn’t right to underestimate the country’s growth. This comes in line with the increasing penetration of Internet users in India, and this is why channel operators need to gear up.

According to the latest report by IAMAI, there are over 205 Mn Internet users in India, that is roughly a 40% growth from 2012. Also the number is expected to grow further to make India  the second largest Internet base in the world in terms of active Internet users, right below China, by June 2014.

Even though broadband penetration isn’t very high (over 15 Mn fixed connections), due to mobile and mobile internet penetration, the number of Internet users is rising. And video streaming is one of the most frequently used services on the Internet.

Americans are actually already switching to streaming services and DVDs, from cable and satellite TV. We can’t really say exactly when that will happen in India considering 90% of the population doesn’t have Internet access currently.

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But consider this, in a population of 1.23 Bn, 153 Mn households have at least one television set, and it is safe to assume that almost all of 205 Mn Internet users are included in these households, so even if half of these users switch from TV to online video streaming for entertainment, the channel owners and cable operators have a reason to worry about.

There is no Netflix in India, but there are many other options available- BigFlix for movies, Boxtv for shows and movies and most importantly YouTube for everything. But before discussing these channels in detail, there is one important platform to be mentioned – Mobile videos.

Airtel recently launched the concept of providing videos to its users for just 1 Re. The users could choose from a catalog of over 35,000 videos from categories like entertainment, sports, music, devotional etc. The only requirement, besides being an Airtel customer, was to have a GPRS enabled cell phone. Now, Reliance is offering the same service to its subscribers.

The service is popular, and surprisingly 80% of the streaming is done by feature phones, and not the expensive smartphones. Although on a small level, this is still one example of video-on-demand picking up traction in India.

Now let’s consider the main platform for video streaming-Youtube. As mentioned above, there are streaming channels like BigFlix and BoxTv in India, but they offer only paid videos, and movies rather than shows. If the general population was so keen on paying for all the content they view online, video piracy and torrent downloads wouldn’t have existed. So, to give the consumers best of everything, Youtube comes into the picture.

Not long ago, Youtube users used to upload movies and shows themselves after dividing those videos into several parts (Youtube had a 10min limit till a couple of years ago) and due to copyright infringement those used to be taken down. But now channel producers and movie production houses are themselves uploading shows and movies on YouTube, to be watched for free or through pay per view.

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Above is a the list of most popular Youtube channels in India, taken from social media aggregator Socialbakers. And clearly, the most popular TV channels in India- Star Plus, SET, Zee TV and Colors are leading the charts online too. Sony alone has over 2.5 unique subscribers.

And not just these four, from the oldest episodes of popular shows to the latest just released ones, all the television channels are uploading almost all the episodes on this video platform for free. In a way it is great because they are staying up with the trend and allowing users to view the missed episodes online, but on the other hand they themselves are risking their TRP ratings.

If people are able to view all the content for free they might find the monthly subscription cost, particularly of expensive premium channels, a waste of money. However high maybe the price of unlimited high speed broadband in India, the consumers who pay for both the Internet and television monthly, may find switching over to streaming more cost effective.

This format may remind some of IPTV (Internet Protocol Television) where both Internet access and television services are provided by a common Internet protocol suite. This service is provided by Airtel, BSNL, Reliance etc. but it still hasn’t gained as much traction as it should have.

Continuing on to the subject of people gradually switching to streaming, the infographics below strongly support this trend. The number of subscribers of tv channels online is relentlessly rising. The data below is for the last 6 months.

And it isn’t just limited to TV shows. Well-known movie production houses and media channels like Rajshri, Yash Raj Films, T-series, Shemaroo and so on, are showing famous Hindi movies for free on Youtube. This is in addition to YouTube’s movie service that, like Google PlayStore, charges users for some premium movies.

Streaming shows and movies online also comes with the benefit of around the clock access. Users can view content anytime, anywhere on the go. DTH providers are surely giving the subscribers an option to pick the channels of their choice, but Internet streaming enables people to choose which particular shows and episodes in those channels they want to watch.

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Tata Sky has recently introduced the concept of ‘Everywhere TV’ with Tata Sky app for iOS (For Android, the app works as a tv remote). The idea behind this is to make television channels available on mobile devices, such as smartphones and tablets. Active Tata Sky Subscribers will be able to watch select Live TV channels, Catch Up TV videos and Video on Demand videos (“VoD”) on their iPhones and iPads through the Tata Sky Mobile app. This is an excellent example of how DTH providers are evolving with consumer demands, but again they are affecting TV viewership.

Content-Distribution-Mechanism-Then-and-Now

So now we have television shows and movies available on several platforms – TV, Internet and mobile. What is now needed is for the content providers i.e. production houses behind TV channels, to move beyond the ‘idiot box’ and go where the viewers are going. A computer could provide a wide range of entertainment services, and now even connect to any TV via HDMI ports, but cable or satellite television has limited conventional functionality.

Although, currently the cable and DTH channel providers may not be noticing the effect of the change in preference of a small percentage of population. And due to low literacy and high poverty in India not many are able to afford Internet enabled devices. But this is changing, with even the Government distributing tablets and laptops to bridge the technological gap.

In a few years time, with rapid Internet penetration, they will start feeling the heat, particularly when following the western trend, Indians will start shunning the cable tv for on-demand streaming services. This is still a future forecast, so it is not too late for television channel producers and providers to buckle up and work on a future strategy, to keep up with the ever-changing consumer tastes.

 To contact the author, write to sugandh.dhawan@wirefootindia.com

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