It’s finally happened. The TATA-STAR Direct-To-Home foray has received a go-ahead from the Ministry of Information and Broadcasting, and Space TV is now set to invade drawing rooms across the country. The only private player in the DTH market, Zee’s Dish TV, now has to look at a market with a serious competitor – but can it take advantage of the monopoly it enjoys till Space TV’s launch, slated for the last quarter of the year? The Sun network, too, has been issued a Letter of Intent, and, at the time of going to press, their roll out plan and strategy is unclear. A presumption that Sun will focus on their strength, South India, will not be a misplaced one.
While Space TV is an 80:20 Tata: Star joint venture, one can expect that the project will draw heavily on the strengths of the respective partners. And the 20% owner brings some enormous experience and learnings to the table, stemming from the Sky Digital experience in the UK.
Vikram Kaushik, CEO Space TV, was near monosyllabic in his responses to our questions, except when it came to the product differentiators – clearly strengths that come from both partners in the JV. Despite Dish TV’s near monopoly in the DTH market till now, a confident Kaushik projects that Space TV’s DTH service “is set to become India's largest digital television platform, offering consumers a wide array of programming choices including new channels and interactive features and superior picture and sound quality. We will be able to share details closer to the launch." And moving from content to technology, Kaushik underlines that "both partners- TATA and STAR -- are fully committed to invest in building a high quality digital infrastructure in the country to offer a world-class television viewing experience to Indian households."
It is a marriage made in heaven - and the timing couldn't be better. And as with any marriage, the lineage counts. The Tata brand enjoys considerable goodwill all over India, be it rural or urban, and Tata's recent successes with Tata Motors and Tata Indicomm have made the brand younger and more vibrant. As far as Star is concerned, they are (for some time now) clear market leaders and the brand is a trusted one in urban India. And with Kaun Banega Crorepati set for a new innings, the brand will be buzzing with renewed vigour. For more, go to STAR's lineage, and you find Sky, a company which has changed the way UK watches television; the way advertisers interact with consumers, and the way business plans for TV channels are written.
However, Dish TV doesn't seem to be too fazed by the Space entry. The country's first DTH operator claims a subscriber base of 200,000 - a miniscule number considering their near monopoly advantage. If that's all the penetration that has been achieved, is there a market for more than one player? Ashish Kaul, Vice President, Corporate Brand Development Group, Zee Telefilms, thinks there is. "It's good for the market. We have always believed that India is a place where multiple DTH ventures can be extremely profitable and successful also," he feels.
They will indeed, or neither Zee nor STAR would have ventured into this area. And it has far more potential than the Dish TV subscriber figures suggest. Consider the current revenue break up of Sky in the UK:
Only 9% of the revenue for 2004 came from advertising sales - a mere 312 million pounds of a turnover of 3656 million pounds. And the turnover from DTH operations? A whopping 2660 million pounds!
Is this a pointer to the way the revenue pie will be divided in India once DTH is established? Kaul thinks not, while warning that "One mistake which people tend to commit is when they compare the DTH market in India with the market in the other parts of the world. Our market is very different from the market world over."
To read the entire story, grab your copy of Impact Advertising and Weekly magazine issue dated May 23-29, 2005
