Big 4 exit from DD Free Dish: Who gains what

The decision of leading broadcasters like Star India, Sony Pictures Networks India (SPNI), Viacom18 and Zee Entertainment to remove their Hindi GECs from free direct to home (DTH) platform DD Free Dish will have major ramifications for the TV broadcasting sector, say experts.

One, it will help smaller free-to-air (FTA) channels on DD Free Dish to grow their viewership and ad revenue. Two, it might take some sheen off DD Free Dish offerings and help private DTH operators to draw some of the free platform's customers into the pay fold. Three, it will help the broadcast sector to arrest the decline of pay universe and protect their subscription revenue in the short to the medium term.

With Star Utsav, Zee Anmol, Colors Rishtey, and Sony Pal deciding not to be on DD Free Dish, FTA GECs like Dangal, Shemaroo TV, The Q India, and Azaad TV will hope to fill in the void left by these channels. The development also provides an opportunity to these channels to augment their content offering for the 40+ million strong DD Free Dish customer base.

A media analyst, on condition of anonymity, said that the Indian Pay-TV universe has shed 9 million customers in the last two years due to the pandemic. The availability of options in the form of OTT and DD Free Dish has made it easier for pay-TV customers to shift to alternative platforms.

"The pay universe is down by about 6 million TV homes in 2021 and by about 3 million in 2020. In the last two years, there has been a deduction of 9 million Pay-TV homes. I wouldn't say that the decline in pay universe is the only reason for the exit of Hindi GECs from DD Free Dish because it was also about differentiated content offering. The broadcasters were airing one-year-old content. By putting content on DD Free Dish, the broadcasters were following a windowing strategy," the analyst said.

He further stated that DD Free Dish, with its 40 million base and growing, is here to stay with or without the channels owned by the big broadcasters. He also points out that there is a possibility of some customers moving to Pay-TV platforms.

"The price-conscious customers will not move from DD Free Dish, but some customers might move to Pay-TV since they got hooked to these channels. Even if 10-15% of customers move from DD Free Dish to pay platforms that will more than make up for the losses suffered by the Pay-TV industry in the last two years. So, 15% of 40 million is 6 million, and if this happens, it will be back to normal. That said, free TV is here to stay because there is a segment of our country that does not want to pay, and they will never pay for any content," the analyst added.

He also feels that the ad revenue of top broadcasters could see a dip. The four channels were collectively earning anywhere between Rs 1000 and 1200 crore. "The broadcasters are hoping to make up for that loss through subscription revenue," the analyst said.

According to a veteran media executive, the decision to remove channels from DD Free Dish has been taken in distress due to changes in the distribution landscape. He also said that the decision by big broadcasters doesn't augur well for the broadcast sector which is facing a lot of competition from digital content platforms.

"Pay-TV platforms have been losing customers to OTT at the top end and DD Free Dish at the lower end. But DD Free Dish is ensuring that those customers who can't afford Pay-TV services don't move out of the TV universe. Customers today have a plethora of options as far as content viewing is concerned. If DD Free Dish's offering becomes weak and Pay-TV services get costlier, then these customers always have the option of consuming content on YouTube. Weakening DD Free Dish might result in customers moving to YouTube for free content," the executive said, requesting anonymity.

The executive also believes that the absence of these four channels will not have a major impact on DD Free Dish as it has become too big to fail. He also stated that the broadcasters are barking up the wrong tree by removing content from DD Free Dish. He contended that the broadcasters should think of launching dedicated offerings for the FTA audience and not leave it open for other players to come and grab the market.

"Even OTT has both types of models that are SVOD and AVOD. There is a need to have a dedicated offering for this segment of the market that wants free content. Even DTH operators can look at different offerings for pay and free customers. This move will help DTH platforms to re-acquire DD Free Dish customers. Now the question is how big is the subscription revenue gain for which broadcasters are willing to lose ad revenue that will happen due to a likely drop in viewership of these channels," he added.

He concurred with the view that the entertainment channels that remain on DD Free Dish will stand to gain. "This happened last time around also when these channels had moved out. Dangal was a major gainer because it was the only sizeable GEC on the platform. The exit of these four channels will provide an opening to smaller channels on DD Free Dish. It's not that Star, Sony, Viacom18, and Zee channels will lose a lot of ad revenue, but there will be some reduction. Some of the advertising might also move to pay GECs," the executive averred.

Goldmines Telefilms CEO - Broadcasting Joy Chakraborthy feels that the smaller networks will benefit from this development. The company operates two Hindi movie channels Dhinchaak and Dhinchaak 2. "Big 4 GECs vacating DD Free Dish will make life interesting for others and especially channels that have sticky content. GECs that have original content would benefit, but I don't think they have that much original content. I am confident that the Hindi movie genre would benefit. I am very confident our Hindi movie channels which are market leaders by a huge margin and give so much compelling content will add many more viewers," said Chakraborthy.

The Q Co-Founder and MD Sunder Aaron believes that individual channels will see an improvement in their viewership share. He also added that the broadcasters might look at filling white spaces on the DD Free Dish. "Naturally, there will be an upside just like Dangal saw a growth when these same channels had pulled out from DD Free Dish in 2019. We will see an uptick and that will allow us to do a little bit better for our advertising clients and sponsors. It also allows us to improve the channel. Our strategy has always been to be widely available as a free channel," he stated.

Concurring with the analyst quoted above, Aaron said that there will be some subscribers who will shift to the pay-TV platforms. He added that this will not have much of an impact on DD Free Dish which has had a phenomenal run in the last three to four years. "DD Free Dish trajectory will continue to be positive due to the presence of many other offerings on the platform. Why would customers suddenly give up on something free?"

Aaron noted that the big broadcasters have taken this decision to protect their subscription revenue which has been under pressure in the last few years. "As an industry, the pressure was on the big broadcasters to preserve their subscription business. It was also important for the broadcasters to keep the distribution platforms happy. It preserves our industry on another level by bringing a balance."

He pointed out that India is a unique market with different sets of customers. According to him, there is an audience set that is spending money on OTT and streaming and therefore doesn't want broadcast television or doesn't want to pay for it. "So they want to satellite service that is free and combine that with what they are getting on streaming and OTT. That could be a socio-economic class that is higher than what we expect."

On the likely loss for top broadcasters, Aaron said that the advertisers will take note of the changing dynamics. "Not all of them are FMCG clients who are looking for mass audiences. Many advertisers are also looking at particular psychographics when they are doing their media planning, and they know that some of those viewers may follow those channels. While channels that remain on DD Free Dish will see an increase in their ad revenue, but those channels are not going to suffer a lot as their viewership will continue to grow on other platforms."