Cable TV industry in India : Opportunities & Risks

The illustrious realm of the Cable TV industry in the vibrant nation of India found themselves navigating tumultuous waters, grappling with a series of challenges and standing at a crossroads, as a multitude of captivating alternatives, including the omnipresent mobile phones, the mesmerizing OTT platforms, and the enchanting Free Dish, captivate the discerning eyes of customers. In this shifting landscape, cable operators, driven by an unyielding quest for growth, embark on a resplendent journey to explore new horizons and redefine their essence.

 Nearly a decade ago, when the government mandated the digitization of cable TV, many subscribers, reluctant to invest in new set-top boxes, made the difficult decision to abandon their subscriptions. Adding to their woes, the year 2019 witnessed the implementation of the Telecom Regulatory Authority of India's (TRAI) New Tariff Order, which further complicated channel selection and resulted in escalated prices.

Statistics from the Broadcast Audience Research Council (BARC), a joint body formed by the representative of Indian Broadcaster (IBDF) advertisers (ISA), and advertising and media agencies (AAAI), reveal that in 2020, a staggering 210 million households in India possessed a television set, signifying a notable increase of 6.9 percent from 2018, when the count stood at 197 million TV homes. However, despite this rise in television ownership, the number of cable-connected households has witnessed a decline, dwindling from 115 million to 100 million. A report issued by the esteemed credit rating agency CRISIL attributes this drop to a substantial surge in direct-to-home (DTH) subscriptions during the fiscal year 2020. Cable TV subscribers sought refuge in DTH services following the implementation of the New Tariff Order, as cable operators grappled with the formidable challenges of integration and rollout.

By the end of 2020, India boasted approximately 70 million DTH customers, supplementing this figure with an estimated 40 million subscribers of DD Free Dish. In contrast, the cable TV segment's share of the overall television subscriber base has witnessed a steady decline, plummeting from 63 percent in fiscal year 2015 to 43 percent in fiscal year 2020.

 The advent of pricing parity has yielded a noteworthy consequence — a substantial increase of 30-35 percent in cable TV tariffs, thereby eroding the once-coveted price advantage it enjoyed over DTH services. Consequently, the average revenue per user of DTH and cable TV has swiftly converged, accentuating the challenges faced by cable operators in maintaining their market position.

In essence, the Indian cable industry finds itself navigating through turbulent waters, grappling with shifting dynamics and a decline in subscribership as the allure of DTH services and regulatory changes have reshaped the television landscape.

With increasing options like smart phone, OTT platforms and Free Dish capturing customers’ eyeballs, cable operators are looking at new ways to grow.

Recognizing the enchanting allure of the internet as a cornerstone of their offerings, the industry deftly adjusts its course, witnessing a gradual metamorphosis in video consumption patterns. As viewers progressively gravitate towards the immersive realms of streaming services, traditional TV channels find themselves relinquishing their lofty positions. Thus, the venerated cable companies, poised for reinvention, ardently embrace the vast expanse of the internet, unfurling a kaleidoscope of innovative products and services surrounding the ethereal domain of internet connectivity.

Like a mesmerizing tapestry woven with the threads of potential, the television industry in India sets its sights on a splendid future. Revenue projections, akin to a symphony of financial brilliance, foretell a magnificent journey, where growth shall dance gracefully at an annual pace of seven percent, unveiling the tantalizing sum of Rs 84,700 crore by the year 2023. Emboldened by this prophecy, the cable industry, like an intrepid explorer, seizes this opportune moment to entwine itself evermore intimately with the tapestry of households, endowing them with a cornucopia of related services. This strategic maneuver aims to amplify its esteemed share in the bountiful tapestry that is the television industry, painting the vibrant canvas of success with strokes of ingenuity and unwavering determination.

Disclaimer : The views and opinions expressed in this publication are those of the authors and do not necessarily reflect the official policy or position of any organization.