Consolidation predicted for India pay-TV

India’s pay-TV sector is expanding fast helped by new DTH players entering the market. “Consolidation is inevitable,” says a new report.
indiadishtv.jpgA study from Media Partners Asia (MPA) forecasts that India’s vibrant TV market will grow by 16% between this year and 2012. That prediction is just slightly less than the most recent PricewaterhouseCoopers report, which suggested a CAGR of some 18% over the same period.

Today’s six DTH players (Zee’s Dish TV, TataSky, Bharti, Reliance’s BigTV, Sun and Doordarshan) will have reduced to three by 2012, says MPA, although looking after a greatly expanded market of 25m DTH homes (last year’s end total was about 3.2m).

ARPU might also be about to be squeezed, from Rs200 (about $5 a month) to nearer Rs180 ($4.50) as greater competition leads to lower prices per home.

“We have downgraded our estimates on subscription revenues for TV channels in India by about $1 billion because of the effects of price regulation in the medium-term as well as the increasing emphasis on lowering content spend by DTH and cable platforms due to aggressive price competition,” Vivek Couto, executive director, MPA said.

The MPA study says that India’s total pay-TV market, when cable is included, will expand from 82m (at end of 2007) to reach 137m by 2012.

Already testing is Reliance’s BigTV, promising it will go fully live by the end of March with an initial 100 DTH channels – and all in MPEG4 (a necessary evil because of limited transponder capacity over India). BigTV is itself predicting winning 10m subs over time, and another 15 from cable distribution.