Indepth Analysis of the D2H Industry on Behalf of Videocon and Handling
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WELINGKAR INSTITUTE OF MANAGEMENT RESEARCH & DEVELOPMENT SUMMER PROJECT ON Indepth analysis of the D2H industry on behalf of Videocon and handling Brand promotions and events for Planet M (Research on “India has 6 major DTH players whereas the world over every country has approx 2. Can the Indian market absorb all?” done to develop the Videocon brand name Handling Planet M brand promotions and a major event called “Mirchi Create With Agnee” in collaboration with Radio Mirchi) BY ESHA SYLVIA BAILEY PGDM 2009 – 11 Marketing TRIMESTER IV ROLL NO 9 1 Table of Contents Industry Overview ............................................................................................ 3 History: .................................................................................................... 3 GLOBAL SCENARIO ....................................................................................... 5 Current Indian Scenario:................................................................................... 6 VIDEOCON INDUSTRIES LTD. ........................................................................... 9 Objectives of the project: .................................................................................... 13 EXECUTIVE SUMMARY ................................................................................. 14 Porter‘s Analysis of the DTH industry: ..................................................................... 16 SWOT Analysis ............................................................................................. 18 Concept of growth share matrix (BCG model) ............................................................. 20 List of major players in the industry ..................................................................... 21 Brief profile of players in the industry ................................................................... 21 Cable Vs. DTH - An Overview of the World Scenario .................................................. 26 GROWTH OF THE INDUSTRY ........................................................................... 30 Comparative analysis of the DTH players ............................................................... 35 TRAI Rules .................................................................................................. 46 Problems experienced with Videocon D2H and their solution ............................................. 48 CONCLUSION: ............................................................................................ 50 PLANET M ................................................................................................... 51 HISTORY: .................................................................................................. 52 TASKS DONE DURING THE INTERNSHIP ............................................................. 55 IN DEPTH STORE ANALYSIS ......................................................................... 63 CONCULSION: ............................................................................................. 68 REFERENCES ................................................................................................ 69 2 Industry Overview History: The history of Indian Television dates back to the launch of Doordarshan, the Country‘s national television network in 1959 when the transmission was in black & white. The 9th Asian games, held in 1982 in the country‘s capital New Delhi, heralded the mark of colour television broadcast in India. In 1991, Indian economy was liberalized from the license raj and major initiatives like inviting FDI, deregulation of domestic businesses emerged. This led to the influx of foreign channels like Star TV and creation of domestic satellite channels like Sun TV and Zee TV. This virtually destroyed the monopoly held by Doordarshan. In 1992, the cable TV industry started which changed the way the average Indian watches television. Every city in India had a new breed of entrepreneurs called as cablewalas or Local Cable Operators (LCO) taking in charge of distribution. Since this was a disorganized sector carrying new channels on the existing infrastructure required new investments which the operators were reluctant to make. This led to the emergence of a new breed of firms called as Multi System Operators (MSO) who had heavy financial muscles to make capital investments and liaised between the cable operators and the channels. MSOs provide the feed to the local operators for a fee. In 1995, government felt the need of regulation in Cable TV and passed the Cable TV network (Regulation) Act. This was also the time when the state owned Doordarshan and All India Radio came under a new holding called as Prasar Bharati to give them enough autonomy. The LCOs reported a lower number of connections where as the broadcasters demanded a higher rate. MSOs were finding it difficult to operate under these conditions. This led to an amendment of the Cable TV networks (Regulation) Act in 2002 to provide Conditional Access System (CAS). With CAS, the last mile distribution could be addressable with accuracy and digitalization of broadcast was also possible. CAS was rolled out in 2003 starting from Chennai and later to parts of Delhi, Mumbai and Kolkata. On the DTH front, TRAI issued the guidelines for operating DTH. Country‘s first DTH license was awarded to Dish TV in 2003 which started operations in 2004. Prasar Bharati also started its product DD-Direct+ 3 In 2007, TRAI proposed a new initiative by called ―Headend-In-The-Sky (HITS)‖ model as an alternative to the existing cable distribution. Instead of the MSOs providing the bundle, there will be a single HITS operator who will prepare the bundle of channels and beam it to the Headend in the satellite. With the average Indian getting younger, and hence more likely to spend on nonessentials, the entertainment industry has the potential to grow explosively in the future. Now the industry is ready to enter a second stage of growth powered by the twin engines of technology (availability of quality infrastructure and the accelerated penetration of digital connectivity) and an enabling regulatory environment. 4 GLOBAL SCENARIO "India will become the largest DTH market in the world in terms of subscribers by 2012, overtaking the United States" India is poised to become the world's largest direct-to-home (DTH) satellite pay TV market with 36.1 million subscribers by 2012, overtaking the US, a report by research firm Media Partners Asia (MPA) says. In its report titled 'Asia Pacific Pay-TV and Broadband Markets 2010', MPA said India's DTH subscriber base will increase from 17 million in 2009 to 45 million by 2014 and 58 million by 2020. The industry sales is expected to grow to $12.1 billion by 2014 and touch $18.5 billion by 2020, it said adding that most DTH players will start making money after 2013. The DTH operators today are toiling under a heavy tax regime and subsidies given to customers on the new set-top boxes. The Indian pay-TV sector (DTH and cable) generated sales of $6.5 billion in the last financial year ended March 2010, which is expected to grow to $12.1 billion by 2014 and $18.5 billion by 2020, MPA said. "We are more positive on India's DTH opportunity than previously, especially when anchored to consolidation and improved pricing power with continued growth," MPA Executive Director Vivek Couto said. "We suspect the DTH market will consolidate from six to four platforms within three to five years, and the estimate four will be making money at the EBITDA level by financial year ended March 2013," he added. MPA expects competition to remain intense as the tug-of- war for customer acquisition shifts to regional markets. "The major risk to all our growth assumptions is regulation, which continues to commoditise and destroy industry value," Couto said. Pay-TV subscriber base is projected to grow from 105 million in 2009 to 149 million by 2014 and 173 million by 2020. While cable will retain 70 per cent market share by 2014, it is expected to decline to 64 per cent by 2020, with DTH scaling up to almost 35 per cent share in the long-term. 5 Current Indian Scenario: The Direct to Home (DTH) Industry in India is in the throes of multifarious challenges and opportunities. The big game‟ is all about shaping up grandiose plans to master the winning rules to garner as much portion of the Indian DTH pie as possible by a handful of players. Since the DTH space denotes „big value‟, akin to the space occupied by television and telephony, inter- firm rivalries have thrown up price wars, discount schemes, procurement of transponders, ambitious targets for improving the subscription base, popular bouquet of channels, set top boxes with superior quality of videos, improving content, etc as a desperate means to entice the Indian viewer. A neat 20 per cent annual growth is being witnessed in the DTH sector in India with over 16 million households having digital pay-TV. In the early 2008, five major players, Zee‘s Dish TV, According to Harsh Bijoor, a Tata Sky, Reliance ADAG,Sun Direct and Bharti brand consultant, “Since Dish Telemedia formed an umbrella body – DTH TV, the biggest market player Operators Association of India (DOAI). Dish TV is on the Indian soil, has not the largest DTH provider with a subscriber base of scraped even five per cent of around 5 million, Tata Sky, a DTH joint-venture the pie, there is plenty left for Company between Star (owned by Rupert Murdoch) other players to eat.” and the Tata Group (20:80), now has around 3.4 million connections and the