Den Cable Network, Marketing
Table of Contents Chapter 1: Introduction...... 2 Overview of industry as a whole...... 3 SWOT analysis of the organization...... 14 Competition information...... 21 Chapter 2: Literature Review...... 25 Chapter 3: Research Methodology...... 29 Advantages...... 43 Disadvantages...... 43 Design...... 45 Advantages...... 45 • Disadvantages...... 45 1. Goal or Aim of the Research...... 46 2. Usage...... 46 3. Data Gathering Instrument...... 47 4. Type of Data...... 47 5. Approach...... 47 Chapter 4: Research Findings & Analysis...... 54 Chapter 5: Conclusion and Suggestions...... 65 References...... 66
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Chapter 1: Introduction
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Overview of industry as a whole
DEN Networks Limited is India’s largest cable TV distribution company, founded and promoted by Industry veteran Sameer Manchanda. DEN serves an estimated 11 million subscribers in over 115 cities across 13 major Indian states. DEN serves the majority of cable TV subscribers in Delhi, Uttar Pradesh and Karnataka and has a large presence in Maharashtra, Gujarat, Rajasthan, Madhya Pradesh, Haryana, Uttarakhand and Kerala. DEN continues to expand its presence in India and has entered important cities and towns in West Bengal, Jharkhand and Bihar. DEN has partnered with the Star, Zee and Turner groups in the Media Pro Joint venture. Media Pro is India’s leading content aggregation and distribution Company offering over 70 leading pay TV channels including all Star, Zee, Turner and NDTV channels.
DEN Networks Limited is India's leading cable TV distribution company that claims to be reaching an estimated 13 million households across key states and cities of India by providing its Cable TV signals to Last Mile Operators, Distributors and numerous JV partners. DEN is present in 13 key states across India including Delhi, Uttar Pradesh, Karnataka, Maharashtra, Gujarat, Rajasthan, Haryana, Kerala, West Bengal, Jharkhand and Bihar. The company has a leading presence in the economically important Hindi Speaking Markets (HSM) belt and a dominant market share in its major cities of operation. The company has been one of the frontrunners in the digitization process and has over 5 million digital cable subscribers. DEN has strong presnt's in the financial capital of INDIA with its JV partner "DEN SATELLITE" in Mumbai & its suburbar city of Thane, Bhiwandi, Kalyan-Dombivali, Navi Mumbai & other parts of Greater Mumbai.
DEN also has a 50-50 joint venture with Star TV group called Star DEN which is the exclusive distributor of over 25 leading channels in India. DEN's digital cable offering, with its full feature user interface and a portfolio of cutting edge value added services is widely regarded as India's best. DEN's digital cable offering includes over 180 leading channels, a multi-genre digital music service,blog.Telly (India's first micro blogging service on TV), and interactive games. It also offers internet services in few cities in India.
Den Networks Ltd is one of the largest national cable television companies in India. The company is engaged in distribution of television channels through analog and digital cable
Page 3 Den Cable Network, Marketing distribution network and provision of internet services. They are providing cable television services in the National Capital Region of Delhi and the states of Uttar Pradesh, Rajasthan, Maharashtra, Gujarat, Karnataka, Haryana, Madhya Pradesh and Kerala. The company's digital cable offering, with their feature-rich user interface and a portfolio of cutting edge value added services is widely regarded as India's best. Their digital cable offering includes over 180 leading channels, a multi-genre digital music service, blog.Telly (India's first micro blogging service on TV) and interactive games. The company operates between one and three own brand television channels from each of their head-ends, which are telecast exclusively on their cable distribution network. These channels primarily telecast films, music, devotional programmer or local events and news. They have the rights to telecast more than 4,000 films on their network. They have obtained an all-India ISP license and have commenced a limited roll out of broadband internet services in select areas. DEN Networks Ltd was incorporated on July 10, 2007 as a private limited company with the name DEN Digital Entertainment Networks Pvt Ltd to engage in cable television distribution, broadband internet and other related business. In less than three years of operations, the company crossed the landmark on approximately 11 million subscribers. Through aggressive acquisition, it has emerged as the larges national level MSO (Multi System Operator) in India. In October 12, 2007, the company entered into a partnership with Priya Mukherjee through a partnership deed for establishing Creative Cable Network. In January 14, 2008, the company entered into a joint venture agreement with Star India Pvt Ltd and formed a 50:50 joint venture company, STAR-DEN, to operate a television channel distribution business in India, Nepal and Bhutan. In February 2008, the company launched their digital cable television services under the brand, digitally. They also obtained a non-exclusive license from the DoT to set up and operate internet services all over India. In March 2008, they imported fist set of set top boxes. In April, 15, 2008, the company was converted into public limited company and the name was changed to DEN Digital Entertainment Networks Ltd. In June 27, 2008, the name of the company was changed from DEN Digital Entertainment Networks Ltd to DEN Networks Ltd. In August 2008, the company obtained a license to operate the conditional access system in Delhi and Mumbai. During the year 2009-10, the company issued and allotted 18,567,240 equity shares of face value of Rs 10 each, pursuant to the Initial Public Offer (IPO), which were admitted for listing and trading on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) with effect from November 24, 2009. During the year, the company expanded their
Page 4 Den Cable Network, Marketing analogue cable services to 84 cities and digital cable services to a majority of cities where it present and plans to roll out digital cable television in all of the remaining cities of its operations across the country. They acquired majority stake in the business of 76 MSOs and took their affiliates count to 83. The company was awarded 'The Best Indian Cable TV MSO' at the Indian Telly Awards Function held by Indiantelevision.com in June 2010. They have also featured in the Business Standard BS 1000 annual ranking of Indian companies in February 2010 and were ranked among the Top 500 companies by revenues. In October 2010, the company through their subsidiary, IME Networks Pvt Ltd, entered into a 75-25 joint venture with BFTV, Broadcasters of the Baby First Channel, a leading international television channel for babies, toddlers and parents. The joint venture will house all rights for Baby First's businesses in India and other select territories, including the distribution of the channel and related businesses. The company intends to acquire majority stakes in established MSOs in order to consolidate their position in the states in which they already have a presence and to expand into other Indian states that have significant market potential for increased digital cable penetration and high revenue growth.
Profile of the company (History, Vision, Mission, Objectives, Functions etc)
Status of the company in general: ACTIVE
Name of the company: TECHNOBILE SYSTEMS PRIVATE LIMITED
India company code: U72100HR2011PTC042569
Physical addresses:
1. 421, Udyog Vihar, Phase IV, Gurgaon, Haryana Directors / owners:
2. MAYANK JAIN
3. DEEPTESH CHANDRA
Date of registration: 2011-03-30
Type of the company: Company limited by shares
Status of the company: Active
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Mr. Sameer Manchanda, Chairman & Managing Director
He founded DEN in 2007 with a vision to bring about a paradigm shift in India's cable TV distribution industry through consolidation and digitization. Within a few years since its formation, DEN has become India's leading cable TV distribution company and is a pioneer of digitization. He was also instrumental in the formation of Star DEN, a 50-50 J-V between DEN and the Star TV group. He was a co-founder of the erstwhile IBN18, home of CNN IBN and IBN7 and was the Joint Managing Director of the company from 2005 to 2010. He was also a founding member of the News Broadcasters Association and served as its President in 2009 and 2010. Prior to IBN18, he served as a Director on the board of NDTV Ltd. A qualified Chartered Accountant, he has over two decades' experience in the Indian media & television industry. He has been associated with the Indian television industry since 1984. He is currently a member of the CII National Committee on Media & Entertainment and the FICCI Broadcast Forum.
Mr. S.N. Sharma, Chief Executive Officer (CEO)
He is one of the founding members of DEN and his vision of growth through consolidation and digitization laid the foundation for the company. He has spearheaded the company's rapid growth with his visionary leadership and unparalleled execution abilities to make DEN the leading cable TV distribution company in India. He is a driving force behind taking the company into the digital era and in its rise as one of the leading digital TV platforms of the country.
He has nearly three decades of experience during which he has been associated with the electronic media industry for over 20 years. A veteran of the Indian cable TV sector, his involvement with the industry dates back to its infancy and he is widely regarded as one of the shapers of the industry.
Prior to DEN, he has held key positions in Hathway Cable & Datacom and IndusInd Media & Communications. He has also been associated with leading global multinationals such has Westinghouse Electric Corporation and Kent-Taylor, a part of the ABB Group during the initial phase of his career. His areas of expertise include operations, strategic planning, business development, project management and marketing & sales among others.
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He is a member of the Task Force on Digitisation set up by the Ministry of Information & Broadcasting and is a founding member and Secretary of the MSO Alliance. He holds a Bachelors degree in Electronics and Communications Engineering and a Masters in Business Administration.
Tec noble focus on understanding to its clients’ needs and delivering IT services & solutions at right value & required speed. We believe we succeed when our clients succeed by growing and outpacing their competition. By selecting Tec noble as an IT services partner, you’ll gain access to process excellence, IT technology expertise & an experienced pool of resources. Our focus is on driving business transformation through IT as a tool to help you drive genuine business results. We have helped companies in diverse industry verticals such as Automotive, financial services, manufacturing, Retail and Consumer products in their enterprise transformation, business process optimization, technology implementation, workflow design and optimization. We leverage our domain expertise, business consulting skills and technology competence to provide bespoke/custom solutions to our customers for gaining sustainable edge over competition. Our capabilities include a fully integrated approach that ensures that every aspect of organizations – people, process and technology – is fully aligned for achieving strategic business goals. Tec noble’s insights in diverse technology platforms and business verticals can help you in improving existing business processes by streamlining and automating operations on assessment of your peculiar requirements. In addition, if you are entrepreneur with innovative business idea and want to leverage technology for your solution or ISV looking for cost effective management of product portfolio, Tec noble could be your right partner. It's not just about reducing cost; Tec noble helps you drive up your revenues by helping you aggressively pursue revenue opportunities.
Vision “To be an end-to end Information Technology solutions Provider providing solutions that enhance capability of our clients to succeed in the competitive business environment.
To emerge as the leading Distribution, Marketing, Customer Services and in other words, a total “Convergence Company” especially in the areas of State of the art digital Cable TV transmission (which obviously is our main forte). Our proposed foray into the areas of Information
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Technology and Data Base Management is poised to take off into a new and un-chartered horizon for the Generation Next. Manthan endeavours to deliver enhanced customer experience through innovation, by use of cutting edge technology and by extensive knowledge dissemination to members of the partner eco-system. We relentlessly work to raise the benchmarks of customer experience in the country for all times to come. Manthan maintains high standards of social and civic responsibility, as we firmly believe that we should contribute to the society in which we operate. We aim at providing the community our technologies and solutions to support them in their growth and development.
Manthan is always committed to provide best possible Quality of Service to all our viewers. There are some differentiating factors that helped us to reach and sustain our position at the zenith.
Mission To provide our clients good quality, solution-oriented, user-centric and technology-based solutions in a cost-effective manner.
Statistical facts and information
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We initiate our coverage on Dish TV, DEN Networks and Hathway Cable & Data Comm. (Bloomberg codes: DITV IN Equity, DEN IN Equity, HATH IN Equity) with BUY ratings. We estimate an average 39% EBITDA CAGR (2010-2014e) and 9.56x Mar’12e EV/EBITDA for Dish TV, DEN Networks and Hathway. Growing Digital Pay TV Subscribers on both the DTH and Cable TV platform due to increase in digital penetration and the legitimization of Hidden Subscribers (by Local Cable TV Operators, LCOs henceforth) to drive industry revenues and profitability: We expect the penetration of TV households in India to grow from 50% in Mar’10 to 54% in Mar’14e at a 7% CAGR (2010-2014e), with TV households reaching 190 Mn in Mar’14e. In this same period, the Pay TV penetration is expected to increase from 80% (in Mar’10) to 86%, reaching 164 Mn by Mar’14e and growing at a 9% CAGR (2010- 2014e). We expect both the DTH and Digital Cable TV platform to individually experience hyper growth at a 24% CAGR (2010-2014e) .The subscriber base on the DTH platform is expected to increase from 21 Mn in Mar’10 to 49 Mn by Mar’14e and Digital Cable TV subscribers are expected to increase from 7 Mn in Mar’10 to 16.5 Mn by Mar’14e. Hidden Analogue Cable TV Subscribers by LCOs are main barrier for Pay TV industry to reach its potential: The current market size of Pay TV in India is expected to be in the range of INR 146 Bn (US$ 3.32 Bn) as of Mar’11e, whereas the actual potential for Pay TV services is INR 296 Bn (US$ 6.58 Bn). This it determines the magnitude, the opportunity and the available depth in the Pay TV subscription market in India. The wide gap is mainly attributed to the fact that of nearly 72 Mn subscribers (almost 80% of the Secondary Analogue Cable TV subscribers) as of Mar’11e are not disclosed by LCOs and ICOs (Independent Cable Operators) to MSOs (Multi System Operators). With the ongoing increase in digital penetration and regulatory pressures, we expect the gap to be reduced benefitting both Broadcasters and Video Content Distributors, such as Dish TV, DEN Networks and Hathway.
Favorable regulatory changes and implementation of TRAI’s Sunset Clause recommendations may provide further upside to our growth assumptions: We estimate a 24% CAGR (2010- 2014e) for both DTH and Digital Cable TV subscribers and we forecast the digitization process to continue over the next three to four years without any upside from TRAI’s recommendations on the Sunset Clause deadlines. If the Ministry of Information and Broadcasting (MIB) accepts TRAI’s Sunset Clause recommendations, this should further boost the growth rates of digital Subscriber and we may have to revise our growth estimates upwards.
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We believe that LCOs at some point will review their decision to digitize their existing subscribers with the help of MSOs and retain a pre-defined percentage of the ARPU or they will lose the subscribers completely to DTH operators. Certain concerns from the industry and the MIB regarding a reduction in the Basic Duty structure for imported set top boxes (STBs), a License Fee reduction and the availability of STB across India are genuine to some extent, but are miniscule considering the opportunity and depth available in the Pay TV market. Video Content Distribution companies in India are trading at attractive valuations: Global DTH and Cable TV/MSOs are expected to grow at a 5-10% EBITDA CAGR (2010-2013e), while we expect Dish TV, DEN Networks and Hathway to grow at a 24-60% EBITDA CAGR (2010- 2013e) due to strong growth from both DTH and Digital Cable TV subscribers, from a small existing subscriber base. Currently Dish TV, DEN Networks and Hathway are trading between 5.0x and 16.0x Mar’12e EV/EBITDA, which is marginally more expensive than global peers, but they look very attractive on a growth-adjusted basis.
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