Deviprasad Goenka Management college of Media Studies http://www.dgmcms.org.in/ Subject:BRAND BUILDING Lesson : Cable & Satellite Television Faculty Name: Vishal Desai

1. CABLE & SATELLITE
TELEVISION

2. Source : KPMG FICCI Frames Report
2014
Year Size (INR)
2006 183 billion
2008 241 billion
2014 479 billion
2018(P) 885 billion
CAGR : 16 % apprx

3. Advertising v/s subscription revenue(INR Billion)
2014(E) 2018(P)
Advertising &
Sponsorships
152 (32 %) 253 (28%)
Subscription 327 (68%) 632 (72 %)
Total 479 (100%) 885 (100%)

4. Value Chain
Content Producers
Broadcasting Channels
Distributors (Multi Service Operators & Local Cable
Operators)
Subscribers

5. Genres of channels
 GEC
 News
 Sports
 Music
 Movies
 Lifestyle
 Cooking
 Shopping
 Kids
 Others

6. No. of Channels
 1991 – 05
 1993 – 13
 1996 – 66
 2000 – 130
 2004 - 200
 2007- 363
 2011 - 623

7. Facts
2013
 161 million TV households in India – 60% penetration
 139 million C&S households – 87% penetration
2018 (P)
 191 million TV households – 78 % penetration
 181 million C&S households – 95 % penetration
Source : KPMG FICCI Frames Report 2014

8. TV penetration in various
countries
 India- 60%
 Indonesia-78%
 China-98%
 Brazil- 90%
 Germany- 97%

9. ARPUs per month (Average Revenue
Per User)
2012 2013 2014 2015 2016 2017
Cable 166 174 194 227 260 289
DTH 170 180 209 236 266 293
Monthly ARPUs in developed markets are 5-6 times that of a single multiplex
movie ticket, while in India the ratio is close to 1

10. No. of C&S subscribers (Million Households)
2011 2017 (P)
Analog 73 0
Digital 5 81
DTH 33 90
IPTV 8 3
Total 119 174
By 31 Dec 2014 all homes to be digitised as per Govt. mandate

11. Phases of digitisation (CAS)
TRAI Guidelines Industry
Estimates
 Delhi,Mum,Kolkata,Chennai - 31 Oct 2012 March
2013
 Cities > 10 lacs population - 31 Mar 2013 March
2014
 All Urban municipal areas - 30 Sep 2014 Dec-
2015
 Rest of India - 31 Dec 2014 Dec-
2016
DTH players have a huge opportunity to increase subscriber base
due to digitisation

12. Advantages of digitisation
 Access to higher no. of TV channels
 Customised Tariffs
 Other value added services (E-learning,
games & movies on demand)
 Enhanced User experience
 Better customer service
 Carriage fee to rationalise, but placement fee
may continue

13. MSO v/s LCO in post digitisation Era
 Entire billing will be done by MSO through
Subscriber Management System
 Power Equation will shift to MSOs &
broadcasters
 LCO’s role will become largely of a collection
agent
 MSOs will own the entire infrastructure and fund
the STBs (Set Top Boxes)

14. Stake Holder Revenue
Stake Holder Revenue 2011 2016(P)
Consumer ARPU 100 % 100%
LCOs 65-70% 35-50%
MSOs 15-20% 25-30%
Broadcaster 10-15% 30-35%
Note:
1) As per broadcasters LCOs currently declare only 10-15% of actual
subscriber base thus leading to low subscription revenues
2) TRAI has recommended a revenue share of 55:45 (MSO:LCO) for the
basic free to air tier channels and 65:35 (MSO:LCO) for a combination of
free to air and pay channels

15. TV viewing time (minutes p/day)
 India- 154
 US- 317
 UK- 240
 Indonesia-174
 Vietnam – 142
 China- 146

16. Revenue Streams
1. Subscription charges
2. Selling airtime (advertisements)
3. Sponsorships
4. SMS revenue sharing
5. Mobile Streaming
6. Merchandise Sales: KBC quiz book, Channel [V] T-shirts,
etc
7. Home video and music : CNBC lessons of
excellence DVDs, National Geographic DVDs, Indian
Idol winner’s album, etc
8. Product placements
9. Home shopping revenues

17. Types of advt. revenue
 Spot rates
 Sponsors
 Embedded advt
 Screen space exploitation
 Product Placement

18. Spot Rates
 Prime Time Rates
 ROS rates
 Program specific rates
 Bouquet Rates
Rates range from Rs 1000/- per 10 secs to Rs 18
Lakhs per 10 secs depending upon viewership
and target audience
Note: There is a CAP of 12 minutes advertising time per hour

19. Top 10 sectors advertising on TV
Sector % share of advt. volume
Food and Beverages 14
Personal care & hygiene 12
Services 7
Personal Accessories 5
Hair Care 5
Auto 4
Personal Health Care 4
Household Products 3
Building, Industrial & Land
Materials
3
Telecom /ISPs 3
Total 60
Source:-
KPMG FICCI
2013 report

20. Top advertisers on TV (2011) - %
Share
 Hindustan Unilever Ltd 8%
 Reckitt Benckiser (I) Ltd 2%
 ITC Ltd 2%
 Cadbury India Ltd 2%
 Coca-Cola 1%
 Colgate Palmolive(I) Ltd 1%
 Procter & Gamble 2%
 Ponds India 1%
 Samsung India Electronics 1%
 Marico Ltd 1%
Total : 22 % Source: KPMG-FICCI report
2013

21. Major Expense heads
1. Production expenses
2. Copyrights for serials
3. Copyrights for movies
4. Licensee fees for international reality show
formats
5. Fees to judges/celebrities
6. News coverage expenses
7. Events/Award shows
8. Advertising and promotions

22. Terms used commonly
 Viewership
How many people actually watch (even once)
 TRP
How much is being watched by an individual
 GRP
How much of the entire channel is being watched
as compared to other channels.
 People - o - meters
Data capturing devices installed by INTAM in 15K
homes and by aMAP in 10K homes

23. TRP- Basic understanding
Viewership details for an episode of 30 mins of program ‘XYZ’
Person 1 Person 2 Person 3 Person 4 Person 5
Total time
avlb
30 30 30 30 30
Viewershi
p status
Does not
watch
Watches Watches Watches Watches
Time
watched
(mins)
0 2 5 10 13
1) Viewership is 4 / 5 * 100 = 80%
2) TRP is (0+2+5+10+13) / 150 = 30 /150 *100
TRP = 20

24. Viewership share of genres (%)
Source: TAM Media Research

25. Contribution of sales revenue - Language
wise
Sales Revenue
Hindi, 50%
Telugu, 8%
Tamil, 10%
Marathi, 5%
Malayalam, 2%
Others , 7%
English, 10%
Kannada , 4%
Bengali, 4%

26. Channel Rankings- GECs
1.Star Plus
2. SET (Sony)
3. Colors
4. Zee TV

27. Programming content break-up for
GECs
Soaps, 65
Thrillers, 5 Others, 2
Lifestyle, 6
Comedy, 8
Reality/Talent/
Game shows, 14
% Break-up

28. Top 10 Fiction programs in 2012
 Bade Achhe Lagte Hai Sony
 Balika Vadhu Colors
 Tarak Mehta Ka Ulta Chashma SAB TV
 Diya Aur Bati Star Plus
 Saath Nibhana Saathiya Star Plus
 Is Pyar ko Kya Naam Doon Star Plus
 Yeh Rishta Kya Kehlata Hai Star Plus
 Pavitra Rishta Zee TV
 Pratigya Star Plus
 CID Sony

29. Top 10 non-fiction shows in 2012
 KBC Sony
 Big Boss-6 Colors
 MTV Roadies MTV
 Dance India Dance Zee TV
 Satyamev Jayate Star Plus
 Jhalak Dikhla Ja Colors
 Comedy Circus Sony
 Indian Idol 6 Colors
 India’s Got Talent 4 Colors
 Sa Re Ga Ma Pa 2012 Zee TV

30. Most watched shows
 India- Sri WC 2011 Finals (TRP 20.00)
 KBC – 1st season (TRP 10.00)
 IPL matches (avg TRP 5.00)
Note: TRP figs given above are apprx.

31. Indian reality shows based on global
formats
Show Channel Global Format Country of origin
Kaun Banega
Sony Who wants to be
U.S
Crorepati
a millionaire
Indian Idol Sony American Idol U. S
Kya Aap
Paanchvi …..Hai
Star Plus Are you smarter
than the 5th
grader
U.S
Dus Ka Dum SET The Power of 10 U.S
Big Boss Colors Big Brother Netherlands
Khatron Ke
Colors Fear Factor Netherlands
Khiladi

32. Movie Acquisition Costs ( Rs
Crs)
 2009
Ghajini – 20-25
Singh Is King – 15-20
Welcome 10-15
 2010
3 Idiots – 30-35
Housefull - 15-20
Dabangg – 10-15
 2011
Ra One - 35-40
Bodyguard – 25-30
Rajneeti- 20-25
 2012
Don 2 – 35-40
Agneepath - 30-45
Dabangg 2 – 50+ crs
Talaash – 65 crs
Yet to Release
Krishh 3 – 35-40 crs
-Movie broadcast rights have largely moved away from
syndicated back to exclusive deals
-Movie bidding for broadcast rights has become extremely
competitive.
-New movie rights are bought 3-6 months in advance of film’s
release
-Catalogue rights are sold 1-3 yrs in advance of contract
expiry dates.
- To recover the cost of movie acquisition costs channels
have to price their spots at Rs 3-5 lacs per 10 sec spot
- Movie rights form a substantial part of cost structure for
GECs

33. TRPs of film premiers
 3 idiots -10.9
 Bodyguard – 10.0
 Dabang – 9.2
 Singham - 8.8
 Ra One -6.7
 Rowdy Rathore -6.0
 Cocktail -5.3
 Bol Bacchan- 4.8
 Agneepath -4.7
 Zindagi Na Milegi Dobaara – 4.1
 OMG- 3.5
 Ek ThaTiger – 3.3
Source :www.indicine.com

34. Regionalization in Satellite TV
industry
 No. of channels : 200 apprx
 Key players: Sun TV, Star Vijay,Star
Ananda,Gemini,Asianet, Zee’s & ETV’s regional
channels.
 Increasing C&S penetration in Tier III and IV towns
 Need for localised content in regional language
 South India has been traditionally language driven
market
 Penetration of other mediums is low as compared to
C&S
 Diverse set of viewers which fall in different socio-economic
classes and need content in language and
format they are comfortable with
 Advertisers also need to communicate in local

35. Regionalisation (contd…)
 Regional language channels account for 35 of the top 100 shows
 Acco. To TAM Adex regional channels garnered 42% of total
advertising volumes and national channels had 58% share
 Regional channels strengthening their portfolio by launching
niche channels for music,news,etc
 Demand for regional content and talent is increasing
 Regional channels command 27.2 % share of the advertising
market
 Star & Zee networks get 30% of their revenues from regional
channels
 Multi Screen Media (Sony) has entered Telugu market with
acquisition of Maa TV
 Network 18 has acquired EanaduTV which has presence in 6
regional markets

36. Regionalisation (contd….)
 Zee and Star have launched Bangla Movie channels viz: Zee
Cinema Bangla and Jalsa Movies
 Star owned Asianet has launched Asianet Movies, the first
movie channel in Malyalam
 Guajarati dailies Sandesh and Gujarat Samachar have their
news channels GSTV and Sandesh TV respectively.
 A new bhojpuri entertainment channel Anjan TV was
launched by AAP media
 9X Media has launched 9X Tashan in Punjabi and 9X
Jhakaas in Marathi
 CNEB launched a new Bhojpuri music Channel called
Humara M

37. Viewership of Regional
Channels

38. Advertising market size for regional channels
Language Households
(millions)
TV Households
(millions / % of
total
households)
C&S Households
(millions/ % of
total TV
households)
Advertising
Market Size
(Rs Crs)
Tamil 17.7 16.4 (93%) 15.9 (97%) 1350
Telugu 20.9 15.1 (72%) 14.8 (98%) 900
Bangla 20.3 9.5 (47%) 8.6 (90%) 700
Kannada 13.5 10 (75%) 9.9 (98%) 620
Malyala
m
8.1 7.6 (93%) 7.1 (94%) 660
Marathi 24.9 16.8 (67%) 14.9 (89%) 410
Oriya 10.0 4.2 (42%) 3.5 (84%) 80
Gujarati 12.7 4.8 (87%) 7.0 (87%) 45
Punjabi 5.5 4.8 (87%) 4.3 (91%) 150
Bh*o Bjhpoujpriu*r i consis5ts6 o.4f Eastern UP1,J6h.a6rk (h2a9nd% a)nd Bihar 11.3 (68%) 100

39. Evaluation of regional market
opportunities
Parameter Gujarati Marathi Kanada Tamil Telugu Malayalam Punjabi Bengali Bhojpuri
Size of
Population
Big Huge Big Huge Huge Small Big Huge Big
Purchasing
power of TG
High Moderate High High High Moderate High Low V.Low
Advt. revenue
potential
Moderate Moderate Moderate High High High Moderate Low Low
Competition Moderate Moderate Moderate
to High
Very
High
Very
High
High Moderate High Low
Apprx no. of
channels
present
10 11 20 50 40 21 15 25 5

40. Key inferences & observations for
satellite television space
 The Satellite TV space is increasingly
becoming hugely competitive and fragmented
 Its advantageous to have a GEC umbrella
brand around which niche channels can be
developed
 Increased average viewing time due to
availability of better content and more
channels
 Monetisation of content library on Mobile TV
will lead to increased revenues

41. Challenges for Satellite TV
industry
 Need to develop original formats for reality
shows
 Fiction programming not able to create sticky
eye-balls
 Sustaining TRPs is a tough task
 Increasing ARPU from DTH platform in the
medium to long term
 Lack of innovative and strong programming
content

42. Key Facts
 GEC Channels likeZEE TV,SET, Star Plus and Colors are available in
approximately 169,77,70 and 50 countries respectively.
 US,UK and Canada markets are close to saturation in terms of
penetration, the Middle East and Africa continue to offer significant
growth opportunities
 The content is also offered in dubbed or sub-titled versions to the local
population in these countries
 Zee has been syndicating Indian soap dramas dubbed in Mandarin to
Chinese television channels since 2006.
 Star TV has reportedly invested apprx. Rs 300 crores on movie
acquisitions
 Zee has invested Rs 200 crores to acquire 10 movies during the year
 Kid’s channels is the largest genre after Hindi and Regional channels
but command only 1 % advertising revenue share and hence is
undervalued by advertisers
 Kids genre will see increased localization of content

43. Key Facts
 Compared to its viewership share of apprx.1% English
Entertainment channels command a higher advertisement
share of 5%
 Channel V has exited the music genre and is now positioned
as a Youth GEC.
 News channels have negative subscription revenues
due to high carriage fees
 Niche sporting channels like Ten Golf can command
customer subscription revenues of Rs 200/- per month
 Sports channels are trying to focus on cricket beyond
international cricket i.e Club & University cricket as well
as non- cricket sports.

44. Key Facts
 HD subscribers account for 3.5 – 4 % of existing DTH
subscribers
 Growing HD adoption will boost DTH ARPUs
 36 channels are currently available on HD format and will
increase to 50 channels by 2014.

45. BARC
 Broadcaster Audience Research Council (BARC) was
launched in March 2012
 It is a joint body of advertisers and broadcasters with three
shareholder i.e Indian Broadcasting Foundation (IBF),
Advertising Agencies Association of India (AAAI) and Indian
Society of Advertisers(ISA).
 It has been formed on the lines of BARB that compiles
audience measurement in UK
 BARC has been founded to cater to the need of more
competition in television ratings space which has been
dominated by TAM Media
 BARC will segregate data collection, analysis and reporting
between 3 independent agencies to maintain transperency
 BARC will have a sample size of 30,000 households