Saturday, June 6, 2009

Television Distribution

The future of television distribution especially DTH does not require crystal gazing but it does warrant some thinking. I believe we are the only country in the world that has over 5 satellite operators. Examples of countries such as UK and USA indicate that only one or two operators have captured the market. So which satellite operator is going to lose this game of acquiring customers? Did countries such as USA/UK invoke a monopolistic regime by not allowing more than two operators on the satellite? Or is India forward thinking in letting market forces decide which private players would corner the market or just another country plagued with kickbacks and underhand dealings for licenses?

This is one interesting battle because Sun Direct controlled by the Maran family has strong political affiliations and presence in Tamil Nadu. This group has a successful broadcasting business with a near monopoly in the southern state of Tamil Nadu and they are also flush with cash not to mention an unrivalled regional content library. Big TV promoted by the Anil Ambani Group needs no introduction as to their political affiliations or cash flow position. Airtel promoted by Sunil Bharti Mittal is also prepared to bleed it out. Dish TV promoted by Subhash Chandra has the first mover advantage and the advantage of cross media ownership. Tata Sky, a JV between the Tatas, BSkyB, Star and Temasek, promises an enhanced viewing experience and provides the latest technology and services not provided by rivals. Players such as Videocon DTH are waiting on the sidelines and would sooner than later enter this market.

Ideally, with all these players setting up shop I would love to be a technology player supplying the hardware to these guys such as headends, STB etc. Alas, we are a technology savvy country but not competent enough to supply at the same rates at China. I am certain Chinese hardware companies must have made a killing in the past couple of years off India.

Well some players have actually not relied on China completely. With the hike in custom duties, few domestic operators have found merit in manufacturing the hardware in India.

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