CABLE & SATELLITE

TELEVISION

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

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%)

Value Chain

Content Producers

Broadcasting Channels

Distributors (Multi Service Operators & Local Cable

Operators)

Subscribers

Genres of channels

GEC

News

Sports

Music

Movies

Lifestyle

Cooking

Shopping

Kids

Others

No. of Channels

1991 – 05

1993 – 13

1996 – 66

2000 – 130

2004 - 200

2007- 363

2011 - 623

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

TV penetration in various

countries

India- 60%

Indonesia-78%

China-98%

Brazil- 90%

Germany- 97%

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

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

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

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

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)

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

TV viewing time (minutes p/day)

India- 154

US- 317

UK- 240

Indonesia-174

Vietnam – 142

China- 146

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

Types of advt. revenue

Spot rates

Sponsors

Embedded advt

Screen space exploitation

Product Placement

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

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

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

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

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

TRP- Basic understanding

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

Viewership details for an episode of 30 mins of program ‘XYZ’

1) Viewership is 4 / 5 * 100 = 80%

2) TRP is (0+2+5+10+13) / 150 = 30 /150 *100

TRP = 20

Viewership share of genres (%)

Source: TAM Media Research

Contribution of sales revenue - Language

wise

Hindi, 50%

English, 10%

Others , 7%

Kannada , 4%

Malayalam, 2%

Marathi, 5%

Tamil, 10%

Telugu, 8%Bengali, 4%

Sales Revenue

Channel Rankings- GECs

1.Star Plus

2. SET (Sony)

3. Colors

4. Zee TV

Programming content break-up for

GECs

Soaps, 65Reality/Talent/

Game shows, 14

Comedy, 8

Lifestyle, 6

Thrillers, 5 Others, 2

% Break-up

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

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

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.

Indian reality shows based on global

formats

Show Channel Global Format Country of origin

Kaun Banega

Crorepati

Sony Who wants to be

a millionaire

U.S

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

Khiladi

Colors Fear Factor Netherlands

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

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

Regionalization in Satellite TV

industry

No. of channels : 200 apprx

Key players: Sun TV, Star Vijay,StarAnanda,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

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

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

Viewership of Regional

Channels

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

Bhojpuri* 56.4 16.6 (29%) 11.3 (68%) 100* Bhojpuri consists of Eastern UP,Jharkhand and Bihar

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

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

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

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

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.

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.

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