Competitive Strategy:

INDIAN DTH MARKET RELIANCE BIG TV

Submitted By:

Gaurav Kumar

Section ‘E’

08PG304

Cracking the Indian DTH market

The author is discussing about the emergence of Direct-to-home Service in the Indian Market. The Indian market was till now dominated by the presence of local cable tv operators and had complete monopoly over it. DTH opened an option for Indian Consumers to opt for the satellite service to obtain television channels direct to their homes without any intermediaries. It also provided several value added services to enhance their television watching experience.

Still, as DTH is still a relatively new category and most people were hesitant to experiment with it. While Indian consumers were not completely satisfied with their cable services, they did not feel the need to switch over to any other means of entertainment. It was therefore imperative for companies such as Tata Sky, Dish TV, Reliance BIG TV to educate the consumers about the advantages of the service and in turn create an urge to invest in it.

Environmental Analysis of Indian DTH industry:

Here is the Porter’s 5 forces model in the context of DTH industry. The observations are categorized into the 5 forces as below.

DTH faces stiff competition from Terrestrial, Cable and IPTV. As per the industry estimates, there are 120 million TV homes, of which 71 million are served by cable and 6 million served by DTH with the remaining taken by Terrestrial Transmission.

Over the last three years, the direct-to-home (DTH) satellite industry has come on strongly worldwide. It has grown from a niche delivery mechanism into a mainstream business. The

spread of subscription-based DTH satellite TV promises to enhance choices for many households in developing countries.

Current DTH Players in the Market:

DD Direct Sun Direct Dish TV Tata Sky Reliance Big TV Airtel Digital TV

Reliance Foray into the Indian Market:

Reliance’s BigTV launched its DTH service on August 15th 2008. BIG TV was Reliance-ADAG's latest launch foraying into the booming Direct to home segment in the expanding Indian television market. Big TV DTH was competing with already established players Dish TV and Tata Sky. DTH operators in the country, Tata Sky, Dish TV and Sun are estimated to have a user base of around 7-8 million.

The service Reliance BIG TV included was 32 cinema channels, and will be distributed via

700 distributors across the country. It is estimated that India has over 124 million TV

households, with roughly 80 million using the conventional cable delivery platform.

Following are some of the features that Big TV is promoting extensively in its advertisements:

1. Picture-in-Picture (PIP) that would enable viewers to watch twelve TV channels at

the same time on any TV set in the country.

2. Enabled by worlds most advanced MPEG4 technology Platform for DTH services,

BIG TV

3. BIG TV DTH service is available at 1 Lakh retail outlets, including over 240 Reliance

World and 2000 Reliance Mobile Stores, across 6500 towns in the country.

4. First and only DTH operator to launch 32 Movie Channels and a Subscription

Video on Demand service.

5. BIG TV’s Fully Digital Home Entertainment Service is available at Rs. 1490

including three months complimentary subscription. (1000/- Installation charges

extra)

Reliance’s Strategy:

Reliance Big TV, a wholly-owned subsidiary of Reliance Communications is targeting a 40 per cent share of the DTH market in the next 12 months. Offering over 200 channels, Reliance Big TV would initially be made available at 1 lakh outlets and across 6,500 towns. The 6 million DTH markets with four players today are expected to add another 10-11 million subscribers with Reliance Big TV DTH joining the fray.

Reliance Big DTH would be tapping into the customer base of the ADA Group’s other companies to build its subscriber base in the business. This would comprise the 50-million customer base of Reliance Mobile, 5 million customers of Reliance Energy, the 4 million of Reliance ADA Group shareholders and the 2 million partners of the Reliance PCO channel.

Brand Marketing -

The new DTH brand is planning to tap into every type of media — ranging from the net, hoardings, radio, print, and television along with special experience zones to demo kiosks at TV

outlets. There would be new features, including subscription video on demand and a 32 cinema hall to play movies according to the customers’ convenience.

Reliance Big TV would also use the ICC Champions Trophy beginning in September to showcase its new DTH services as Reliance ADA Group is already one of the sponsors of these matches. Besides, once Reliance Big Broadcasting starts its own channels, it would offer the same on its DTH platform as well. At the same time, Reliance ADA Group is also ready with its IPTV services.

Current Position:

1. Reliance Big TV claims to have surpassed 1 million subscriber mark within 3 months of its launch, with this Big TV holds 15 percent of the market share. This announcement comes a month after Big TV touched five lakh subscribers.

2. Recently Dish TV reached 4.5 million customers, thereby capturing 53 percent of the market share. So this segment, which is expected to grow upto 10-12 million customers by November 2009, is certainly gathering momentum.

3. Catering to the masses, Reliance Big TV has expanded its retail network to around 75,000 outlets across 10,000 towns which will provide recharge vouchers (RCVs) for its DTH service.

4. BIG TV, India’s first fully digital and fastest growing DTH service, achieved the 1 million subscriber mark, within 90 days of its launch. Following this achievement, BIG TV has achieved a market share of 15 per cent in just 3 months in the fast-evolving Indian DTH sector, which is nearly 60 months old in India.

Conclusion:

A few things are assured in the DTH industry even in the face of paradigm shifts. First, the value of transponders is likely to fall as compression allows more and more content to go through the same satellite, and as more satellite are launched. Second, as bandwidth explodes, so will demand for content. Obscure sports and the like will become more valuable; conversely, much of the content that is currently valuable will face downward pricing pressure. Niche content providers will emerge.

The industry is likely to be characterized first by a period of fragmentation and then by an increasing concentration of global consortia as unprofitable participants fold. What is clearer than ever is that satellite TV is here to stay and will play role in bringing television to mass around the world.