Pankaj Krishna, Founder & CEO, Chrome Data Analytics & Media Pvt. Ltd.
The advent of television has changed the way we view the world. However, unlike the West, which first experimented with the medium in the early 1920s-30s, India went through the same in late 1950s. Meanwhile, by the 1960s, the US had witnessed a full-fledged commercial television industry with reach and scale. For India, the 1982 Asian games were the turning point.
Even as India had lagged behind the West in adoption of television as a product itself, it has attempted to match the latter in terms of upgrading of transmission technology. Purely from the point-of-view of delivery, India has moved from over-the-air (OTA) terrestrial transmission, to cable networks, to satellite dish, to Direct-to-Home (DTH). In terms of signaling, Indian television's march from analog to digital mode has defined digitization of television industry.
The Four-Phase Trajectory
Taking a cue from the West – US broadcasting signals shifted from analog to digital in 2009 while Europe is at different stages of transition – the Indian Parliament in December 2011 cleared a bill making digitization of cable TV mandatory and setting different timelines for different market segments. In the first phase, the four metros had to be digitized by June 30, 2012. The second phase was to cover 38 cities with over one million populations by March 31, 2013. The third phase was to ensure digitization of networks in all other urban areas (municipal corporations, municipalities) by September 30, 2014. And in the fourth phase, rural India was to be digitized by March 31, 2016. Despite the setting of these initial deadlines, the government has periodically revised these deadlines for different markets. In March 2017, the Information & Broadcasting Minister updated the Parliament affirming that 100 percent of installation of set-top boxes had been achieved in Phase-I and II (barring Tamil Nadu). However, according to Chrome DM, active analog signals still exist across states including Tamil Nadu, AP, MP, West Bengal, Maharashtra, and UP, among others. While promoting vested interests, the analog causes a loss of revenue to the government. There have been cases where analog signals were found switched off during the day while being active at night.
Digitization serves three key objectives. First, it ensures business transparency since cable operators not only have to be registered and carry all channels through STBs, they now have to furnish reports on the subscriber numbers, rates and the split for free-to-air and pay channels. This is to redress the rampant underreporting of numbers by LCOs leading to revenue loss for broadcasters and government alike. Second, transparency would help streamline the entire value chain attracting greater investment creating value for all stakeholders involved. Third, for the consumers, while the initial cost is high, the upside lies in higher-quality audio-video reception, more channels, option for select channels, besides scope for other related services such as HD viewing and video-on-demand content.
Given the complexities intrinsic to a multi-player ecosystem such as television, there is no denying that the industry is ridden with disputes across several layers. While the broadcasters complain of being deprived of revenues, the LCOs stress on their inability to scale up due to the enormity of the costs involved. Yet, the numbers have been simply unstoppable ever since the digitization initiative. According to FICCI-KPMG 2017 report, the larger television industry is expected to reach a size of over 1165 billion at CAGR of over 14 percent over the next 5 years. The increased traction gained by the DTH services companies in recent years and the merger of Dish TV and Videocon DTH, creating the largest DTH company is a sign of India's digitization promise.