Category: DTH Operator

Q1-2016: Subscription revenue growth, lower finance costs reduce Videocon d2h loss

BENGALURU: The addition of 6.1 lakh gross subscribers and 4.6 lakh net subscribers in Q1-2016 (quarter ended 30 June, 2015), coupled with higher average revenue per user (ARPU) for Q1-2016, resulted in a y-o-y 32.1 per cent growth in subscription revenue and 23.3 per cent growth in revenue from operations (TIO) in Q1-2016 for Videocon d2h.

On a q-o-q basis, subscription revenue increased 3.7 per cent, while TIO increased six per cent. The company also reported a marked fall in finance costs and consequently, the company’s loss in the current quarter more than halved to Rs 24.4 crore as compared to the Rs 55.8 crore in Q1-2015 and was less than a third of the Rs 75.7 crore in Q4-015.

Videocon achieved strong subscription revenue growth of 32.1 per cent to Rs 599.61 crore (90.5 per cent of TIO) in Q1-2016 as compared to the Rs 453.77 crore (84.4 per cent of TIO) in Q1-2015 and growth of 3.7 per cent as compared to the Rs 578.33 crore (92.5 per cent of TIO) in the immediate trailing quarter.

Note: 100,00,000 = 100 lakh = 10 million = 1 crore

TIO in Q1-2016 at Rs 662.83 crore was 23.3 per cent more than the Rs 537.65 crore in Q1-2015 and six per cent more than the Rs 625.27 crore in Q4-2015.

Average revenue per user (ARPU) in Q1-2016 at Rs 205.30 was 9.7 per cent more than the Rs 187.14 in the corresponding year ago quarter and was 1.5 per cent more than the Rs 202.17 in Q4-2015. (Conversion rate from 1 dollar = 62.59 Indian rupee for all the three quarters).

The company’s finance costs in Q1-2016 reduced 26.8 per cent to Rs 76.5 crore (11.5 per cent of TIO) as compared to the Rs 104.5 crore (19.4 per cent of TIO) in the corresponding year ago quarter and was an impressive 41.2 per cent lower than the Rs 130.1 crore (20.8 per cent of TIO) in Q4-2015.

Videocon d2h executive chairman Saurabh Dhoot said, “We are pleased to declare a strong set of results for the quarter ended 30 June, 2015 and are on track to achieve the guidance provided for fiscal 2016. With a strong subscriber growth outlook, DTH sector gaining market share over cable and an improving ARPU scenario; we believe we are just at the beginning of a multi-year strong growth opportunity.”

During this quarter, Videocon d2h added three proprietary channels and also set up an advertising team to sell ad inventory for the same. These channels are d2h nursery rhymes, d2h Cinema HD and a music channel. Additionally, it also added three Active services, namely, Active Kids, Active Games and Active Learning during the quarter, which have started getting traction from customers.

Dhoot added, “I am happy to share that we recently set up an advertising team to sell ad inventory on our own proprietary channels. We are beginning to see an encouraging response from multiple advertisers.”

Issuance of bonus shares

The board of directors of the company, at their meeting held on 22 July, 2015, determined that the Initial Performance Hurdle has been achieved and satisfied and hence has approved, subject to approval of Ministry of Information and Broadcasting and such other approvals and consents as may be required under the applicable regulations, the issuance of 23,360,000 equity shares (equivalent to 5,840,000 ADSs) to the shareholders of the company as of the date of the Contribution Agreement and the issuance of 3,999,984 equity shares (equivalent to 999,996 ADSs) to the sponsor by way of a bonus issue, in accordance with the terms of the Contribution Agreement and the Articles of Association of the Company. Further, Saurabh Dhoot also becomes entitled to receive 1,400,000 (equivalent to 350,000 ADSs) equity shares of the Company.

The Initial Performance Hurdle was that the last sales price of the Videocon d2h ADSs on NASDAQ (converted into Indian rupees on each such day at the Indian Rupee/U.S. Dollar Exchange Rate on such date) for 20 trading days in a 30-trading day period equals or exceeds 125 per cent of the Listing Price (i.e. price per ADS issued to the SEAC Distribution Record Holders converted into Indian rupees at the Indian Rupee/U.S Dollar Exchange Rate prevailing on the Closing Date, March 31, 2015).

Let us look at the other numbers reported by Videocon d2h

The company’s EBIDTA (operating profit) in Q1-2016 increased 26.3 per cent to Rs 187.43 crore (28.3 per cent margin) from Rs 148.45 crore (27.6 per cent margin) in Q1-2015 and increased 15.9 per cent from Rs 161.77 crore (25.9 per cent margin) in Q4-2015.

Videocon d2h total expenditure (TE) in Q1-2016 increased 20.3 per cent to Rs 618.1 crore (93.3 per cent of TIO) as compared to the Rs 513.7 crore (95.5 per cent of TIO) in Q1-2015 and increased 2.2 per cent as compared to the Rs 604.5 crore (96.7 per cent of TIO)

Videocon d2h’s operating expense in Q1-2016 at Rs 379.1 crore (57.2 per cent of TIO) was 22.7 per cent more than the Rs 309 crore (57.5 per cent of TIO) in Q1-2015 and was 4.2 per cent more than the Rs 363.7 crore (58.2 per cent of TIO) in Q4-2015.

The company says that its content cost as percentage of revenue in Q1-2016 was 37 per cent as compared to 32.7 per cent in Q1-2015 and 38.4 per cent in the immediate trailing quarter.

Videocon d2h’s selling and distribution expense in the current quarter increased 17.8 per cent to Rs 50.9 crore (7.7 per cent of TIO) as compared to the Rs 43.2 crore (8 per cent of TIO) in Q1-2015 and increased 10.4 per cent as compared to the Rs 46.1 crore (7.4 per cent of TIO) in Q4-2015.

Administrative and other expense in Q1-2016 increased 15 per cent to Rs 14.6 crore (2.2 per cent of TIO) as compared to the Rs 12.7 crore (2.4 per cent of TIO) in Q1-2015, but reduced by 42.3 per cent as compared to the Rs 25.3 crore (four per cent of TIO) in Q4-2015.

Employee Benefit Expense in Q1-2016 increased 26.6 per cent to Rs 30.9 crore (4.7 per cent of TIO) as compared to the Rs 24.4 crore (4.5 per cent of TIO) in Q1-2015 and was 8.4 per cent more than the Rs 28.5 crore (4.6 per cent of TIO) in Q4-2015.

Videocon d2h CEO Anil Khera said, “We believe around 10 crore homes will be up for grabs by digital cable and DTH operators in the next four – five years. DTH should gain higher market share in Phase III and IV of the Government of India digitization plan in comparison to the prior phases. We are excited and prepared to take on the significant subscriber growth opportunity ahead of us, as we approach the Phase III digitization deadline. While actual implementation could take time, we continue to believe the government has a strong intent to switch off analogue cable as per the plan.”

July 23, 2015
Videocon d2h expands HD offering to 37 channels

MUMBAI: Videocon d2h has expanded its high-definition (HD) offering to 37 channels by adding Star Movies Select HD and Fox Life HD on channel number 258 and 468 respectively.

The new channel launches on its platform continue to validate Videocon d2h’s commitment to providing Indian audiences with high-quality content across an array of genres and formats.

Star Movies Select HD will premiere two new films not previously released in India each month, in addition to airing a new movie everyday. Additionally, Fox Life HD features a slate of scripted and non-scripted content that is inspired by real life as well as appealing and appropriate for the entire family. Fox Life HD will be having multiple audio feeds in Hindi, Tamil and Bengali besides English.

Videocon d2h plans to continue to add more HD channels shortly, with an aim to have as many as 50 HD channels.

“We have been relentless in our pursuit to gratify our customers’ with an exceptional viewing experience. Videocon d2h’s substantial offer of wide range of HD channels is a testimony to that endeavour. We remain committed to expanding Videocon d2h’s channel offerings and content as a means to providing a superior viewing experience to our customers, augmented by innovative technology and the best customer service. It’s a simple plan that we believe will result in a major upgrade for India’s TV viewing public,” said Videocon d2h executive chairman Saurabh Dhoot.

Videocon d2h CEO Anil Khera added, “Videocon d2h has been extremely aggressive and innovative when it comes to technology upgrades, new content offerings and launching new services all in an effort to keep ahead of current industry trends. Fox Life HD with multiple audio feeds and Star Movies Select HD are two premium HD channels that bring even more quality content to our subscribers resulting in a superior viewing experience. Keeping both our promise to provide the best channels and content across all genres and our commitment to customer satisfaction has built a strong level of trust between our customers and Videocon d2h, and we value that relationship.”

July 20, 2015
Airtel Digital TV launches ‘Made in India’ set-top-boxes

MUMBAI: Airtel Digital TV, the DTH arm of Bharti Airtel, has launched its first indigenously manufactured set-top-boxes (STBs), which are aptly called ‘Made in India’ STBs.

Conceptualised and designed in India, the HD STBs will be manufactured at a facility in Pune (Ranjangaon) with an aim to match global technology standards to provide the best of experience to customers.

The boxes will serve HD users to begin with and soon all Airtel Digital TV’s set-top-boxes will be manufactured in India. This move makes Airtel Digital TV the latest corporate to join the Narendra Modi government’s Make in India initiative. The launch promotes an ecosystem that will drive indigenous manufacturing of DTH STBs empowered with production capabilities as well as technical expertise within India.

When asked about the initiative, Bharti Airtel DTH and media CEO Shashi Arora said, “With this we aim to reduce our imports and thus help drive employment and growth within the country. In the long run, cost synergies will further help us extend more benefits to our customers.”

Based on an in-house design by MyBox Tech, which is a subsidiary of Hero Electronix, and ST Microelectronics, a multinational manufacturer of Integrated Devices and semiconductors, the STBs will offer features including Full HD 1080p support, MPEG-4 video with Dolby Digital Plus Surround Sound, 5X picture clarity, unlimited recording (via USB-drive), and USB-based Wi-Fi connectivity for On-demand, Anytime TV and Interactive Gaming.

Welcoming this move by Airtel Digital TV, minister of state for Information and Broadcasting Rajyavardhan Rathore said, “It is great that Airtel Digital TV is aligning itself with our Make in India vision as this will certainly pedal the fast gaining momentum of the initiative further.”

Airtel Digital TV connection on these HD boxes will be available under various packages.

July 16, 2015
Videocon d2h targets advertising revenue; strengthens ad sales team

MUMBAI: Direct to home (DTH) operator Videocon d2h is looking at increasing its advertising revenues. In order to achieve this, the DTH operator will not just offer targeted advertising across its regional language and proprietary channels, but also launch new channels shortly.

In order to achieve the target, the operator has formed a new executive advertising team to be headed by Indian media sales experts.

The advertising initiative, which will target inventory opportunities on the Videocon d2h platform, comes in response to the positive feedback from the operators’ advertisers such as Volkswagen, Honda, Disney, Sony TV, Zee Group and Star Sports. Media buyers will also be able to advertise on Videocon d2h’s home channel and info bar when changing channels.

The new Videocon d2h advertising sales team is led by media veteran Tanmay Srivastava, who joins the company after serving as MSM Network head, advertising sales. Reporting directly to Videocon d2h deputy CEO Rohit Jain, the operator has also recruited two other senior executives with extensive local advertising sales experience.

The operator began offering advertising on its platform only last year. The inaugural effort focused on its home channel and generated approximately US$1.5 million in fiscal 2015. With its expanded initiative, Videocon d2h is anticipating substantially bigger advertising revenue gains in fiscal 2016.

Videocon d2h CEO Anil Khera said, “Today’s announcement reconfirms our commitment to continuously identify growth opportunities for our shareholders. With the goal of generating new revenue through an expansive, targeted ad sales platform, we have assembled a solid team that is more than capable of moving this initiative forward for us. We look forward to being a part of their success in tapping Videocon d2h’s reach of 65 million consumers with exciting, new options, and we anticipate the advertising program to expand even further as we launch our own branded channels in the future.”

Silver Eagle Acquisition founder Harry Sloan further added, “During the recent NASDAQ listing process, we focused on advertising sales as one of the important high margin growth opportunities. As we look to roll out a bouquet of new branded channels we will be able to use the extensive reach of our platform to turn ad sales into bottom-line dollars. This is a programme that will benefit our growing consumer base, as well as those advertisers seeking their stake in the lucrative Indian TV market. Given the exciting growth in overall Indian advertising and the television ad market in India, we are very pleased to see the development of an effective advertising sales force implemented quickly and effectively.”

July 9, 2015
Digital fallout: DTH cos set to lose, broadcasters poised to reap benefits

MUMBAI: Change is constant and change is good…. however, it seems like change isn’t good for all. While the proliferation of digital platforms giving an impetus to online videos, will turn out to be a boon for broadcasters, direct to home (DTH) operators however, are set to lose out.

According to a research report by Bank of America-Merrill Lynch, just like in the West, online video content will disrupt India’s Pay TV market. While broadcasters will benefit because of ad supported content monetisation, DTH players will suffer because of pressure on ARPUs. Moreover DTH companies are also poised to lose most as the price-sensitive Indian consumers will refrain from paying premium for content on live television when they have online alternatives.

Broadcasters are well placed to monetise content on digital platforms as it only increases the opportunities. As a result, ad revenues are expected to improve following a pick up in economy. The report states that broadcasters will be able to improve their content monetisation through increased ad revenues and better declaration of subs in a digitised environment.

For DTH companies, despite digitisation delay, there will be improvements in the average revenue per user (ARPU) driven by the following factors: 1) HD channel penetration increase; 2) Differential tariff hikes; and 3) MSOs hiking tariffs to maintain profitability – offering DTH players more headroom to raise tariffs.

Creating a scenario comprising Zee TV (broadcaster) and Dish TV (DTH), Bank of America-Merrill Lynch’s analysis suggests that the overall risks are skewed to the upside for broadcaster Zee and to the downside for DTH operator Dish TV.

According to the report, Zee has underperformed the markets by eight per cent year-to-date (YTD) on concerns about the loss in market share due to channel fragmentation and investments in new channels. “Post the share-price underperformance, we see the risk-reward as favourable since, in our view, the market is now factoring in all the risks, but not giving full benefits of strong ad growth, monetisation of new content and digitisation benefits,” the report states.

Factoring in the positives for Dish TV, the report says that though digitisation is inevitable, the expectations on timelines are optimistic and complete benefits of digitisation will be seen only by FY2020-21. However, over the next 12 months, ARPU improvements are expected due to: 1) MSOs hiking tariffs to maintain margins; 2) Increased penetration of HD channels; and 3) Differential price hikes in urban areas. “However, Dish TV has outperformed the market by 65 per cent YTD, and we see most of the positives are priced in,” says the report.

The upside of digitisation will be gradual. Citing risks and benefits of digitisation, the report says that it sees the risk of distributors (MSOs and DTH players) not realising the full potential of digitisation as the pace of roll out is slower than what the market is anticipating. Moreover, by the time the full benefits of digitisation are realised, the new-age video disruptors, internet-enabled smart devices like mobile, TV and PC will start eating into the revenues of Pay TV and MSOs like they have done in the West. Additionally, though phase-I and II of digitisation is complete, the expected benefits have not flowed to the players because of issues like MSOs/LCOs tussle and absence of customer billing. “There has been some progress on resolving the issues but it has been slow. These problems will only increase with roll out in phase-III and IV areas,” the report states.

In the next few years, the Indian media sector is expected to evolve as digitisation gradually picks up, fragmentation of channels increases and all companies (broadcasters, DTH and MSOs) evolve their business models in face of online content proliferation.

Positive on broadcasters: Content still the king

According to the report, companies like Zee will benefit from an improvement in ad growth (led by GDP uptake) and expect to benefit from content fragmentation as it is one of the better companies leveraging this trend. “Over time, as traffic will shift to smart devices, we expect consumption of video content to increase. This presents increasing opportunities for broadcasters to monetise content. With improving economic activities, digitisation rollout and pressure on distributors’ P&L, we expect both advertisement and subscription revenues of broadcasters to increase. On the other hand, we believe that given the reluctance of Indian consumers to pay for online consumption, content on smart devices (smartphones, PCs, tablets) will be monetised primarily through advertisements,” the report states.

DTH: Digitisation is gradual; ARPU improvement to flow in

Despite slow digitisation, companies like Dish TV are likely to improve their ARPUs and EBITDA margins over next 12-18 months. The ARPU improvement will be led by the following factors: 1) MSOs facing some pressure from broadcasters to hike tariffs allowing DTH operators to follow them; 2) Increased penetration of HD channels; and 3) Players like Dish TV implementing differential pricing across cities to improve realisations and monetising on its “Zing” offering.

MSOs: Broadband push is the next big story

With the ongoing tussle between MSOs and LCOs, the full benefits of digitisation will come gradually for MSOs. As a result, MSOs are likely to focus on other revenue streams like broadband subs. According to checks carried out by Bank of American-Merrill Lynch, there’s increasing focus by MSOs to improve their broadband coverage, which would help cross-sell services overtime and have direct control over subs. The major MSOs have already started experimenting with high-speed broadband in high-density urban areas, and slowly they will start rolling out in Tier-2 and Tier-3 cities.

Key risks:

1) Economy not picking up: Any slower-than-expected economic uptake may lead to material downgrades to our consensus ad revenue numbers for Zee.

2) LCOs/MSOs tussle unable to reach a solution: Continued tussle between LCO and MSO (LCOs are unwilling to share consumer details with MSOs in order to guard their turf) will impact ARPU improvements for the sector.

3) Rise in piracy: With the proliferation of online content and new mediums of consumption, we may see a rise in piracy. In such a scenario, it will impact the entire industry negatively as it would be difficult to monetise the content effectively.

June 22, 2015
Videocon d2h re-appoints Ernst & Young India as internal auditor

MUMBAI: Indian direct to home (DTH) operator Videocon d2h has re-appointed Ernst & Young LLP, India for the fiscal year ending 31 March, 2016 to support it in performing internal audit and testing of internal controls over financial reporting for the company.

Ernst & Young LLP, India has served as the internal auditor of the company since 16 February, 2015.

Videocon d2h executive chairman Saurabh Dhoot said, “The re-appointment of Ernst & Young LLP, India will help ensure that the company continues to maintain rigorous internal financial and accounting controls and procedures, and produce accurate financial statements on a timely basis, in line with international best practices.”

Videocon d2h proposed director Jeff Sagansky added, “Following the NASDAQ listing, the company has established international best practices for corporate governance and policies, including those pertaining to related party transactions and internal controls, and are pleased that Ernst & Young LLP, India will continue to help us in this area.”

Ernst & Young LLP, India partner Ashish Pherwani said, “We are happy to partner with Videocon d2h in its journey towards improved practices and controls in an environment of competition and growth.”

June 22, 2015
Apollo sells 4.4% stake in Dish TV for Rs 486 crore; Citigroup buys 2.6 crore shares

MUMBAI: Apollo India Private Equity II (Mauritius) has raised approximately Rs 486 crore via a 4.4 per cent stake sale in Essel Group’s direct to home (DTH) company Dish TV. The company sold 4.7 crore shares in Dish TV at Rs 103.72 per share on the Bombay Stock Exchange (BSE) on 19 June, 2015.

Of the shares sold by Apollo, Citigroup Global Markets Mauritius snapped up 2.6 crore shares for Rs 103.65 per share totalling to approximately Rs 268.5 crore.

As on 31 March 2015, Apollo held an eight per cent stake in Dish TV through its outstanding global depository receipts (GDR). Apollo had acquired these shares at Rs 39.80 for a total consideration of Rs 465 crore (or $100 million) in 2009. Moreover in April this year, Apollo converted a part of the GDRs into equity shares and had sold it for Rs 262.5 crore via an open market transaction.

On 19 June (Friday), Dish TV India closed at Rs 105.60, down Rs 4, or 3.65 per cent on the bourses. The share touched its 52-week high Rs 117.25 and 52-week low Rs 55.40 on 17 June, 2015 and 26 September, 2014, respectively.

June 20, 2015
FY-2015: Inflection point for DTH companies in India?

BENGALURU: Is FY-2015 the inflection point for direct to home (DTH) companies in India? The answer seems yes, if one were to go by the financials declared by three listed operators for the quarter and year ended 31 March, 2015 (Q4-2015 and FY-2015 respectively) – Airtel Digital TV, Dish TV and Videocon d2h. And the players are gung-ho about the future. Subscriber growth and higher ARPUs (Average Revenue Per User) are some of the factors that have brightened the picture for this segment of the carriage industry in fiscal 2015.

Note: 100,00,000 = 100 lakh = 10 million = 1 crore.

This report covers only three of the seven DTH service providers in India since the other four – Reliance Digital TV, Sun Direct (about 97 lakh subscribers as on 31 March, 2015), Tata Sky and DD Free Dish are not listed on the bourses and their financial numbers are not available.

The Numbers

Dish TV

Dish TV’s standalone and consolidated net Total Income from Operations (TIO) in FY-2016 at Rs 2781.64 crore was 10.9 per cent more than the Rs 2508.97 crore in FY-2014. Standalone TIO in Q4- 2015 at Rs 754.72 crore grew 18.5 per cent as compared to the Rs 636.91 crore in the corresponding year ago quarter and was 10.3 per cent more than the Rs 684.26 crore in Q3-2015.

According to Dish TV, the DTH sector is a direct beneficiary of a positive consumer sentiment. The company achieved strong subscriber growth of 1.5 million net subscribers during the year. Fiscal 2015 also saw Dish TV swing to net profit, a first for any DTH company in India.

The biggest among the three in terms of revenue as well subscribers, Dish TV at the close of FY-2015, reported standalone net profit after tax (PAT) of Rs 35.01 crore in Q4-2015 and a standalone PAT of Rs 1.01 crore in FY-2015 as compared to a standalone loss of Rs 154.21 crore in FY-2014. For Q3-2015, Dish TV’s loss was just Rs 2.87 crore as compared to double-digit crore loss numbers in the previous or like-to-like quarters. Dish TV also doubled its subscriber growth to 15 lakh in FY-2015 as compared to the previous year. As on 31 March, 2015, the company reported a net subscriber base of 1.29 crore, having added 4.04 lakh subscribers in the last quarter of 2015.

Dish TV also reported higher ARPU of Rs 179 in Q4-2014 as against Rs 177 in Q3-2015 (1.13 per cent increase in ARPU) and was 5.3 per cent higher than the annual ARPU of Rs 170 reported in Q4-2014.

“As digitization spreads far and wide, we continue to believe that there is sufficient headroom to further explore price differentials between key urban markets and their rural counterparts. All pack prices, for new as well as existing subscribers of Dish TV, have been moved by Rs 10 each in the 42 cities under phase I and II. We are confident that pack price hikes, higher HD uptake, as well as industry level developments such as initiation of packaging in cable will be key contributors to ARPU expansion going forward,” said Dish TV managing director Jawahar Goel.

Post a successful absorption of higher pack prices in Delhi, Mumbai, Pune and Kolkata, Dish TV initiated another price change during the current month. In less than three months since it was first introduced, differential pricing – an industry first from Dish TV was rolled-out in the balance 38 cities covered under DAS phases I and II with effect from midnight on 12 May, 2015.

Last year Dish TV launched a second brand, Zing, in the Indian DTH space. A resounding success, Zing cemented Dish TV’s supremacy in the DAS Phase 3 and 4 markets with custom-made content, hardware and service packages for the regional audience, says the company.

Airtel Digital TV Services

Airtel’s Digital TV Services (DTH segment) revenue grew 19.2 per cent in FY-2015 to Rs 2475.9 crore from Rs 2077.1 crore in FY-2014. The segment reported 11.8 per cent growth in number of subscribers with 100.73 lakh subscribers on 31 March, 2015 as compared to the 90.12 lakh subscribers at the close of the previous year. ARPU in FY-2015 at Rs 214 was five per cent more than the Rs 203 in FY-2014. The segment reported slightly higher monthly churn of one per cent as compared to 0.9 per cent in FY-2014.

The DTH segment reported an operating profit of Rs 8.1 crore in Q4-2015 as compared to an operating loss of Rs 36 crore in the immediate trailing quarter. For FY-2015, Airtel DTH reported a lower operating loss of Rs 158.1 crore, for FY-2014, operating loss was three times more at Rs 481.2 crore.

EBIDTA and EBIDTA margins in FY-2015 at Rs 675.2 crore (27.3 per cent of total revenue) were more than double (2.02 times) the Rs 334.7 crore (16.1 per cent of total revenue) in the previous year.

Videocon d2h

Coupled with higher ARPU for FY-2015 at Rs 196, and Rs 202 in Q4-2015, Videocon d2h reported 32.5 per cent growth in revenue from operations in FY-2015 at Rs 2337.7 crore as compared to the Rs 1764.4 crore in FY-2014. The company’s subscription revenue increased 38.3 per cent in the current year to Rs 2058.1 crore from Rs 1487.7 crore in the previous year.

Videocon d2h says that it was able to push through an inflation linked ARPU increase in February 2015. As a result, Q4-2015 ARPU was Rs 202, up 11.7 per cent from FY-2015.

Videocon d2h closed fiscal 2015 with 101.8 lakh subscribers as compared to 84.4 lakh in the previous year. It claims market leadership in subscriber growth in FY-2015 with 26.4 lakh gross subscribers and 17.4 lakh net subscriber additions. Subscriber churn per month increased fractionally in FY-2015 to 0.8 per cent as compared to 0.76 per cent in the previous year.

The company reported lower net loss in FY-2015 at Rs 272.7 crore as compared to the Rs 319.5 crore in the previous year. Adjusted EBIDTA increased 55.3 per cent in the current year to Rs 609.1 crore (margin 26.1 per cent) from Rs 319.5 crore (margin 34.1 per cent), the company said in its earnings release on NASDAQ.

Videocon d2h CEO Anil Khera said, “The Pay TV segment in India is positioned for extraordinary growth over the next few years with millions of new TV homes being created on account of the strong economic outlook in India as well as the Government of India’s initiative to roll out its digitalization mandate across the country. We believe that 9 to 10 crore homes will be making the switch to digital platforms, which will be available to the DTH and digital cable operators. We are well positioned to benefit from this and we believe we will take the largest share of this opportunity, as we have in the past. With strong economic growth outlook for India, overall media sector is expected to grow in the years to come. We believe this will help grow ARPU, TV penetration and increase HD uptake leading to stronger revenue growth for Pay TV in general and Videocon d2h in particular.”

End points

The last quarter of fiscal 2015 (Q4-2015) has shown better than average results in the case of all the three DTH players examined in this report. PAT in Q4-2015 eliminated the loss Dish TV incurred in the first three quarters of FY-2015. In the case of Airtel DTH segment, EBITDA for Q4-2015 increased to Rs 207.8 crore as compared to Rs 96.7 crore in the corresponding quarter last year. The reported EBITDA margin improved significantly to 32.7 per cent in Q4-2015, as compared to a margin of 17.9 per cent in the corresponding quarter last year.

As mentioned above, Airtel DTH turned EBIT positive to Rs 8.0 crore in the current quarter, as compared to EBIT loss of Rs 110.7 crore in the corresponding quarter of last year. Comparable numbers for Videocon d2h have not been made available since the company debuted on NASDAQ on 1 April, 2015 and has disclosed only a limited amount of information about its annual numbers.

The Indian carriage universe has 16.8 crore households. DTH operators have continued to focus on improving realisations by increasing penetration of HD channels, premium channels and value added services (VAS) according to the FICCI-KPMG Indian Media and Entertainment Industry Report 2015. However, they may have to rework their channel packages to be more relevant and affordable for phases III and IV subscribers. A case in point mentioned above is Dish TV’s sub-brand Zing, which caters to specific linguistic needs of subscribers and offers regional specific packs as a part of all available packs.

Also, all major DTH operators have launched apps for mobiles and tablets through which subscribers can watch live TV for an additional fee and DTH operators have the advantage of monetising these viewers because of their existing payment relationships with their subscribers.

The FICCI-KPMG 2015 report also says that battle for subscribers in phases III and IV of DAS in India is expected to be more keenly fought between MSOs’ and DTH players. While DTH players managed to get only 20 to 30 per cent of the subscribers converting from analogue to digital in phases I and II, they are in a much better position in phases III and IV due to inherent technology advantage of DTH in sparsely populated areas and also due to their balance sheets being healthier than the MSOs’.

The Ministry of Information and Broadcasting extended the deadlines for phases III and IV to 31 December, 2015 and 31 December, 2016, respectively, and there could be another delay by 12 months according to experts, which means that phase IV rollout could complete only at the end of 2017 or even 2018. The benefits of digitisation in these phases in terms of improved addressability and ARPU is expected to take much longer. At the end of 2019, the FICCI-KPMG report expects digital cable subscriber and DTH subscriber ratio to be 55:45 with 9.4 crore digital cable subscribers and 7.6 crore DTH subscribers.

HITS (Headends in the Sky), if it takes off even in a small way, could affect the fortunes of both the DTH and the cable TV industry. Let’s wait and watch how the Hinduja Group, which has a license to launch HITS and is a major player in the cable TV business, plays this out. Jain TV, the other licensee for HITS, has made a miniscule dent. IPTV is still at less than an infancy stage in the country.

If DTH companies can sustain, innovate in technology and offerings and grow from here, FY-2015, and maybe Q4-2015 could really be the turning point when at least one segment of the carriage business in India has started making money. Only time will tell…

June 16, 2015
Sun Direct’s home channel is media planners’ new destination

MUMBAI: South Indian direct-to-home (DTH) player Sun Direct is all set to take advertising on its DTH home channels to a new level. Keeping in mind the increasing number of advertisers opting for slots on DTH home channels over regular TV channels, Sun Direct has taken a stride towards creating awareness about the available platform.

In the current digital era, many advertisers opt for advertising in the home channels of the DTH player, which gives innumerable benefits to the brands as it is reaches the target audience. As a major DTH player in South India, Sun Direct has expanded its home channel platform for advertisers to showcase their brands.

All e–shopping advertisers associated so far gave a positive feedback for Sun Direct viewers for their advertisements resulting in better sales; excluding other brands that have advertised in the platform. The home channel has a mandatory 10-second duration of ads during the booting of the set–top–box so that the viewers get to watch the ad completely. Sun Direct has been innovating to provide services of great quality to both its subscribers and advertisers.

June 4, 2015
Reliance Digital TV joins hands with Visiware to power iGames service

NEW DELHI: Reliance Digital TV has partnered with Visiware to power iGames service on its DTH platform.

Reliance Digital TV’s customers will have access to a richer and improved gaming experience with twice the number of games for the same price. Accessible through the Interactive button on the remote control, the iGames service does not require any additional equipment.

The portal offers a selection of 16 games split up in four genres primarily for people between 8 – 25 years old to enjoy. Each category proposes four different games selected out of a 300-game catalogue. The portal is updated with two games getting refreshed every month.

The games include Adventure with arcade and action titles with hundreds of levels to conquer, Board & Cards with classics such as Solitaire and Freecell; Brain Teasers with mind boggling thinking references; and Sports with games like Football and Basketball amongst others.

Reliance Digital TV’s customers can subscribe through phone or SMS to one of the two available offers. They can either select the monthly option at Rs 34 a month or the quarterly option at Rs101 for three months with the fourth month free.

iGames’s revamp and enhancement bring new additional features. The portal is updated every month with two new games replacing old ones without any fee necessary for both the monthly and the quarterly subscribers.

Reliance Digital TV business head Ashutosh M Srivastava said, “We are glad to partner with Visiware and confident of introducing a completely new breed of TV gaming on iGames platform. The advantage with Reliance Digital TV gaming service is that it is easily accessible, affordable and can be enjoyed by every member of the family with no age bar. This opens up a large market, not only in the larger cities, but also in the Tier II-Tier III cities and small towns.”

“With this new launch, in partnership with a major DTH network such as Reliance Digital TV, we take another defining step into the Indian market. We are really delighted that our games will bring real interactivity to the Indian television market and for Visiware and Reliance Digital TV this is the perfect team in order to propose a really good and innovative interactive TV offer. The size of the distribution is critical in this market and we are very proud to be partners of all the top operators across Europe, America and Asia,” added Visiware CEO Colas Overkott.

June 4, 2015