New Delhi: India is among a handful of countries where there is great scope for further penetration of television. Since the turn of the millennium, pay-TV connections have more than doubled in Indian households, though data in the public domain indicates there still remain an additional 100 million homes to penetrate.
Now, a new report published by Media Partners Asia (MPA) forecasts India’s pay-TV industry will grow at roughly seven per cent CAGR between 2020-25. The growth will be accompanied by a significant uptick in the total industry revenues, including subscription and advertising which will reach $12.3 billion by 2025, said the industry analysts.
The report, entitled India Pay-TV Distribution 2021 released on Monday, predicts that more than 96 per cent of India’s pay-TV homes will be digitalised by 2025. The total pay-TV subscribers will further expand from 127 million in 2020 to 134 million during the period.
Distribution dynamics
The MPA has pegged India’s active DTH homes to grow from 58 million in 2020 to more than 68 million in 2025. Meanwhile, cable’s share of pay-TV subscribers will decline from 54 per cent in 2020 to 46 per cent by 2025; IPTV will pick up a small share after rolling out later in 2021.
MPA India vice president Mihir Shah said, “Robust backend systems, the ability to offer consumers flexibility in choosing channel packages under NTO and the exit of leading private channels from DD Free Dish helped the DTH pay-TV sector grow even after the new TRAI tariff regulations came into effect.”
Going forward, DTH will be the key driver of growth fulfilling the needs of the majority of new TV households entering into the pay-TV ecosystem. “Premium cable subscribers in urban centers remain vulnerable to churn as uptake of quality fiber-based broadband services including IPTV grows in affluent pockets of urban India,” he added.
Monetisation, investment and the outlook for broadcasters
The total pay-TV industry revenue, including subscription and advertising, had declined 10 per cent year-on-year in 2020 to $8.9 billion as the economic downturn post-Covid eroded advertising. The projections show that the recommencing of fresh content and live sports together with improvements in consumer and economic sentiment will lead to a sharp recovery in 2021. Pay-TV advertising will grow at 12 per cent CAGR over 2020-25 after a 25 per cent contraction last year.
During 2020, pay-TV broadcasters generated $4.4 billion in total revenue (62 per cent from advertising and 38 per cent from subscription), down 17 per cent year-on-year. A sharp recovery is expected over the next two fiscals with the channel business and advertising primarily driving this expansion.
According to Shah, TRAI’s heavy spate of regulations in recent years depressed investment in pay-TV content, which could have a detrimental impact on the quality of content available for the mass market.
“We expect that more consolidation will play out in the broadcasting industry as recent tariff amendments force incumbent broadcast networks to recalibrate existing channel portfolios. The economics of less popular channels and several niche channels are no longer viable. A new and less draconian regulatory framework will help revitalise content creation in the pay-TV industry while also helping to bolster pricing power for pay-TV platforms,” he stated.
