Future of competition in the Indian DTH market

By Aditya Mhatre at 7 March, 2009, 11:22 pm

The DTH market in India is relatively nascent but is getting crowded very quickly. In the past 3 months, two solid competitors like Airtel, Reliance have entered the market and Space TV, a Star TV venture, is awaiting government approval. The future of competition in the DTH market is not going to be in the core DTH service or the subscription cost. To attract subscribers, companies will have to distinguish themselves from the competition by providing value added services via DTH.

A DTH service provider delivers service using a set top box which can be compared to a tiny computer. Minor enhancements to the set top box software and new business processes could provide a lot of scope to creatively develop new revenue streams.

Here are few ways DTH companies could differentiate themselves from the competition.

Payments via DTH: DTH boxes could be developed as a payment platform similar to mobile phones. People could use this medium to pay electricity bills using their credit cards. This is a very critical feature and has the potential to open up a lot of revenue generating features.

Localized/targeted Ad platform for SMB: A very simple location based sales or coupon distribution module can be built on top of the set-top box. This will specifically be of tremendous value to local SMB like restaurants or jewellery outlets etc. Ability to select area, create, publish, and payment online for publishing ads could be an innovative business model. The ad publisher could choose the channel that the message would appear on and would be charged on the Cost per click model.

The system can also be made a more advanced by building in a business intelligence layer on top of DTH set top box software. The BI layer would gather user specific data and which could be used to run highly targeted and focused ad campaigns.

TV Commerce: An innovative e-commerce model for TV could emerge where the viewers will be able to either buy or get information about the product while the ad is being aired on TV. For example: If a Nokia commercial is being aired on TV, a message saying “Press Red button to buy” could flash using which the User could be directly to the TV shopping cart and the product would be delivered just like any e-commerce site.

Streaming rental movies/movie ticket booking/online gaming: DTH service providers will soon start offering internet services via DTH. Once that happens; the TV set-top box and the internet modem would converge. Almost all companies in the DTH market have a telecommunication business and hence the synergies are obvious. Company like Big TV is ideally placed with group companies, Big Flicks and Reliance Communications, already operating in the movie rental business as well as internet services business. Other companies like Tata Sky and Airtel will have to explore the possibility of partnering with content companies like Rajshri.com who are in the online movie rental business.

The regulatory prohibitions to adopt any of the above points are yet to be verified like regulatory prohibition for conducting financial transactions like payments via DTH service. Some of the services that companies offer might not generate revenue but simply be for customer convenience like having flight status updates on TV or a directory listing for household requirements like list of local plumbers.

The above services might not necessarily be the best solutions for DTH service providers but DTH companies definitely have to start thinking beyond digital picture quality.

Here are a few other services that might not generate a lot of revenue but could be helpful to attract customer attention.

Pizza Delivery: This might not seem like a very big opportunity but according to estimates, total pizza industry is worth about Rs 2000 crores and is showing compounded annual growth of 20-25%. The set top box software could be easily enhanced to offer the subscriber the ability to order a pizza right using their TV. The nearest pizza outlet could be determined using the location details of the set top box itself. This could potentially reduce the load on the Pizza order call center operation and improve the net profit per pizza for the company.

Grocery shopping: The set top box software could be enhanced to offer a TV based grocery experience to its subscribers. The grocery items could be listed in category format like Grains, Cereals etc. There could also be a section to push special discounts. Ability to reorder items from your previous shopping list could be one of the features. One of the major hurdles faced by the grocery retail outlet is the lack of home delivery and the personalized service that a local grocery vendor provides. The DTH set top box could be embedded with customer business intelligence to personalize the experience.

Have been often my blog, Why don't you subscribe to our RSS feed.

If you enjoyed this post, make sure you subscribe to my RSS feed! Hope to see you again