Market Watch

India's Dish TV Expands HD Lineup


Display Driver IC Forecast

Dish TV, India's largest pay satellite operator, has expanded its HD channel lineup, adding 30 new channels. This comes soon after Dish acquired additional satellite transponders in December 2010, iincreasing its broadcast capacity by 50 per cent.

With the addition of the new channels, the Dish truHD service now boasts a total of 35 HD channels. Previously carried HD channels include one each from the National Geographic and Discovery stables, two from sister-concern and broadcaster Zee Entertainment, and the recently launched English-language movie channel Movies Now HD. New channels added include 11 from the Zee group, as well as others from international majors like Turner/Time Warner (Cartoon Network, Pogo, WB, HBO), Viacom (MTV, VH1, Colors), Discovery Communications (Animal Planet, TLC) and Sony (Pix, AXN). Dish TV has also inked a deal with ESPN Star Sports (ESS) to carry the ICC World Cup tournament matches - which began on 17 February - in HD.

Alongside the expansion of its channel lineup, the operator has also cut its bouquet prices by 20 per cent - from Rs 2990 ($65.5) to Rs 2330 ($52). However, only one month of content will be bundled for free, as opposed to the two months previously included. A basic package containing 15 HD channels will cost Rs 125 per month ($2.70), while the remaining 15 HD channels are available a la carte at Rs 100 per channel ($2.20) per month.

Management at Dish TV have indicated that they expect to acquire between 300 and 400,000 HD subscribers by March 2012 - up from the 15,000 they currently have.

Analysis
Dish's HD channel expansion comes right in time to capitalise on the launch of the ICC Cricket World Cup, which started yesterday in Dhaka, Bangladesh. To cash in on the cricket hype, many of the DTH operators have already tied up with consumer electronics manufacturers like Samsung and LG to bundle their DTH subscriptions with the sales of flat screen TVs. IHS Screen Digest estimates that there are close to 8.9m HDTVs in India - around six per cent penetration of the installed TV base - a total expected to increase to 67m (34 per cent) by 2014.

However, getting these HDTV owners to subscribe to operator's HD packages has been another matter altogether. The key hurdle has been the lack of content. Although HD services were launched as far back as 2009 by Sun Direct (Sun Direct launches India's first HD service, 9 Apr 2009) and later in 2010 by the other satellite operators, it has so far failed to gain significant traction. The broadcast of the 2010 FIFA World Cup in HD did garner some HD subscribers for the operators, but it is believed that a proportion of these subscribers may have churned away on account of lack of additional HD content offered by the various operators since. At end 2010, we estimate that there were close to 42,000 HD subscribers in India - down from 53,000 the previous quarter.

A key question that now arises is how many of these new HD channels are in native HD, as opposed to being standard definition content that is simply upscaled to 1080i. Identification of native HD vs upscaled content has been known to be relatively easy for consumers, and India's satellite operators have to be careful not to over sell upscaled content as being HD and run the risk of damaging customers experience, as well as opinions.

Despite all this, we believe that 2011 will indeed be the year for HD in India. Satellite provider SES Sirius announced earlier this month that it had signed a multi-year lease for 12 transponders with an Indian satellite operator. Chances are that a significant portion of this new capacity will be used for delivering HD channels and content. Going forward, we expect to see enhanced HD offerings from Tata Sky and Airtel, while Videocon's d2h service has also indicated they plan to launch HD this year.

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