TV subscription revenues set to grow at 21% : Ficci-E&Y

The television sector, which stood at Rs 13,000 crore in 2003, is expected to grow 17 per cent over the next five years, according to the la...

The television sector, which stood at Rs 13,000 crore in 2003, is expected to grow 17 per cent over the next five years, according to the latest data available with Ficci and Ernst & Young. This report is under the aegis of the Frames 2004 global convention on business and media being held in Mumbai. Subscription revenues are expected to go faster at 21 per cent and will be three-and-a-half times more than advertising revenues. Currently, subscription revenues are double that of advertising.

For 2003, subscription revenues grew 15 per cent to touch Rs 8,433.3 crore while advertising saw a 12 per cent increase to touch

Rs 4,216.7 crore, according to the report. Subscription includes cableTV fees and revenue for broadcasters from pay TV.

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For broadcasters, subscription accounts for 20-30 per cent of their total revenues. Just two-three year back, subscription comprised four-five per cent of their total revenues. “Subscription figures will see speedy growth, much faster than advertising,” said Farokh Balsara, head of media and entertainment practice, Ernst & Young.

Why is this the case? Cable and satellite households account for only 50 per cent of total TV homes.

These households comprise only 40 per cent of total TV homes, said Balsara. Contrast this with China where 95 per cent of the population has access to TV. “TV homes are sure to increase. This will lead to an exponential increase in revenues from subscription,” according to Balsara. Though 2003 saw the TV segment growing at 14 per cent, the growth was a little lower than expected.

“There was uncertainty over the Conditional Access System. Multi-system operator expansion was also slower. Also, MSOs expansion put on hold acquisition of last mile and technological investments,” Balsara added.

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For the industry with 44 mn cable and satellite homes, there is need for addressing these issues. Though CAS is a powerful concept, it was introduced a year ahead of time and failed because customers were completely ignored as it was made mandatory.

“MSOs like Hathaway Cable, Datacom and Asianet had raised funds to acquire last mile operators.But with the government announcing the introduction of CAS, that process was stalled. The cable TV industry in India is plagued with problems as MSOs control only 10 per cent of the last mile,” said Balsara.