Digitization to up Pay TV penetration by 150% in 5 years, says MPA report

24 Apr,2012

By A Correspondent


Digital Pay TV penetration of TV homes in India will grow from less than 20% in 2011 to 50% by 2016, and 61% by 2020, a new report by Media Partners Asia (MPA) indicates. The key demand drivers will come from cable operators, six commercial DTH platforms, and DD Direct, the government-owned DTH platform. A gradual consolidation of last-mile local cable operators will become inevitable, leading to a shift in industry profits and value to centralized distribution platforms and broadcasters, the report observes.


Commenting on the findings, MPA executive director Vivek Couto said:

“India’s digitization timetable implies a three-year transition to full digital TV (DTV) conversion. This is ambitious though we believe DTV transition will occur but over a longer time frame. The industry will remain capital-intensive until 2017 at the earliest, due to the capEx requirements associated with digitalization. This will lead to more M&A and fund-raising activity in both primary and secondary markets. The sector’s improved transparency, scale and operating leverage will attract large domestic and international strategic players, who will play a key role in M&A activity. Our biggest concerns include: cable execution and capitalization, as MSOs transition from a B2B to B2C model; DTH satellite capacity; and the extent of regulation in the broadcast ecosystem. While digitalization is the result of policy progress, this has not been the case for investment and taxation policies.”


The report, entitled Asia Pacific Pay TV & Broadband Markets 2012, measures consumption and revenue generation across pay-TV and broadband industries in 16 Asian markets, including India, which the remains the key pay-TV market for Asia in the future.


MPA projections indicate that Pay TV industry subscription fees will grow at an 11% CAGR between 2011-16, driven by increased volume over DTH and digital cable. Total Pay subscribers are expected to reach 172 million by 2016, and 199 million by 2020. MPA projections measure Pay penetration after accounting for households that opt for multiple services. Using this definition, MPA estimates that Pay penetration will grow from 79% to 89% between 2011 and 2020.


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