130mn digital pay-TV homes by 2020 to contribute $17 bn in revenues

22 Apr,2013

By A Correspondent


New projections released by Media Partners Asia (MPA) indicate that digital pay-TV penetration of TV homes in India will grow from 28 percent in 2012 to 54 percent by 2017, and reach 60 percent by 2020. Digital penetration of total pay-TV homes will double from 35 percent in 2012 to almost 70 percent by 2020. The projections are published in a new report called India Pay-TV & Broadband Markets.


“A successful start for the roll-out of digital addressable systems (DAS) has revived interest in pay-TV among strategic and financial investors,” said MPA executive director Vivek Couto, adding, “The real benefits will become clearer in 2H 2013 and beyond, as multi-system operators (MSOs) drive addressability and work with last mile local cable operators (LCOs) to ramp up tiering, billing and collections. Regulators are committed to curbing delays in the next phases of DAS, while the DTH industry is keen to revive growth by capitalizing on digital transition.”


MPA forecasts indicate that total digital pay-TV homes will grow from 47 million in 2012 to 110 million by 2017 and 130 million by 2020. This implies that the pay-TV industry will remain in a prolonged investment mode, with significant capital intensity. Both DTH and cable operators already have high levels of debt; as the larger phases of DAS come into play, the majority of additional funding will have to come through equity, via IPOs and M&A, the MPA report states.


Total industry revenues will grow at a CAGR of 11.4 percent between 2012 – 17 and 10.2 percent between 2012 and 2020, reaching US$17 billion by 2020 versus US$7.8 billion in 2012. Total pay-TV homes are expected to grow from 128 million 2012 to 167 mil. by 2017, and 183 million by 2020. Pay-TV penetration of TV homes will grow from 80 percent to 85 percent between 2012 and 2020, adjusted for multiple connections in a household.


Cable impact

Over the medium term, the majority of cable investments will be directed towards digital infrastructure, helping to build operator scale and improved addressability. In the long run, investments will be more focused towards acquiring primary subscriber points and the expansion of high-ARPU products such as broadband and HDTV. According to MPA, the total proportion of cable households with DAS climb from 15 percent in 2012 to 50 percent by 2020.


DTH growth

In the DTH space, concerns focus on the growth of active subs (i.e. paying customers, net of churn and subscriber suspension), which has moderated in recent times. MPA says that the growth in active subs will rebound however, as more markets undergo analog switch-off. MPA forecasts indicate that active DTH subs will grow from 32 million in 2012 to 64 million by 2017, and 77 million by 2020.



Subscription fees for pay-TV channels crossed US$1 billion in 2012, driven by the growing strength of aggregators. This growth has yet to factor in digitalization, which will result in a bigger share of subscription revenue for broadcasters. Operating margins will remain under pressure in the short-to-medium term, due to heavy investments in content for existing channels and gestation losses on new channel launches.


MPA expects total pay-TV channel revenues, including advertising and subscription to grow from US$3.6 billion in 2012 to US$6.6 billion by 2017, and to US$8.6 billion by 2020. The pay-TV ad market is expected to grow at a 10 percent CAGR over 2012-20, while broadcaster subscription revenues are expected to grow at 15 percent over the same period.


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