DTH -- The Next Frontier

Direct-To-home

(DTH) TV distribution is one in which a large number of channels are digitally

compressed, encrypted and beamed from very high power satellites. The programs

can be directly transmitted to homes, using very small dish antennae and card

operated Integrated Receiver Decoders (IRDS). It normally provides a basic

service consisting of a certain number of channels at a particular cost.

DTH telecast hardly seems a big deal. So, why has this "not-so-new"

technology become the talking point? Traditionally, television and radio signals

are broadcast through antennae placed on high towers and this places a

limitation on their range or reach. In order to increase the range, either the

towers are raised, the strength of the signal increased or often both. As radio

and television broadcasting became common, there was a need to make the

transmitted message reach all over the globe, by means other than building

gigantic towers.

This is where satellite broadcasting came in. In the 1960’s, the first

generation of satellite services called C-band was introduced. This low-powered system requires a large satellite dish

antenna, usually measuring 4-10 feet in diameter, and can receive programming

from many different C-band satellites.

The satellite boom in India was based on C-band satellites, which operate in

the downlink microwave frequency band between 3.7 and 4.2 GHz.

Digital Broadcast Satellite (DBS) is a newer and more advanced method of DTH

satellite distribution. Since it operates with more power, its signal can be

received with much smaller, and therefore, more affordable dish antennae. DBS

satellites operate in the Ku-band of microwave frequencies between 11.7 and 2.7

GHz. It is such satellite services that Star TV and others want to introduce in

India.

DTH is a term used by the US Federal Communications Commission (FCC) to refer

to satellite television and broadcasting, and industries associated with it. DBS

systems are earth-orbiting satellites that receive signals sent by programmers,

such as the American pioneer, HBO. When the satellite receives a signal, it

amplifies it and beams it across a wide area, called its footprint, on earth. If

one lives within that swath, their personal 18-inch dish brings the signal into

a set-top box decoder, which translates it into an analog signal for a great TV

picture and CD-quality audio. You need the decoder because the signals are

scrambled and you have to pay the program providers for the decoders.

In 1945, Arthur C Clarke, the famous science fiction author, was credited

with the concept of establishing a global communications system using three

satellites placed in a geo-synchronous orbit, equidistant from each other. The

process took over 15 years to turn into reality from the realm of science

fiction, and it was in 1962 that the first satellite transmission took place

from France to the USA, via Telstar1. It was the adoption of an "Open

Skies" policy in the USA, in 1972, that encouraged private industry to

enter the satellite business. In 1975, HBO established its first operational

satellite broadcast system on Satcome1.

In fact, DTH is not something new for India. We were one of the first few

nations to implement information technology in education, through the successful

implementation of the Satellite Instructional Technology Experiment (SITE)

programme. India was selected by NASA in 1968 to receive free time on

Applications Technology Satellite-6 (ATS-6). SITE was primarily undertaken to

experiment with television, through satellite communication, to broadcast

special programmes to six rural clusters, which included a total of 2,400

villages. Its objectives were to improve rural primary education, provide

teacher training, improve agriculture, health and hygiene, nutritional

practices, and contribute to family planning and national integration. After a

year of broadcasting to Indian villages in 1975-76, the ATS-6 was repositioned

to broadcast again to the USA. This was, in a way, the first DTH project in

India.

It is not that we don’t have DTH in India. It is available on C-band, and

by allowing DTH on Ku-band, there would be a significant reduction in the size

of the dish antennae and an increase in the number of channels.

Though there was a proposal to introduce DTH earlier, it was scotched by the

Department of Telecommunications’ December 1996 order, which prevented the use

of dish antennae for receiving television signals in frequency bands above 4800

MHz, without a license. The move effectively banned the small dishes that

received high-intensity Ku-band transmissions used for DTH broadcasts.

Services

DTH telecast quality is superior to CATV, and users can

receive up to 200 channels. Star TV reports that the size of the DTH market in

India is approximately 100,000 households. However, the technology is such that

it can provide a lot of other high revenue generating, value-added services

like:

• Internet Access

• Video
  
  Conference

• Video On Demand
  
  (VOD)

• Home
  
  Security/Shopping/Banking, E-mail

• Pay Per View (PPV)

• Near Video On
  
  Demand (NVOD)

• Data Broadcasts

Cable TV Vs DTH

With cable television, you pay a one-time hook-up fee to the cable company to

string cable to your house, followed by a monthly service fee. With satellite

TV, you must purchase the hardware and the programming from a satellite program

provider. The hardware purchase is a one-time purchase. The advantage of this is

that, if you move or travel, you can take the equipment with you. The cost of

programming varies. When DTH is allowed, there will inevitably be a Cable Vs DTH

battle. Cable TV in India is relatively inexpensive, though the trade-off is at

the cost of picture and sound quality, as well as various other advanced

features that DTH offers, like parental lock (you lock out any channels that you

do not want your children to see), on-screen programming guide and upgradable

software–via the satellite.

Of course, the market will decide on who emerges as the winner in the Cable

Vs DTH battle. But, whether this technology gives the consumer more of a choice

in his entertainment/infotainment fare, or the cable companies rally to give

better service, the winner is going to be the consumer.

Tough Game, Worth Playing

Barriers



Governments,
in a climate of interlocking concerns, have often cautiously examined satellite

broadcasting.

• Trans-border flows & loss of national control:

The DTH end-to-end service value-chain is complex,

technologically sophisticated and includes almost all aspects of broadcasting,

such as satellite ownership/bulk leasing of transponders, large scale

broadcasting studios/up-link earth-station, acquisition/production/arrangement

of many programming channels, user-friendly creation of an Electronic Programme

Guide, sourcing/distribution/technical support of subscribers reception

equipment, elaborate marketing of DTH services, comprehensive subscription

billing systems and revenue collection, etc.

What becomes most significant is that the DTH operator and

satellite service provider usually controls all this directly. Presently, there

is no other service in broadcasting where one person controls almost all aspects

of the business directly. Therefore, a comprehensive regulatory framework is a

must.

• The transmission of culturally inappropriate material/Americani-zation
  
  of national culture:

Often, concern is expressed about the threat of foreign

broadcasting networks beaming in their programmes onto an unsuspecting Indian

public and the kind of programmes that are being beamed by media conglomerates,

which are merging into ever-larger mega-corps. These mergers are taking place

because the companies are trying to achieve economies-of-scale in a marketplace

where costs are extremely high.

Opportunities

Cost/Financing

• DTH is a very expensive game: This kind of high-tech
  
  endeavour is money intensive, and in fact, even abroad, various big
  
  companies have found that it is not an easy task to bring about
  
  profitability in DTH operations. India might have an impressive market as
  
  far as numbers are concerned, but nobody can really predict whether people
  
  will spend or not. It has been estimated that for a subscriber, a connection
  
  could cost Rs 15,000. A figure of Rs 500 per month has also been mentioned,
  
  though all this is a matter of conjecture. The advantage of DTH is that
  
  there would be many channels and much more clarity. Other than
  
  entertainment, DTH has potential in education and training applications, as
  
  was shown by the SITE experiment.

Much of the investment in DTH is likely to be the cost of

subsidising the set-top boxes.

The other crucial factor is the subscription fee per month.

In the UK, Zee’s DTH service sells at £1.29 (approximately Rs 100) per month.

At that price, ISkyB would be a steal. But Star’s intention is to price ISkyB

at a premium level, a value-enriched service that’s clearly out of competition

or comparison with cable. Sceptics feel that this is precisely the mistake that

could turn Star into a plummeting meteor. Channels may follow the revenue model

of a refundable deposit of Rs 5,000 for the box and a subscription fee of Rs 500

per month for the first 50-channels, with a nominal surcharge per extra channel.

A satellite channel’s approach to film buying is certain to

be a key strategy in this battle for Indian eyeballs. Another carrot for viewers

is big sports events. Since, ESPN and Star Sports have already merged and

running now as pay channels, all they have to do is buy, say, exclusive live

telecast rights to the World Cup and offer it only to DTH subscribers. If only

for the duration of that tournament, every cricket watcher in the country will

subscribe to DTH. Hopefully, once exposed to DTH, a large number will upgrade.

The Road Ahead

In conclusion, it has now been over a decade since DTH

satellite broadcasting began to show promise as a new technology capable of

widespread distribution of programs and services. In those early days, the prime

concern of many governments was that the spread of DTH satellite would result in

mass Americanization and a decline in the cultural values and ideas of their

people. The solution that has to be found is to maintain some form of national

control, ranging from outright ban on ownership of satellite signal receiving

equipment, to introducing licensing regimes, prescribing guidelines for program

content and placing limits on foreign ownership of broadcasting licenses or

ventures. India has to change its laws and policies so as to strike a balance

between the economic benefits of introducing new services, the consumer demand

for change and the government’s overriding interest in maintaining control

over broadcasting.

The DTH industry is still in its formative years in the Asian

market, as evidenced by the ever-evolving list of existing and potential DTH

operators. Equally, the level of change matches the state-of-flux in the

industry and in the applicable laws of the countries affected by DTH. It remains

to be seen how each country in Asia will strike the final balance in the

structuring of its laws and regulatory scheme to maximise the benefits of the

new technologies, whilst ensuring that the national and public interests in the

control and content of those services are protected.

Issues To Be Considered

• Universal service, broadcast of local TV signals,
  
  retransmission of broadcast signals, etc.
  
  
  
  The DTH operator is understandably inclined to use proprietary technologies
  in hardware and subscription management software systems, with the sole
  
  objective of keeping the subscriber-base fully captive. This technological
  
  approach seriously affects interoperability and compatibility between the
  
  competitive systems sacrificing the customer interests and the universal
  
  service.
  

• There should be co-ordination between the national
  
  satellite policy and the ITU to avoid transmission clashes.

• Foreign equity participation.

• Content control (advertising and programming guidelines).

• Cross-service restrictions between cable operators and
  
  satellite channels.

• Competition and pricing of services.

Recommendations

This article is extracted from a report prepared under the guidance of

Professor V Sridhar by Avinash Thakur, Samir Sudhir Adbe, Saurav

Banerjee, Vineet Agarwal and Yogender Kumar Tiwari, all second

year students at IIM Lucknow.