The Next Frontier

Thinking about the time when color television first brightened our living
rooms in 1982 would make many of us nostalgic. It started with the Asian Games
on Doordarshan and then came the superhit The Ramayana in 1987. But that was
just the beginning, as television broadcasting in India was destined to grow
bigger with the launch of cable TV in 1991.

Now it is DTH or direct-to-home which is slowly making its mark in the
industry. As technology advances, so does the picture and sound quality. In
India TV is viewed for almost two and a half hours a day on an average by an
individual. This is supposedly a very large number and is still growing at a
very high pace. The increasing number of hours spent on the TV per day is
perhaps the result of the ever increasing number of channels, better picture and
sound quality.

The journey from black and white to color to highly digitalized video and
audio quality though has been spectacular, there is still a long way to go.

Every second day a new television channel is launched, and this growth is
simultaneous to the broadcast industry witnessing new technologies. It has been
a while since DTH entered the cable industry but is set to mature. IPTV or
Internet Protocol Television is to hit the Indian market as well. As the way of
viewing TV changes, DTH or IPTV or something else, so does the technology that
makes it different.

The MPEG format is used in DTH and is making its name for high quality
picture and audio. Even though the DTH market is just over 5% of the total
cable, it is being widely accepted by the masses. With new players like
Reliance, Videocon and Bharti ready to bring DTH services, the DTH market is
sure to expand.

The New Wave

Recently Reliance launched its DTH cable network, Big TV in 6,500 towns. Sun
Direct that has been operating in South India also announced its entry into West
and North India. Both the players have offered unique selling points.

Big TV launched its movie channel on the basis of its observation of movie
preference among Indian viewers.

“The home entertainment market in India has a huge appetite for movies which
has been hugely undeserved till date. Big TV DTH would address this huge latent
demand by offering 600 new movies every year at complete digital picture and
sound experience,” says Arun Kapoor, CEO, Big TV DTH.

Sun Direct on the other hand is making an attempt to foray into its new
market by virtue of its pricing strategy.

“We are all set for a pan India launch of our services. We have spent time to
understand the regional customer needs which reflects in our packaging and
pricing structure. We have created strong logistics, servicing and marketing
teams across all regions to ensure that customers have the best of service and
DVD quality entertainment at an affordable price. Going by what we have achieved
in the four southern Indian states we are confident of replicating the same
model across other markets and our aim is to quickly ramp up operations to
emerge as the second largest DTH player in the country,” says Tony D'silva,
chief operating officer, Sun Direct.

Sun Direct attributes its success in South to the pricing and the
establishment of a strong distribution network. It has offer packages ranging
between Rs 15 to Rs 140 per month.

Both these have programs on MPEG-4 technology platform. Reliance is the first
DTH to have come out with MPEG-4 technology. Till now all DTH players like Tata
Sky and Dish TV have been offering MPEG-2 format to subscriber. Though both of
them are highly digital, MPEG-4 allows better transition and reception than
MPEG-2. Based on better picture and sound quality, Big TV will be able to
deliver significantly larger number of channels-around seventy channels more
than other DTH providers. Costumers can view around twelve channels at the same
time and then tune to the channel of preference. Functionaries like search,
sort, favorite list and parental guidance, etc are also available with Big TV.

According to Mahesh Prasad, president, Reliance Communications, India's move
toward digitalization is going to help DTH growth. He says, “India is moving
toward digitalization. People have started venturing into better sound and video
quality visualizing. Presently the penetration is not much in the DTH segment,
which is just 5%, and the other 95% of the cable structure is completely based
on analog. But the TV industry in this country is vast and expanding.”

MPEG-4 delivers DVD-quality video at lower data rates and smaller file sizes.
Creators of the popular Mp3 file format also known as MPEG-1 layer III,
developed the new AAC (advanced audio coding) which provides much more efficient
compression than what Mp3 gives with a quality rivaling that of uncompressed CD
audio.

MPEG-4 is ready to stream incredible quality audio and today in QuickTime.
With the free QuickTime Player or browser plug-in, one can play any compliant
MPEG-4 file. Streaming servers are also available to stream Mp4 files. And with
the QuickTime Broadcaster that allows broadcast of live events in MPEG-4, the
QuickTime workflow (broadcaster to server to player) is industry's best and most
cost-effective end-to-end, standards-based architecture.

That's not all; because hundreds of multimedia authoring applications are
built upon the QuickTime architecture, QuickTime instantly adds MPEG-4
capabilities to all these tools. This allows to immediately creating MPEG-4
content in programs such as Final Cut Pro and Adobe Premiere.

Airtel would also be using the MPEG-4 technology in its DTH network and is
planning to leverage every bit of Brand Airtel's footprint in the country, to
reach out to the maximum possible customers. Airtel has over 9 lakh outlets
across India, as of June 2008-end, through which it plans to sell pre-paid,
post-paid, and value-added services as well as leverage this network for DTH
services.

The growth is not without competition. According to a report by industry body
FICCI and PricewaterhouseCoopers, the segment will expand at 44% compound annual
growth between 2008 and 2012. In comparison, cable TV households are expected to
register a 2% growth. Also, government initiatives would help the upcoming DTH
market.

It is only recently that the government has initiated the process of digital
delivery through mandatory CAS implementation in fifty-five cities. Once the
mandatory CAS implementation is notified, it will open a vast market for DTH
operators and drive DTH penetration in the country.

“DTH is the next frontier that's poised for explosive growth and will
transform the idiot box to a smart box through convergence and interactivity,”
says Atul Bindal, president, telemedia services, Bharti Airtel.

The Government's Role

Trai, on the basis of interactive discussions with the broadcasters of pay
channels, in the context of rates and packaging of channels being offered by
them for DTH, has finalized the roadmap for speedy interconnection agreement
between the broadcasters and DTH licensees. The aforesaid regulation makes it
compulsory for the broadcasters to offer their pay channels on a-la-carte basis
in addition to bouquets, to the DTH operators. The broadcasters will offer the
same bouquets to DTH operators, as is being offered by them for non-CAS cable
distribution.

In addition, they are free to offer additional bouquets. The a-la-carte and
bouquet rates of pay channels, as reported by the broadcasters for cable TV
operations in non-CAS area, have also been put up on the Trai website. It is
expected that the regulation will facilitate and expedite the conclusion of
interconnection agreements among broadcasters and DTH operators, giving a
healthier and better business atmosphere.

Dish TV's CEO, Vinay Agarwal, says, “Licensing cable operators will
streamline and regularize the unorganized cable system in our country. This
might reduce the clutter among cable operators and also push them to deliver
better service and function in an organized manner.”

DTH license agreement requires the DTH operator to provide a set top box
which is technically interoperable among different DTH service providers, and
that the set top box should confirm to the standards laid down by the government
from time to time. At present, the standards prescribed by the government
incorporate, among others, MPEG-2 compression format as a requirement for the
set top box.

Now, due to subsequent technological development, MPEG-4 compression format
is available which results in considerable savings in the bandwidth and
transponder requirement. However, a set-top box based on MPEG-2 compression
format cannot be used for receiving signals of another DTH operator who is
employing MPEG-4 compression format, which affects the license condition
relating to technical interoperability.

After considering the need for protecting consumers' interests and also the
difficulties associated with upgrading millions of set top boxes already sold to
the subscribers, Trai has made recommendations on the issue of technical
interoperability and that the standards for DTH set-top boxes should be taken up
by the government with the Bureau of Indian Standards (BIS), so that the
standards laid down by BIS for DTH set-top boxes are updated for advanced
technologies. The cable players have also realized that digitalization is the
need of the hour and they also need to get ready to adopt the new mechanism.

Need for Digitization

A mass increase in all areas and entertainment has contributed significantly
to India's spectacular growth of 8%. A lot is being done in the field of
broadcast and one big thing that is happening is digitization. According to Team
NDTV (distribution and technology), “Digitization is a very important tool in
the broadcast industry to recover your investment quickly through all different
available medium like the Web, IPTV, mobile TV, airlines, DOOH (Digital
Out-of-home) Media, etc. If your content is digitized, it can be syndicated
worldwide quickly as per the required file format. Going by traditional format
delays content becomes quiet old. Today the market is growing at a very fast
pace and everybody needs content to fill the slots.”

Unlike news formats like DV25, NDTV shoots all its features on DVCPro50 which
ensures high digital picture. All special promos, title sequences, etc are shot
on the 1080i HD which is high definition. NDTV Imagine has DVCPro50 as its
transmission standard. All this shows how even channels in India are looking
toward digitization. Zee TV went digital when it became a pay channel. All
videos are recorded on a digital format which is uncompressed and later played
on a high-end video server, which can be upgraded to HD as well.

Viewpoints

Analog cable systems can carry about 80 channels, with nearly 500 channels
in India competing for these 80 slots and with digitalization this problem
should virtually disappear. An encouraging trend is that an increasing number of
analog operators are switching to digital because ultimately it is more
profitable. Launch of several DTH platforms is another major positive
development in the distribution scenario. DTH provides an excellent alternative
to viewers. It is expected that as DTH becomes cheaper and more affordable for
viewers it could see the biggest growth in distribution systems.

Videocon, through its media arm, Bharat Business Channel, which is expected
to launch in last quarter of 2008, will deliver DTH pay TV services with over
240 channels in eight languages under the name D2H+. Its services will be
powered by the Irdeto DVB SmartStart complete pay TV solution, which is designed
to ease the launch of new digital TV operations in a cost-effective way while
paving the way for a pay TV operator's future success.

Even as the technology gets upgraded to MPEG-4 from MPEG-2, older DTH players
like Tata Sky believe that this would make no difference to their market and
they would still be able to pull out with a better customer interface and
interactive applications. Since MPEG is just a compression standard, the picture
and sound quality would not differ. With more number of transponders they would
be able to provide equal number of channels as the new players. Vikram Mehra,
CMO, Tata Sky, says, “Tata Sky has twelve transponders which would allow us to
give our viewers equal number of channels as any other MPEG-4 adapted provider,
with the best in quality sound and video.”

Interesting, DTH players think that the much talked about IPTV would not be
an ideal competitor, as there is low broadband penetration in India. The
incremental cost of having a customer in some place would be really cumbersome
if there is no cable connectivity.

It is still expected that both DTH and the upcoming IPTV does good business
in the near future and provide the best quality and quantity to its viewers. The
Indian cable industry is a huge market with enough room for everybody, hence it
is difficult to see players wiping each other out, as India has 210 mn families
out which only 80 mn of them have cable at home.

Sunny Sen

sunnys@cybermedia.co.in