India Pay-TV Penetration to Top 60 Percent by 2020

MUMBAI/BALI: As the Asia Pacific Operators Summit (APOS) kicked off in Bali, Indonesia, today, Media Partners Asia (MPA) released new research on the Indian media market, projecting that pay-TV penetration in the country will rise from 20 percent in 2011 to 50 percent in 2016, reaching 61 percent by 2020.

"India’s digitalization timetable implies a three-year transition to full digital TV (DTV) conversion," commented Vivek Couto, executive director of the MPA. "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."

Subscription revenues are expected to rise at an 11-percent compound annual growth rate from 2011 to 2016, MPA notes, with the total number of subs rising to 172 million by 2016 and 199 million by 2020. DTH platforms, which had 29 million subs last year, will increase their customer base to 69 million by 2016 and 93 million by 2020, increasing their share of the pay-TV market to 46 percent in the next eight years (up from 23 percent last year). DTH industry revenues will reach almost $4 billion by 2016, and $6 billion by 2020. Digital cable subscribers are expected to number 33 million by 2016 and 48 million by 2020. Overall cable platform revenues are forecast to hit $6.4 billion by 2020, up from $4.2 billion in 2011.

MPA sees channel operators benefiting from digitalization and greater transparency in the pay-TV system, with increased subscriber revenues and lower carriage and placement fees. Pay-TV channel revenues should reach $6.7 billion by 2016 and $9.6 billion by 2020, up from $3.4 billion in 2011. Much of that—70 percent—will still come from advertising, MPA notes.