Competitive Strategy:

INDIAN DTH
MARKET
• RELIANCE BIG TV
Submitted By:

Gaurav Kumar

Section ‘E’

08PG304
 Cracking the Indian DTH market

The author is discussing about the emergence of Direct-to-home

Service in the Indian Market. The Indian market was till now dominated by
the presence of local cable tv operators and had complete monopoly over it.
DTH opened an option for Indian Consumers to opt for the satellite service to
obtain television channels direct to their homes without any intermediaries.
It also provided several value added services to enhance their television
watching experience.

Still, as DTH is still a relatively new category and most people were
hesitant to experiment with it. While Indian consumers were not completely
satisfied with their cable services, they did not feel the need to switch over
to any other means of entertainment. It was therefore imperative for
companies such as Tata Sky, Dish TV, Reliance BIG TV to educate the
consumers about the advantages of the service and in turn create an urge to
invest in it.

Environmental Analysis of Indian DTH industry:

Here is the Porter’s 5 forces model in the context of DTH industry. The
observations are categorized into the 5 forces as below.

DTH faces stiff competition from Terrestrial, Cable and IPTV. As per the
industry estimates, there are 120 million TV homes, of which 71 million are
served by cable and 6 million served by DTH with the remaining taken by
Terrestrial Transmission.
Over the last three years, the direct-to-home (DTH) satellite industry has
come on strongly worldwide. It has grown from a niche delivery mechanism
into a mainstream business. The spread of subscription-based DTH satellite
TV promises to enhance choices for many households in developing
countries.

Current DTH Players in the Market:

• DD Direct
 • Sun Direct

• Dish TV

• Tata Sky

• Reliance Big TV

• Airtel Digital TV

Reliance Foray into the Indian Market:

Reliance’s BigTV launched its DTH service on August 15th 2008. BIG TV
was Reliance-ADAG's latest launch foraying into the booming Direct to home
segment in the expanding Indian television market. Big TV DTH was
competing with already established players Dish TV and Tata Sky. DTH
operators in the country, Tata Sky, Dish TV and Sun are estimated to have a
user base of around 7-8 million.

The service Reliance BIG TV included was 32 cinema channels, and will
be distributed via 700 distributors across the country. It is estimated that
India has over 124 million TV households, with roughly 80 million using the
conventional cable delivery platform.

Following are some of the features that Big TV is promoting extensively in its
advertisements:

1. Picture-in-Picture (PIP) that would enable viewers to watch

twelve TV channels at the same time on any TV set in the country.
2. Enabled by worlds most advanced MPEG4 technology Platform
for DTH services, BIG TV
3. BIG TV DTH service is available at 1 Lakh retail outlets,
including over 240 Reliance World and 2000 Reliance Mobile
Stores, across 6500 towns in the country.
4. First and only DTH operator to launch 32 Movie Channels and a
Subscription Video on Demand service.
 5. BIG TV’s Fully Digital Home Entertainment Service is
available at Rs. 1490 including three months complimentary
subscription. (1000/- Installation charges extra)

Reliance’s Strategy:

Reliance Big TV, a wholly-owned subsidiary of Reliance

Communications is targeting a 40 per cent share of the DTH market in the
next 12 months. Offering over 200 channels, Reliance Big TV would initially
be made available at 1 lakh outlets and across 6,500 towns. The 6 million
DTH markets with four players today are expected to add another 10-11
million subscribers with Reliance Big TV DTH joining the fray.

Reliance Big DTH would be tapping into the customer base of the ADA
Group’s other companies to build its subscriber base in the business. This
would comprise the 50-million customer base of Reliance Mobile, 5 million
customers of Reliance Energy, the 4 million of Reliance ADA Group
shareholders and the 2 million partners of the Reliance PCO channel.

Brand Marketing -

The new DTH brand is planning to tap into every type of media —
ranging from the net, hoardings, radio, print, and television along with
special experience zones to demo kiosks at TV outlets. There would be new
features, including subscription video on demand and a 32 cinema hall to
play movies according to the customers’ convenience.

Reliance Big TV would also use the ICC Champions Trophy beginning in
September to showcase its new DTH services as Reliance ADA Group is
already one of the sponsors of these matches. Besides, once Reliance Big
Broadcasting starts its own channels, it would offer the same on its DTH
platform as well. At the same time, Reliance ADA Group is also ready with its
IPTV services.

Current Position:

1. Reliance Big TV claims to have surpassed 1 million subscriber mark

within 3 months of its launch, with this Big TV holds 15 percent of the
market share. This announcement comes a month after Big TV touched
five lakh subscribers.
2. Recently Dish TV reached 4.5 million customers, thereby capturing 53
percent of the market share. So this segment, which is expected to
grow upto 10-12 million customers by November 2009, is certainly
gathering momentum.
 3. Catering to the masses, Reliance Big TV has expanded its retail
network to around 75,000 outlets across 10,000 towns which will
provide recharge vouchers (RCVs) for its DTH service.
4. BIG TV, India’s first fully digital and fastest growing DTH service,
achieved the 1 million subscriber mark, within 90 days of its launch.
Following this achievement, BIG TV has achieved a market share of 15
per cent in just 3 months in the fast-evolving Indian DTH sector, which
is nearly 60 months old in India.

Conclusion:

A few things are assured in the DTH industry even in the face of
paradigm shifts. First, the value of transponders is likely to fall as
compression allows more and more content to go through the same satellite,
and as more satellite are launched. Second, as bandwidth explodes, so will
demand for content. Obscure sports and the like will become more valuable;
conversely, much of the content that is currently valuable will face downward
pricing pressure. Niche content providers will emerge.

The industry is likely to be characterized first by a period of

fragmentation and then by an increasing concentration of global consortia as
unprofitable participants fold. What is clearer than ever is that satellite TV is
here to stay and will play role in bringing television to mass around the
world.