Managerial

Economics Project on
Market Structures

Rashi Singh
Sanyam Aggarwal
Srikanth Konduri
Varun Joshi
Surabhi Popli
Satyam Khandelwal

DTH Industry
Distribution platform for multichannel TV programs
by using a satellite system which transmits signals
directly to subscriber premises.
Simplified Working of DTH :
Broadcaster sends signals
Satellite receives signals
Dish Antenna of consumer receives signals
Set Top Box Decodes signals and
sends them to TV

DTH in India
Rs.3000 Crore Industry
Doordarshan - the only TV channel -

owned and operated by the Government

of India - TV set had its own antenna to
capture the signals
Cable Television Ordinance Law passed in 1995 Enabled cable operators to feed channels; later
private companies started airing their own
channel
This led to the explosive growth in no. of TV
channels and no. of cable operators (1,00,000

Advent of DTH
Shortcomings of Cable operators
Strikes
Increase in Tariff plan
Selective Broadcast
Poor Service

Arrived as immediate threat to the high-end cable

Networks, with major players like DishTV by Zee
group,
TataSky joint venture of Tata & Star TV, Big TV

Global Scenario

Source:
http://www.strategyr.com/DTH_Satellite_TV_Services_Market_Report.aspx

Market Penetration

Structure of Indian DTH Industry

DTH Market Share in India

8

2
30

13

22
25

Source: Business Standard News

Paper Monday 9th November 2009
page no.2

Dish TV
Sun DTH
Tata Sky
Big TV
Airtel
D2H

Herfindahl Index
Measure of the size of firms in relationship to
the industry
Defined as the sum of the squares of the
market shares of 50 largest firms within the
industry
The higher the HHI Index the more
oligopolistic is the industry.
For the Indian
n
2
H = si
DTH industry, H=2246
i=1

Substitutes
Good which is to some extent interchangeable
with another good
DTH is a new entrant, faces direct and stiff
competition from various service providers:
Terrestrial Television
a public service broadcaster nominated by the Government
of India
one of the largest broadcasting organizations in the world
enjoyed the monopoly for some time

Substitutes Contd.
Cable TV Operators
a huge demand of cable TV operators
poses a serious threat and stiff competition to DTH Industry

Conditional Access System(CAS)

provide the subscriber the choice channel he/she wishes to
view
very much similar to DTH

Substitutes Contd.
IPTV
service is delivered using the Internet Protocol
far superior than any other alternative

OnLine TV
offers users to watch TV programs online
with increased penetration of broadband connection, it can
pose significant challenge to DTH

Cartel
Formal (explicit) agreement among firms
Members may agree on such matters like
Price fixing
Total industry output
Market shares
Allocation of customers
Allocation of territories
Bid rigging, establishment of common sales agencies
The division of profits or combination of these

Complement Goods

Changes in substitutes and

complements over time
Changes in Doordarshan, DD Direct+
Changes in DD Direct+
Changes in CAS
Changes in IPTV
Changes in Online TV
Changes in Complement

Terrestrial Television:
Doordarshan is the public television broadcaster of India and a division of Prasar Bharati, a public service broadcaster nominated by the Government of India.
It is one of the largest broadcasting organizations in the world in terms of the infrastructure of studios and transmitters.

Cable TV Operators: In 1992, the government liberated its markets, opening them up to cable television. This led to astronomical growth of number of TV channels and created a huge demand of cable TV operators. The cable TV operators came in to the business and connect
urban & rural home to the private channels.

Entry Barriers in DTH industry

High Initial Setup & Operational Cost

DTH is a low margin and high volume industry
Non-Price Competition: Content differentiation
Multicultural & Multilingual Geography
Long gestation and break even period

Recent entries in the industry

Big TV from ADAG(Anil Dhirubhai Ambani Group)
Sun DTH by promoers of SUN TV
Digital TV from Bharati telemedia
D2H from Videocon

Short story of

BIG TV, achieved the 1 million subscriber mark,

within 90 days of its launch.
Captured the share of 15 per cent in just 3
months in the fast-evolving Indian DTH sector.
It has become the 3 rd largest player in very short
time and is positioned to challenge DishTV and
TataSky.
BIG TV poses very serious challenge to DishTV &

How about launching a new DTH

venture?