Pay TV to rule market by 2011

As a direct result of the increased digitisation of the cable delivery system and high pay TV penetration, the Indian pay TV market will generate a turnover of $10 billion (Rs 42,000 crore) by 2011, up from $4.2 billion (about Rs 16,500 crore) in 2006.

Pay TV penetration in the country will reach 84 per cent of the television homes by 2011, up from 61 per cent in 2006. By 2011, there will be 107 million cable households, as compared to 71 million in 2006.

These are the latest findings on Asia's pay TV market by Media Partners Asia (MPA), an independent media research company headquartered in Hong Kong.

According to the report, 90 per cent of the television houses in the country will subscribe to the pay service by 2015, of which 37 per cent will have a digital set top box.

"We see mandatory and voluntary conditional access systems (CAS) boosting digitisation, and model digital cable subscription growing from a projected 1.35 million at December 2007 to 12.2 million by 2011 and to 22.6 million by 2015," MPA Executive Director Vivek Couto said.

The increased investments in the distribution infrastructure of the cable industry has led to an increase in the consumer demand for digital pay TV. The market added almost 1.2 million digital pay TV customers during the first three months of 2007 alone, boosted by the rollout of CAS and aggressive marketing strategy by two direct-to-home (DTH) service providers, the MPA report said.

"Such a trend, which is set to accelerate, should bring much needed addressability to the market. This is likely to provide a solution to problems associated with subscriber under-declaration and piracy," Couto said.

MPA forecasts the number of DTH customers will reach 38 million by 2015, from 1.9 million in 2006. The current industry estimates say that while Dish TV has acquired 2.7 million DTH subscribers, its rival TataSky has got close to 0.8 million subscribers.

According to the MPA report, DTH will enter a phase of mass adoption between 2008-12, adding 5-6 million net new subscribers per annum, with six operators likely to compete in the market.

"Aggressive subsidies on set-top boxes and installation costs, as well as competitive monthly rates will drive adoption, with breakeven likely to occur over five years," the report said.