Dish TV: Value warrior
Will Dish TV’s tie-ups with shaadi.com, yatra.com and monster.com give it an edge over rivals?
The value propositions are hard to ignore: If Shah Rukh Khan is to be believed, you can get married, find a job or plan a holiday sitting at home. All you need is a Dish TV connection at home. The provider of direct-to-home (DTH) television has tied up with portals shaadi.com, yatra.com and monster.com to provide these services to its subscribers.
These, of course, are not the full services that you get on the Net from these portals. But they are intended to create some buzz around the brand. An ad with SRK is already on air. Other medium like radio too have been activated.
Dish TV is generally accepted as the largest player in the DTH market. Chief Operating Officer Salil Kapoor says it has 5.6 million subscribers. This gives it a 40 per cent share of the market. It has reported operating profits for two quarters now — three quarters ahead of guidance. And, says Kapoor, the company will be cash positive by the last quarter of 2009-10, again three quarters ahead of guidance.
But it is a crowded category. There are six players in the market place: Dish TV, Tata Sky, Airtel, Big TV, Sun Direct and Videocon. There are no subscription numbers available with third-party authentication. Industry estimates suggest there are 13 million subscribers. The industry is known to have huge losses on its books (2008-09 turnover Rs 1,800 crore). The men on the driving seats are therefore under pressure to wipe out the red ink from the profit and loss statement. Thus, Tata Sky is riding the huge equity of the Tata brand to push its service. Sun Direct is a price warrior and has capitalised on its goodwill in the South. And Airtel has worked on innovations on its services and backed it with a high-decibel campaign.
Who gains?
The initiatives taken by Dish TV begin to make sense. For the websites, hamstrung by low internet penetration in the country, it gives a huge expansion to their reach. “TV is a mass medium and has higher penetration as compared to the internet. Moreover, Dish TV is the largest DTH provider in India. Through this tie-up, we are definitely looking at increasing our member base by reaching out to every household,” says Shaadi.com Business Head Gourav Rakshit.
CHANNEL COUNT
Dishtv - 240
Sun Direct - 200+
Big TV - 200+
Tata Sky - 185
Airtel digital TV - 170
Videocon d2h (as per current website) - 160
TRANSPONDER CAPACITY OF 36 MHZ
Dishtv - 12
Sun Direct - 6
Big TV - 8
Tata Sky - 11
Airtel digital TV- 7
Videocon d2h - 6
Source: Industry
“Dish TV has a sizeable number of customers and that is something we could not have ignored. So when this opportunity came to forge an alliance, we did not bat an eyelid,” adds Yatra Online Founding General Manager (strategic relations group) Mudit Khosla. Little surprise then, Yatra.com offers discounts of Rs 200 on all domestic tickets and Rs 500 on all international booked on Dish TV. The cost is borne totally by the travel portal.
It also eases the pressure on the online as well as offline infrastructure of the portals. This was a crucial learning for Dish TV from its association with ICICI Bank, which it has clearly marketed well in the recent tie-ups. ICICI Bank offers facilities somewhat similar to the internet to Dish TV customers on television — the channel is called ICICI Active. The bank found that this reduced the pressure on its call centres, branches as well as websites. Recently, the bank gave a new look to the channel and loaded new facilities like loans and credit cards on to it.
The services are offered free to the customers of Dish TV. It has worked out various arrangements including revenue share, fixed fees and ad share with the three websites. Kapoor says it is still early days to discuss numbers. But Khosla says yatra.com has begun to get 30 to 35 extra orders everyday and this can be scaled up to 150 to 200.
This, incidentally, is not the first time these services are being offered on DTH. Tata Sky collaborates with Bharatmatrimony.com and Airtel with Makemytrip.com. Kapoor says this is the first time that all three are being provided by one DTH operator. In the days to come, he plans to load more services like home delivery of food and flowers. Again, Airtel has a tie-up with a leading pizza delivery chain.
Kapoor says none of his rivals will be able to match Dish TV in terms of value-added services. Dish TV, he claims, has the maximum number of channels on air as well satellite transponders in the sky (see tables). As a result, all others, he claims, need to choose between more channels and value-added services — something that doesn’t bog him down.
Right distribution
Content is one of the two legs of the business. Equally important is distribution. Of the 220 million homes in the country, around 130 million have a TV. And this number is growing at 4 to 5 per cent per annum. Of these, around 85 million are cable and satellite homes (including 13 million on DTH) and the rest depend on the terrestrial network owned by the government.
The DTH industry hopes to expand to 20 million homes by the end of 2009-10. Growth is coming from small towns and villages. In large cities, the cable operators seem to have got their act together. In the smaller markets, customers have jumped straight from the terrestrial network to DTH. The key, therefore, is to have as wide a distribution network in place as possible for sale and service support.
Rural sale across most categories happen on the hub and spoke principle — a sale office in a town takes care of all the villages in its vicinity. Dish TV, according to Kapoor, has a presence in 6,600 towns across the country and this takes care of more or less the whole country. All told, there are 45,000 Dish TV dealers. But the sale of the DTH box and antenna is one part of the game. Equally important is to simplify the recharge options in remote villages. Thus, Dish TV has 60,000 recharge points in the country and the number will rise to 100,000 by the end of the financial year. Two months ago, it had launched its mobile recharge service to leverage the high penetration of mobile phones in rural markets.
In fact, Dish TV has two more plans to make recharge easier in remote villages. One, it is in talks with the Department of Posts to stock its recharge cards in post offices. A pilot is expected to run in Punjab first before it is scaled up to the rest of the country. Two, it is encouraging its dealers of recharge coupons to stock other brands too so that their business becomes more viable.
Price, brand and features
Sun Direct has clearly positioned itself as a price warrior. Its installation charges are the lowest and so are its packages (of channel optio ns). Dish TV and others are higher, though not by a huge margin. It is an open secret that all companies are losing money hand over fist on set-top boxes, though Kapoor says Dish TV’s losses are the lowest on account of the large scale of its orders. Companies, in other words, make a loss when it comes to customer acquisition. So the import is clear: Like telecom, those with higher average revenue per user will emerge winner. The industry ARPU is estimated at between Rs 120 and Rs 130. Kapoor claims his ARPU stands at Rs 142.
Rivals have also tried to sell advanced features on the hardware. Tata Sky offered the facility to record programmes under Tata Sky Plus, a premium service. Dish TV had announced that it will follow suit. But the right price and performance equation seems to have eluded it so far. Airtel had launched services like one remote for TV and set-top box, and automatic revert to the last channel in case of a power failure. This doesn’t seem to bother Kapoor. “The unified remote gives only one added facility which is the power to the TV set. It’s nothing great,” says he. “We deliberately want our viewers to go the customer education channel whenever there is a power failure. Otherwise, he will never visit that channel.”
That may be fine, but Kapoor does admit that the Tata brand is a tough challenge in the market place. As a result, the contract with SRK has been extended by another 18 months. (Tata Sky has Amir Khan on its side.) Also, it has replaced its ad agency: Lowe will make way for McCann Erickson. Prasoon Joshi, who heads McCann in India, made the pitch himself. So you could expect some desi masala in all Dish TV campaigns in the near future.
Value warrior
Will Dish TV’s tie-ups with shaadi.com, yatra.com and monster.com give it an edge over rivals?
The value propositions are hard to ignore: If Shah Rukh Khan is to be believed, you can get married, find a job or plan a holiday sitting at home. All you need is a Dish TV connection at home. The provider of direct-to-home (DTH) television has tied up with portals shaadi.com, yatra.com and monster.com to provide these services to its subscribers.
These, of course, are not the full services that you get on the Net from these portals. But they are intended to create some buzz around the brand. An ad with SRK is already on air. Other medium like radio too have been activated.
Dish TV is generally accepted as the largest player in the DTH market. Chief Operating Officer Salil Kapoor says it has 5.6 million subscribers. This gives it a 40 per cent share of the market. It has reported operating profits for two quarters now — three quarters ahead of guidance. And, says Kapoor, the company will be cash positive by the last quarter of 2009-10, again three quarters ahead of guidance.
But it is a crowded category. There are six players in the market place: Dish TV, Tata Sky, Airtel, Big TV, Sun Direct and Videocon. There are no subscription numbers available with third-party authentication. Industry estimates suggest there are 13 million subscribers. The industry is known to have huge losses on its books (2008-09 turnover Rs 1,800 crore). The men on the driving seats are therefore under pressure to wipe out the red ink from the profit and loss statement. Thus, Tata Sky is riding the huge equity of the Tata brand to push its service. Sun Direct is a price warrior and has capitalised on its goodwill in the South. And Airtel has worked on innovations on its services and backed it with a high-decibel campaign.
Who gains?
The initiatives taken by Dish TV begin to make sense. For the websites, hamstrung by low internet penetration in the country, it gives a huge expansion to their reach. “TV is a mass medium and has higher penetration as compared to the internet. Moreover, Dish TV is the largest DTH provider in India. Through this tie-up, we are definitely looking at increasing our member base by reaching out to every household,” says Shaadi.com Business Head Gourav Rakshit.
CHANNEL COUNT
Dishtv - 240
Sun Direct - 200+
Big TV - 200+
Tata Sky - 185
Airtel digital TV - 170
Videocon d2h (as per current website) - 160
TRANSPONDER CAPACITY OF 36 MHZ
Dishtv - 12
Sun Direct - 6
Big TV - 8
Tata Sky - 11
Airtel digital TV- 7
Videocon d2h - 6
Source: Industry
“Dish TV has a sizeable number of customers and that is something we could not have ignored. So when this opportunity came to forge an alliance, we did not bat an eyelid,” adds Yatra Online Founding General Manager (strategic relations group) Mudit Khosla. Little surprise then, Yatra.com offers discounts of Rs 200 on all domestic tickets and Rs 500 on all international booked on Dish TV. The cost is borne totally by the travel portal.
It also eases the pressure on the online as well as offline infrastructure of the portals. This was a crucial learning for Dish TV from its association with ICICI Bank, which it has clearly marketed well in the recent tie-ups. ICICI Bank offers facilities somewhat similar to the internet to Dish TV customers on television — the channel is called ICICI Active. The bank found that this reduced the pressure on its call centres, branches as well as websites. Recently, the bank gave a new look to the channel and loaded new facilities like loans and credit cards on to it.
The services are offered free to the customers of Dish TV. It has worked out various arrangements including revenue share, fixed fees and ad share with the three websites. Kapoor says it is still early days to discuss numbers. But Khosla says yatra.com has begun to get 30 to 35 extra orders everyday and this can be scaled up to 150 to 200.
This, incidentally, is not the first time these services are being offered on DTH. Tata Sky collaborates with Bharatmatrimony.com and Airtel with Makemytrip.com. Kapoor says this is the first time that all three are being provided by one DTH operator. In the days to come, he plans to load more services like home delivery of food and flowers. Again, Airtel has a tie-up with a leading pizza delivery chain.
Kapoor says none of his rivals will be able to match Dish TV in terms of value-added services. Dish TV, he claims, has the maximum number of channels on air as well satellite transponders in the sky (see tables). As a result, all others, he claims, need to choose between more channels and value-added services — something that doesn’t bog him down.
Right distribution
Content is one of the two legs of the business. Equally important is distribution. Of the 220 million homes in the country, around 130 million have a TV. And this number is growing at 4 to 5 per cent per annum. Of these, around 85 million are cable and satellite homes (including 13 million on DTH) and the rest depend on the terrestrial network owned by the government.
The DTH industry hopes to expand to 20 million homes by the end of 2009-10. Growth is coming from small towns and villages. In large cities, the cable operators seem to have got their act together. In the smaller markets, customers have jumped straight from the terrestrial network to DTH. The key, therefore, is to have as wide a distribution network in place as possible for sale and service support.
Rural sale across most categories happen on the hub and spoke principle — a sale office in a town takes care of all the villages in its vicinity. Dish TV, according to Kapoor, has a presence in 6,600 towns across the country and this takes care of more or less the whole country. All told, there are 45,000 Dish TV dealers. But the sale of the DTH box and antenna is one part of the game. Equally important is to simplify the recharge options in remote villages. Thus, Dish TV has 60,000 recharge points in the country and the number will rise to 100,000 by the end of the financial year. Two months ago, it had launched its mobile recharge service to leverage the high penetration of mobile phones in rural markets.
In fact, Dish TV has two more plans to make recharge easier in remote villages. One, it is in talks with the Department of Posts to stock its recharge cards in post offices. A pilot is expected to run in Punjab first before it is scaled up to the rest of the country. Two, it is encouraging its dealers of recharge coupons to stock other brands too so that their business becomes more viable.
Price, brand and features
Sun Direct has clearly positioned itself as a price warrior. Its installation charges are the lowest and so are its packages (of channel optio ns). Dish TV and others are higher, though not by a huge margin. It is an open secret that all companies are losing money hand over fist on set-top boxes, though Kapoor says Dish TV’s losses are the lowest on account of the large scale of its orders. Companies, in other words, make a loss when it comes to customer acquisition. So the import is clear: Like telecom, those with higher average revenue per user will emerge winner. The industry ARPU is estimated at between Rs 120 and Rs 130. Kapoor claims his ARPU stands at Rs 142.
Rivals have also tried to sell advanced features on the hardware. Tata Sky offered the facility to record programmes under Tata Sky Plus, a premium service. Dish TV had announced that it will follow suit. But the right price and performance equation seems to have eluded it so far. Airtel had launched services like one remote for TV and set-top box, and automatic revert to the last channel in case of a power failure. This doesn’t seem to bother Kapoor. “The unified remote gives only one added facility which is the power to the TV set. It’s nothing great,” says he. “We deliberately want our viewers to go the customer education channel whenever there is a power failure. Otherwise, he will never visit that channel.”
That may be fine, but Kapoor does admit that the Tata brand is a tough challenge in the market place. As a result, the contract with SRK has been extended by another 18 months. (Tata Sky has Amir Khan on its side.) Also, it has replaced its ad agency: Lowe will make way for McCann Erickson. Prasoon Joshi, who heads McCann in India, made the pitch himself. So you could expect some desi masala in all Dish TV campaigns in the near future.
Value warrior
