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"Tata Sky is bearing the loss" ------ what? You know, it's funny now... If Tata will bear losses they will not be here where it is today.
Well, every company has a gestation period. Before they enter the business, they always calculate and are aware of the potential losses in the years ahead. To get a DTH license, they have paid 1000s of crores. Add to that the various costs such as satellite transmission, subscriber acquisition, branding, licensing, installation and last but not the least, taxes such as entertainment tax.
Tata Sky can afford to bear losses for some years. That's because DTH is somewhat similar to Telecom business. It requires huge amount of capital expenditure and the recovery is slow. Thanks to competition from Anil Ambani's Reliance Digital, Zee's Dish TV, Sunil Mittal's Airtel, Dhoot's Videocon & Maran's Sun DTH.
By the way, you are dealing with Ratan Tata and Rupert Murdoch. They are huge Business Conglomerates and can afford to experience losses, hoping that someday revenue per user will be better and hope to earn profits too.
Another example: Zee was the only profit making channel in the Hindi General Entertainment Channel (GEC) space. Yet Star TV continued to run channels despite losses, due to parent company News Corporation's deep pockets. News Corp is owned by Rupert Murdoch. They localised their content in their Indian beam and thus channels like Channel V and their flagship channel Star Plus had to switch to Hindi and launched KBC. This re-launched Amitabh's career and put Star Plus as the No 1 Channel. Of course, now Colors apparently is No. 1 GEC and Star Plus No 2, I guess.
None of the DTH companies are making good profits or are experiencing losses. Publicly listed Zee's Dish TV is one of them. Take a look at their Year on Year Annual Report.
You can't expect profits from the first year or few years now, simply because the industry faces intense competition and high capital expenditure. They have to keep up with the competition. When Tata Sky launched TS+ and Tata Sky HD, Reliance launched their HD PVR at a much reduced price. Perhaps now they are turning the tables, by pricing their HD+ at Rs 3999. Its value for money. I am fully aware that soon or maybe few months from now, the Rs 3999 would be reduced than ever.
But that's competition and of course, technology made affordable 🙂
Well, every company has a gestation period. Before they enter the business, they always calculate and are aware of the potential losses in the years ahead. To get a DTH license, they have paid 1000s of crores. Add to that the various costs such as satellite transmission, subscriber acquisition, branding, licensing, installation and last but not the least, taxes such as entertainment tax.
Tata Sky can afford to bear losses for some years. That's because DTH is somewhat similar to Telecom business. It requires huge amount of capital expenditure and the recovery is slow. Thanks to competition from Anil Ambani's Reliance Digital, Zee's Dish TV, Sunil Mittal's Airtel, Dhoot's Videocon & Maran's Sun DTH.
By the way, you are dealing with Ratan Tata and Rupert Murdoch. They are huge Business Conglomerates and can afford to experience losses, hoping that someday revenue per user will be better and hope to earn profits too.
Another example: Zee was the only profit making channel in the Hindi General Entertainment Channel (GEC) space. Yet Star TV continued to run channels despite losses, due to parent company News Corporation's deep pockets. News Corp is owned by Rupert Murdoch. They localised their content in their Indian beam and thus channels like Channel V and their flagship channel Star Plus had to switch to Hindi and launched KBC. This re-launched Amitabh's career and put Star Plus as the No 1 Channel. Of course, now Colors apparently is No. 1 GEC and Star Plus No 2, I guess.
None of the DTH companies are making good profits or are experiencing losses. Publicly listed Zee's Dish TV is one of them. Take a look at their Year on Year Annual Report.
You can't expect profits from the first year or few years now, simply because the industry faces intense competition and high capital expenditure. They have to keep up with the competition. When Tata Sky launched TS+ and Tata Sky HD, Reliance launched their HD PVR at a much reduced price. Perhaps now they are turning the tables, by pricing their HD+ at Rs 3999. Its value for money. I am fully aware that soon or maybe few months from now, the Rs 3999 would be reduced than ever.
But that's competition and of course, technology made affordable 🙂
