Channel

Market condition

Proposals

Advertising

The advertising revenue continues to be the key driver of broadcaster revenue (~80 per cent). In 2010, the TV advertisement industry grew to INR 101.5 billion registering a growth of 14% over INR 89 billion in 2009. FMCG, Services and auto continue to be the top 3 sectors spending on advertisement on television. The cable TV industry is highly fragmented in India with about 50,000+ local cable operators (LCOs), 7,000+ multi system operators (MSOs).The top five MSOs account for less than 30% of the revenues of this industry. The industry is characterised by high underreporting of as much as 85% of the subscribers and very low average revenue per user (ARPUs) of around Rs.160. Nevertheless, the number of cable TV households increased from 68 million in 2006 to 74 million in 2010. The total number of DTH subscribers grew by over 60 per cent to reach around 35 million as at March 2011 end; DTH industry expected to add 11-12 million subscribers annually for the next couple of years. The primary issue is Cable with its low ARPUs continues to set a benchmark for DTH ARPUs. With no exclusive content and the additional burden of STB boxes and increased marketing costs, the ARPU continues to be limited by cable as buyers do not see a differentiation. Though broadband connectivity has improved and the number of broadband users has also increased, the connection speed is still not up to the level desired for seamless viewing. IPTV connections provided by government-run organizations such as BSNL and MTNL seem to be growing. However, industry estimates suggest that there will be less than one million IPTV users across India. With the arrival of 3G, some mobile players have started to offer mobile TV on 3G. Reliance and Idea are offering mobile TV on their respective networks. Though the tariff plans seem attractive, bandwidth remains an issue. Television content requires larger bandwidth than normal data service. If mobile TV is successful, it can substantially increase the reach of television. However, Indian viewers are used to watching TV on a bigger screen. It therefore remains to be seen how telecom players change this mindset. Licensing and Merchandising (L&M) has become an important source of revenue for television broadcasters in the recent past.

YTV contends it would be a top choice for youth brands trying to carve a niche for itself in the market. The company will give discounted ad slots in the first 2 month of its launch in order to lure prospective brands. The proposed implementation of digital cable services across the country would help consolidate the cable distribution with large organized players, bringing in transparency on subscriber declarations. This should lead to increased revenue realization for broadcasters like YTV. YTV plans to tie up with at least 2-3 major DTH operators for airing the channel in all Tier 1 and 2 cities starting with the 4 metros.

Cable Television

DTH

Internet

Mobile TV

With the number of fixed line broadband subscribers touching 100 million, YTV plans to tie up with BSNL to release its channel on the IPTV platform. This could be a strategic advantage in the long run as the target audience has high internet adoption rates. As the number of 3G users is set to explode over the next 2 years (its around 12 million in 2010), we believe mobile TV is going to be an important driver of growth in the future. Hence YTV plans to tie up with major mobile service providers to offer the channel on 3G. The channel plans to release CDs and VCDs of some its flagship programs. It also aims to tie up with retailers across cities to sell exclusive YTV merchandise like apparel, accessories etc in their stores.

Licensing, Merchandis ing