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The FTA market, growth of Freedish and impact on DTH sector

MUMBAI: With broadcasters making their fresh content available on free-to-air (FTA) channels, the pay TV platforms including direct-to-home (DTH) operators are a worried lot.

The window for making fresh content available on FTA channels has reduced. Bigger broadcast networks look to grow their FTA channels, which have shown huge growth ever since BARC India started reporting rural data.

Almost 55% of India’s rural TV households are in the rural belt, making it a lucrative market.

However, pay TV platforms are unenthusiastic about this development as the availability of popular content on FTA channels is also fuelling the growth of Doordarshan’s free direct-to-home (DTH) platform Freedish.

In fact, Freedish alone had added a staggering 10 million customers last year, a feat that was not achieved even by all private DTH operators put together, Tata Sky CFO G Sambasivan revealed.

“Freedish has been there for a long time, but it has seen a huge growth in the last one and a half year. It has seen a growth of almost 10 million in 12 months, which is more than the entire DTH industry growth. We have problems because it is not showing any signs of deceleration,” he stated.

The strong subscriber growth and the scramble for slots among broadcasters had encouraged DD to hike the carriage fee base price to Rs 4.8 crore from Rs 4.3 crore. Freedish has already touched Rs 250 crore in carriage revenue in FY17, DD DG Supriya Sahu had said earlier.

Speaking at a panel discussion on ‘The free-to-air growth story: short-term gain or long-term pain?’ at FICCI Frames 2017, Sambasivan flagged the issue of the threat that Freedish poses to private DTH operators.

What is a short-term gain for broadcasters can be a pain for DTH operators. Sambasivan, however, exuded confidence that the growth of Freedish was good for the DTH industry in the long term as it would allow customers in the hinterland to sample a DTH service. As their aspirations grow, these consumers would upgrade to pay platforms.

“Earlier, there was a gap of at least six months before fresh content was aired on FTA channels, but now the gap is blurring. Now we see overlapping of content. A good 50–60% of the content is available on both platforms at the same time. This leads to non-parity. There has to be some demarcation of content. Otherwise, customers will have no motivation to move up,” Sambasivan pointed out.

Seeking to allay Sambasivan’s fears of an FTA onslaught against pay TV platforms, Viacom18 head of corporate strategy and business development Achint Setia said that the overlap FTA and pay audience was hardly 10%.

He also stated that India needed a strong FTA and pay market simultaneously. In fact, FTA platforms would aid the growth of pay TV platforms as consumers would evolve from free to pay.

Underlining the importance of growing FTA channels, Setia said that subscription revenue hardly contributed 30% to a broadcaster’s top line, thereby making advertising revenue extremely critical.

Echoing Setia’s sentiment, IndiaCast Distribution EVP Amit Arora said that Hindi GEC and movie channels were the only concern area for pay TV platforms as far as overlapping of content was concerned. He also noted that both pay and FTA platforms would co-exist.

Arora said that most of the consumers hopping on to the Freedish bandwagon were people from cable-dark areas.

Setia pointed out that the availability of TV content on free video-on-demand (VoD) platforms should be a bigger area of concern particularly with the fall in data prices.

He also said that a pay TV customer would not necessarily shift to an FTA platform just because the same content was available on FTA channels with a delay.

Sambasivan noted that Freedish was operating outside the regulatory framework as they did not have to pay licence fee. He hoped that Freedish would also comply with regulations going forward.

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