DTH: 20 million users decline due to increase in bills
A sudden increase in cable bills have began to have an impact on the direct-to-home market with DTH operators witnessing an unprecedented 25 per cent fall in subscribers in the April-June quarter.
Lucknow: A sudden increase in cable bills have began to have an impact on the direct-to-home market with DTH operators witnessing an unprecedented 25 per cent fall in subscribers in the April-June quarter.
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According to a report by the Telecom Regulatory Authority of India, DTH services had an average active subscriber base of 54.26 million in the quarter ended June 30, a 25 percent drop from 72.44 million active subscriber base reported in January-March quarter. This coincides with the new tariff order implemented by the regulator from April 1.
The number highlights the challenges faced by DTH operators during the transition to the new tariff regime wherein consumers were to pay only for what they watched. The transition came with confusion, ill-trained customer support staff and forced ‘best fit packages’ from most of the players, leading to opposite results than initially intended.
The TRAI tariff order led to an increase in cable TV bills for most users in the country, forcing them to either cut down the number of channels they were subscribing to or move completely to cheaper or in some cases free video streaming services.
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The rise of OTT services such as Zee Entertainment’s Zee5, Star India’s Hotstar and Sony’s SonyLIV has clearly impacted the subscriber numbers as these platforms allowed consumers to watch TV shows for free, albeit with a few hours of delay in a move to pull more consumers towards their platforms. The paid versions of these apps also were charging a fraction of the average bill consumers were paying for their DTH subscription.
Reports from CRISIL and CARE Ratings showed that post the implementation of the tariff order, instead of seeing a cut down on cable bills, most consumers reported, on an average, about 25 per cent increase in their bills.
This turned some of the smaller channels like Bihar-based Dangal TV into the most popularly watched channels overnight, far surpassing the likes of Zee TV, Star TV or even Colors.
Experts feel the drop in DTH subscribers doesn’t come as a shock since there is a clear shift happening towards on-demand content.
“It is a cord cutting generation,” said Jayanth Kolla, founder at Convergence Catalyst. “With the increased monthly DTH bills, consumers are just not renewing their monthly DTH packages.”
High-speed and low-cost mobile Internet has further fuelled this by shifting consumption to mobile devices.
“With Netflix and Amazon and Hotstar, consumption has moved to mobile devices. Netflix launching its mobile-only plans just for the Indian market is the testament to this fact. With cheaper data and 4G speeds, people’s consumption is shifting towards mobile devices,” Kolla said.
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Some of the DTH operators are trying to work around this by partnering with OTT services. Tata Sky, for example, launched a new service called Tata Sky Binge, offering its current subscribers a free Amazon Fire stick and an OTT bundle for an additional ₹249 a month.
It is still not clear whether such partnerships will bring back consumers to DTH or push them away.