MUMBAI: Private direct-to-home (DTH) operator Dish TV has taken the surprise step of offering a package of only free-to-air (FTA) channels to counter pubcaster Doordarshan’s Freedish while also trying to tap into other low-end customer segments.
The new scheme, which does not include any pay channel, prices the package at Rs 1,149 (including taxes) for three years. The monthly subscription price translates into Rs 32.
Customers will get locked in for three years and can only view FTA channels at this price point. They can, however, opt for a la carte or add-on pay channels.
In order to make the offer competitive, Dish TV is offering over 100 FTA channels. Though the scheme is scheduled to run until mid-April, a source said that Dish TV has not taken a final call on whether it wants to extend the offer period.
Analysts see Dish TV’s new scheme as a move to fight back DD Freedish’s rapid growth in netting low-end customers. Though subscription-free Freedish has been in existence for a long period, it has seen staggering growth in the last couple of years. In fact, Freedish added a whopping 10 million customers last year, a feat that was not achieved even by all private DTH operators put together.
“Freedish has seen a growth of 10 million subscribers in 12 months, which is more than the entire private DTH sector’s growth. We have problems because Freedish’s growth is not showing any signs of deceleration,” said Tata Sky chief financial officer G Sambasivan.
Dish TV hopes to net Freedish’s customers who would be attracted by the quality of service and not mind paying a measly subscription fee. The cream of Freedish’s customers could possibly move. Still, it may not be fair to look at it as a head-on scheme as Freedish still has the advantage of being a free service.
There is another way Dish TV can possibly tap Freedish’s customers. For those who are upgrading from Freedish, Dish TV offers the entry point. They could sample Dish TV’s product and then potentially upgrade to a pay bouquet.
The idea is surely not to be playing in the FTA market but to get customers move in and then move up to a pay pack. It has to be FTA plus pay content.
“We are not targeting customers who are hardcore consumers of free content. They have to climb the ladder,” a Dish TV official told TelevisionPost.com.
The comfort in taking to such a strategy is that there is no content cost that Dish TV has to pay to the broadcasters as it is a cobbling together of FTA channels. Absolute operating profit also could be positive or might not get impacted, analysts said.
Churn could fall as the scheme also targets those customers who recharge late and would not mind having the service running through a parallel FTA package. Another target audience could be customers who basically consume FTA channels but sometimes want paid content.
“Those who go on vacations or are juggling between two locations are also the targets through this scheme,” the official said.
Dish TV, though, runs the risk of ARPU (average revenue per user) being dilutive if customers downgrade their packages.
Like other DTH operators, Dish TV’s ARPU has already been under pressure this fiscal, partly led by demonetisation. It has slid from Rs 174 in the first quarter of FY17 to Rs 151.4 in the quarter ended 31 December 2016.
“We do not expect downgrading to happen. We expect to add a new set of customers and also to reduce churn,” the official said.
The private DTH operators have added fewer subscribers in the first nine months of this fiscal than in the preceding year due to demonetisation of high-value currency notes and the absence of the cricket World Cup. On the net subscriber front, the three leading DTH operators combined—Dish TV, Airtel Digital TV and Videocon d2h—have seen a 17.05% fall in the nine months ended 31 December to 2.63 million compared to 3.17 million a year ago.
Dish TV’s subscriber additions stood at 855,000 in the first nine months of FY17 compared to 1,045,000 a year ago.
Will the new scheme target Phase IV areas of digital addressable system (DAS)? “We have separate packs targeting DAS Phase IV areas. Cable TV subscribers in DAS Phase IV who will have to switch to a digital set-top box (STB) by 31 March are already consuming pay TV content,” the official said.
Dish TV is looking to have 55–60% of its subscriber growth coming from DAS Phase IV areas. Even Tata Sky is looking at DAS Phase IV accounting for 55% of its new subscriber growth.
The new scheme, which does not include any pay channel, prices the package at Rs 1,149 (including taxes) for three years. The monthly subscription price translates into Rs 32.
Customers will get locked in for three years and can only view FTA channels at this price point. They can, however, opt for a la carte or add-on pay channels.
In order to make the offer competitive, Dish TV is offering over 100 FTA channels. Though the scheme is scheduled to run until mid-April, a source said that Dish TV has not taken a final call on whether it wants to extend the offer period.
Analysts see Dish TV’s new scheme as a move to fight back DD Freedish’s rapid growth in netting low-end customers. Though subscription-free Freedish has been in existence for a long period, it has seen staggering growth in the last couple of years. In fact, Freedish added a whopping 10 million customers last year, a feat that was not achieved even by all private DTH operators put together.
“Freedish has seen a growth of 10 million subscribers in 12 months, which is more than the entire private DTH sector’s growth. We have problems because Freedish’s growth is not showing any signs of deceleration,” said Tata Sky chief financial officer G Sambasivan.
Dish TV hopes to net Freedish’s customers who would be attracted by the quality of service and not mind paying a measly subscription fee. The cream of Freedish’s customers could possibly move. Still, it may not be fair to look at it as a head-on scheme as Freedish still has the advantage of being a free service.
There is another way Dish TV can possibly tap Freedish’s customers. For those who are upgrading from Freedish, Dish TV offers the entry point. They could sample Dish TV’s product and then potentially upgrade to a pay bouquet.
The idea is surely not to be playing in the FTA market but to get customers move in and then move up to a pay pack. It has to be FTA plus pay content.
“We are not targeting customers who are hardcore consumers of free content. They have to climb the ladder,” a Dish TV official told TelevisionPost.com.
The comfort in taking to such a strategy is that there is no content cost that Dish TV has to pay to the broadcasters as it is a cobbling together of FTA channels. Absolute operating profit also could be positive or might not get impacted, analysts said.
Churn could fall as the scheme also targets those customers who recharge late and would not mind having the service running through a parallel FTA package. Another target audience could be customers who basically consume FTA channels but sometimes want paid content.
“Those who go on vacations or are juggling between two locations are also the targets through this scheme,” the official said.
Dish TV, though, runs the risk of ARPU (average revenue per user) being dilutive if customers downgrade their packages.
Like other DTH operators, Dish TV’s ARPU has already been under pressure this fiscal, partly led by demonetisation. It has slid from Rs 174 in the first quarter of FY17 to Rs 151.4 in the quarter ended 31 December 2016.
“We do not expect downgrading to happen. We expect to add a new set of customers and also to reduce churn,” the official said.
The private DTH operators have added fewer subscribers in the first nine months of this fiscal than in the preceding year due to demonetisation of high-value currency notes and the absence of the cricket World Cup. On the net subscriber front, the three leading DTH operators combined—Dish TV, Airtel Digital TV and Videocon d2h—have seen a 17.05% fall in the nine months ended 31 December to 2.63 million compared to 3.17 million a year ago.
Dish TV’s subscriber additions stood at 855,000 in the first nine months of FY17 compared to 1,045,000 a year ago.
Will the new scheme target Phase IV areas of digital addressable system (DAS)? “We have separate packs targeting DAS Phase IV areas. Cable TV subscribers in DAS Phase IV who will have to switch to a digital set-top box (STB) by 31 March are already consuming pay TV content,” the official said.
Dish TV is looking to have 55–60% of its subscriber growth coming from DAS Phase IV areas. Even Tata Sky is looking at DAS Phase IV accounting for 55% of its new subscriber growth.
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