DTH Revolutionized!

Heavy losses and the growing competition have finally opened a few eyes in India's direct-to-home (DTH) industry which is now gearing up to make up for the huge deficit of revenue that it has been dealing with. The DTH Industry is looking at probable avenues such as advertising on its menu screens to increase revenue and cover up losses of around Rs 2097 crore as the income generated from the subscription money is not enough to cover up the losses.

If we do consider reports from the Hong Kong based research and consultancy Media Partners Asia Ltd, it seems that the acquisition cost for Indian DTH operators is around Rs 4,600 and the return on such an investment ranges between just Rs 85 to 200 as revenue generated per user.

The initiative it seems has got a good response from the DTH operators. Dish TV India is the largest DTH service provider in India and is promoted by Essel Group, after six years of operation, had posted Rs 56 crore losses for the quarter ended 30 September compared to that of Rs 154 crore a year ago. The company is now keen to improve earnings through a series of value add services like adding of weather report and stock market widgets or direct device download of web applications. These applications once downloaded would reflect as pop-ups on the menu screens. Also in the process, Dish TV is turning towards consumer goods firms in order for their interactive platform after their trial tie up with ICICI Bank.

In the words of Dish TV's chief operating officer ' Salil Kapoor said, "Our prime revenue is through subscription, but now we are also looking at capitalizing the advertisement revenue and making money from our value-added services".

On the same lines, India Biggest mobile phone company Bharti Airtel's unit Airtel DTH has also come up with introduction of new widgets. The company as of now hosts a number of interactive channels along with platforms like i-Travel and i-Matinee that provides space to advertisers along and is also an internet service provider. Its tie-ups with units like Minute Maid, Yahoo Inc and Maruti Suzuki India Ltd only signifies its long term deals on these channels.

Chief marketing officer, Airtel DTH, Sugato Banerji said, "Four of our nine applications are subscription-based, including i-Sports that comes at a price when a prominent tournament or sport is being aired".

Adding further he mentioned, "It is almost like a quasi-Internet platform except that it can be tailor-made to suit advertisers' needs".

Also DTH companies are now keen to exploit as much as they can through technology especially when the number of menu screens that can be used by the DTH operators are limited. And to give an example, promotions for the Bollywood movie Wake Up Sid was embedded by Airtel DTH in association with Maruti Suzuki India in the background for its channel guide. It also rented Yahoo its boot-up page for advertisement.

On the other hand, the second ranked Tata Sky Ltd which is the venture of the Tata Group & News Corp, has already implemented the theory with region specific advertising. The company that ownes Star Group Ltd in India claims that the Tata Sky viewers spend minimum of 34 minutes a day on interactive services of Cooking, Games and Astrology that offers scope for local advertising.

"Localized advertising has been most popular for test marketing," said Vikram Mehra, chief marketing officer, Tata Sky. "If a company launches products only in specific areas, then it makes huge business sense for it to use our DTH platform to advertise".

Mehra mentioned further, "There is huge potential for advertisers. We have big-ticket advertisers like Pepsi, Coke, Bajaj Alliance, Pizza Hut among a host of others that are on board".

Not to mention views of Sai Nagesh, chief growth officer for Dentsu Media India, "The DTH subscriber base, put at 16 million as per Trai, is still too small to make a serious claim on advertiser's money".

"Even the big-ticket advertisers look at it as an add-on medium to increase their value base, but DTH is growing fast. So within another 18 months, it should be an extremely viable option," Nagesh added.