Over the last few years, there have been increasing discussions about the falling subscriber base for direct-to-home (DTH) satellite television providers.
Pay DTH TV has faced rough ride over the last few years.
Between the second quarter of the financial year 2021 (FY21), and the second quarter of FY23, the total number of pay DTH TV subscribers fell from 7.07 crore to 6.55 crore subscribers. Further, the current 6.55 crore subscriber base is lower than the number of subscribers in the same quarter of FY18.
The number of operators, too, has fallen from six in FY18 to four today.
The decline in pay TV subscribers was accelerated by OTT platforms offering a wide variety of content at reasonable prices and the tariff orders pushing television channels' prices.
The loss of 52 lakh customers over two years is alarming and has led to talks about the demise of television in India.
However, DD Free Dish, operated by Prasar Bharti, has seen strong growth over the same period.
Between 2017 and 2022, the satellite television provider saw its subscriber base almost double from 2.2 crore to 4.3 crore subscribers. This is in stark contrast to the decline in pay DTH TV has seen over the same period.
There are several reasons behind the success of DD Free Dish, with the most obvious one being the one-time cost for the consumer. After a small one-time installation cost, the customer does not have to pay any extra amount. This is unlike pay TV, where one must pay for the TV channels that one has subscribed to. As a result, it is an attractive option for the masses, especially bottom-of-the-pyramid customers, according to DD Free Dish's competitor Dish TV's annual report.
In terms of content, Dd Free Dish offers 167 channels for viewers, of which 77 channels are auctioned each year to private players, and the balance is channels operated by Doordarshan.
Since the service is free, and there are only one-time costs that the customer needs to pay, DD Free Dish makes money by auctioning channels.
Leveraging its reach of 4.3 crore subscribers (households), DD Freedish auctions its channel slots to broadcasters who want access to these audiences.
In FY23, DD Free Dish mopped up nearly Rs 1070 crores by selling these slots to private television channels.
The auctions are divided into buckets based on the type of content to be displayed by the channel. For instance, the A+ category refers to the ten slots of General Entertainment channels, while the 'A' category refers to the movie channel bucket with 19 slots.
The fight for securing a slot has been getting hotter each year.
The movie segment saw total revenue of Rs 329 crore for 19 channels, implying an average of Rs 17 crore per channel. In contrast, only 16 channels were sold last year for a cumulative price of Rs 166 crores - implying a price of Rs 10.3 per channel. Overall, the revenue earned by Prasar Bharti in 2023 from the auctions was higher by 66 per cent over the previous year.
Despite opposition by some news broadcasters over the fewer slots for news channels this year, the auctions went smoothly, with the boycotting news broadcasters participating in the auctions.
Even some channels that had been withdrawn from the DD Free Dish have paid hefty fees to re-launch themselves on the platform. After all, the only way these channels can attract advertisers is by showing their substantial reach - making it necessary for these channels to be a part of DD Free Dish's set of offerings.
No other satellite TV provider has the kind of reach that DD Free Dish does, making the Rs 14-16 crore investment worthwhile for operators.
A significant portion of broadcasters renews their membership each year, indicating the network's wide reach.
DD Free Dish's strongest reach is in states like Uttar Pradesh, Jharkhand, Rajasthan, Bihar and other Hindi-speaking states. As a result, the bidders are broadcasters who operate Hindi channels.
It would be difficult for DD Free Dish to grow its reach into households that prefer vernacular content since its content is mainly in Hindi. At the same time, a household that prefers vernacular would not install the dish since it doesn't have the content they're looking for – making it a vicious cycle for DD Free dish's expansion beyond the Hindi-speaking states.
Nevertheless, the success of DD Freedish is a sign that the traditional media platform isn't dying out as quickly as expected.
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