Rural India Goes Digital Multichannel Satellite TV Pushes Into the Hinterland To Tap Huge Growth Market
By JOHN LARKIN Staff Reporter of THE WALL STREET JOURNAL October 3, 2005 http://online.wsj.com/article/SB112829847867958098.html?mod=technology_main_whats_news MUMBAI -- A satellite-television boom in India is finally pushing multichannel TV into its vast rural hinterland and opening a new commercial battlefield in one of the world's biggest TV markets. Places like Lodra, a village of two thousand people and a few hundred mud huts, 700 kilometers north of here in Gujarat state, typify the new phenomenon. At dusk, hundreds of people routinely gather around a TV set propped on a wooden table in the village center. They will watch until early morning, drawn by the 36 channels relayed from a satellite to a receiving dish on the ground. "The choice of channels puts us in a good mood after a hard day in the fields," explains farmer Madhabhai B. Thakor in a phone interview. Until last year, Mr. Thakor, like most rural Indians, he had to make do with just two of India's earnest but insipid public terrestrial channels. Now, he and his friends enjoy musicals in the local Gujarati dialect and anything with lots of fight scenes. Nearly three-quarters of India's 1.1 billion people live in villages like Lodra, making it one of the world's least-urbanized countries. While India's cable connections have tripled over the past decade to 61 million, rural households have missed out as cable companies see no profit in stringing kilometers of wire to reach remote locations. Enter digital television. Relying on signals transmitted from a satellite to a receiving dish and from there to a set-top signal-decoding box, rather than through cables, digital TV can transmit anywhere, delivering more channels and better picture quality. "Digital TV is going to change the dynamics of the Indian TV marketplace," says Vivek Couto of Media Partners Asia, a consultancy in Hong Kong, who sees a looming commercial battle between digital and cable companies. Mr. Couto expects India to have 12 million paying subscribers to digital TV by 2015 -- a huge jump from just 400,000 currently -- generating 45 billion rupees, or about $1 billion, in annual revenue. Cable connections are expected to exceed 70 million by then, he says. The spread of digital might occur at an even faster clip if India's Congress Party-led coalition government endorses broadcasting-industry proposals to raise the foreign direct-investment ceiling in direct-to-home TV ventures from the current 20% to at least 49%, the level permitted in the cable industry. There is pent-up demand for such service. India is the world's third-largest television market with 108 million TV-equipped households, a number that is growing by about nine million a year. But that still leaves half of all Indian households without a television set. Moreover, many existing TVs are old 14-inch (35-centimeter) black-and-white models that can't receive some satellite channels via cable, even if cable operators were willing to hook up remote areas for new subscribers. So, many villages have been left with only India's famously stodgy state-owned broadcaster, Doordarshan, where the programming emphasis is on informing the rural masses about farming techniques and health issues. "Satellite television can only rise in India, and rise very fast," says Atul Phadnis, an analyst at TAM India, a media research firm. "Direct-to-home television will be a huge catalyst." India's pay-TV industry is focused on cable operators and has nearly $3 billion in annual revenue, according to a recent Price Waterhouse Coopers study. But satellite can go where cable hasn't, which is into the increasingly prosperous rural market. R.V. Rajan, managing director at Anugrah Madison Advertising, a rural marketing concern in Chennai, says residents of India's countryside spend about $30 billion a year on everything from air conditioners to shampoo and household detergents. Aggregate rural spending power is growing about 25% annually. Pradeep Kashyup, another rural-marketing guru and chief executive of New Delhi-based consultancy Mart, says rural household income has risen quickly along with India's economic expansion. Rural households now earn nearly 60,000 rupees a year, still around half that earned by urban households. Mr. Kashyup contends that disposable income is actually higher in the countryside than in the cities because of a lower cost of living. Many villagers, he explains, own rather than rent their homes, while education and health care are mostly free. "New TV services will proliferate in the countryside very quickly," he predicts. "At the press of a button, [advertisers] will be able to reach every corner of the country." Media companies, local and foreign, are rushing to cash in. Zee Telefilms Ltd., India's biggest media company, says it is adding 3,000 new satellite subscribers a month to the direct-to-home service it started last year called Dish TV. "Half of these are coming from small towns," says Dish TV's chief executive, Sunil Khanna. News Corp.'s Hong-Kong based Star TV, which already operates some of India's hottest cable channels, will soon launch a direct satellite service in a joint venture with Tata Sons Ltd., the holding company of Tata Group, one of India's biggest industrial conglomerates. Even Doordarshan, the public broadcaster, is joining the fray. It is offering a satellite service with 30 free channels, including some broadcast by southern India's Sun TV, which has agreed to join Doordarshan's digital service. The public broadcaster requires its customers to purchase only a set-top decoder and a small satellite dish for 1,500 to 2,000 rupees. Doordarshan says its satellite signals can be picked up by the basic decoders already on the market, and it says more than four million decoders already have been sold to people wanting to view its programs. "No mass-market service can afford to ignore rural India today," says Vikram Kaushik, chief executive of Space TV, the name of the new Tata-Star TV joint venture. "There is a huge market waiting to be tapped." Kirk Johnson, a sociologist at the University of Guam who has studied the impact of television in rural India, believes satellite TV will change social and economic patterns as well, providing poorer country-dwellers with information they can use to improve their lives. Indeed, Mr. Thakor, the Lodra farmer, has used information gleaned from his village's new Doordarshan service to purchase a new type of cattle feed that produces more milk from his cows and makes his family an extra 45 rupees a day. He plans to use the extra cash to finance a truck purchase under a promotion he also saw on TV. "We didn't know about these things earlier, but they are good for people like us," Mr. Thakor says. ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 antunes at uh dot edu -- No virus found in this outgoing message. Checked by AVG Anti-Virus. Version: 7.0.344 / Virus Database: 267.11.9/118 - Release Date: 10/3/2005 Reply with a "Thank you" if you liked this post. _______________________________________________ MEDIANEWS mailing list medianews@twiar.org To unsubscribe send an email to: [EMAIL PROTECTED]
