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DTH Industry

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					                                 Oligopoly Definition and Characteristics

              DTH Industry Introduction, How it works, History Of Indian Broadcasting

                                      Current Players in DTH industry

  Comparisn between DTH industry players total subscribers share V/s Cable Operators share

                        Revenue Structure, Cost Structure, Revenue Generated

                                             Complimentary Goods

                                            Michael Poter’s Five Force Model


Threat Of Substitutes    Threat Of Buyers         Threat Of Suppliers                                   Threat Of Rivals and
                                                                               Threat Of New Entrants
                                                                                                           Competitors
                                                                                Entry Barriers in DTH
                                                                                       Industry


                             Two ways of reducing Price War Between Competing Companies


                                  Cartel Agreement                             Game Theory


                                                     PEST Analysis
                                                     ADL Matrix
                              Industry Life Cycle, Driving Forces, OT Analysis
    Oligopoly is an abridged version of monopolistic competition .

It is a competition among few big sellers each one of them selling either
                  homogenous or hydrogenous products.
                Few Sellers


 Homogeneous or Differentiated Product


            Interdependence


           High Cross Elasticities


Importance of Advertising and Selling costs


               Competition


             Group Behaviour


               Price Rigidity
Direct To Home (DTH) is a distribution platform for multichannel TV
programmes on Ku band (high frequency of 11.7 to 14.55
Gigahertz) by using a satellite system which transmits signals
directly to subscriber premises.


The term predates DBS satellites and is often used in reference to
services carried by lower power satellites which required larger
dishes.
Product Technology and service
  processing
                         Videocon Group             DoorDarshan
By ZEE Group




      Anil Dhirubhai Ambani          Bharti Telemedia
              Group




                                    TATA Sons & Star TV
          Sun TV
            70

            60

            50

            40

            30

            20

            10

             0
                2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
                                                    (E) (E) (E)
% DTH to HH TV    1    2    3    3    9   13   17   20   22   24
% Cable to HH TV 55   59   61   64   64   62   60   59   57   55
           Market Share in %
           3% 2%

      5%

10%
                               Cable TV
                               Dish TV
                               Tata Sky
                               Sun Direct
                               Big TV

                    80%
Source : ACCEQUITY
Source :
ACCEQUITY
DTH & Cable industry
  are complimentary      An increase in sales/market
goods for TV Sales and     penetration of either of
       viceversa.           them lead to increased
                         sales/market penetration of
                                    other.
     Terrestrial Television


     Cable TV Operators


Conditional Access System(CAS)


             IPTV


          Online TV
  We would take the entire broadcasting
    industry for analysing the bargaining
power of the buyers. With enough options
      to choose both from the point of
  alternate mediums like Cable, IPTV and
Terrestrial broadcast and from the point of
increasing DTH operators, the consumers
            is at his will to decide




 Consumers will continue to have a high
bargaining power until DTH platforms try
 to differentiate them as superior players
      with better content and clarity
  Broadcaster


Customer Premise
Equipment (CPE)

  Availability of
  Transponders
With already 7 players in DTH space,
 threat of new entrants is relatively
    low. There is already enough
 competition which will discourage
  new firms to enter this business.
 While getting a license is relatively
easy, the barriers to entry are high
when it comes to pricing of CPE and
 getting the required transponders.
   There is a definite First mover
advantage which can be inferred by
comparing prices of Dish TV vs. Tata
 Sky. So any new entrant will face a
     high cost when it comes to
   equipment and transponders.
High initial setup cost of
                              DTH is a low margin
 satellite, transponder
                               and high volume         Cost of a set top boxes.
   and other higtech
                                   industry.
       equipment.



    Pricing has to be
                             Differentiation through
   competitive versus                                    Customer Service.
                                     content.
          cable.



    Multicultural &
                               Long gestation and
     Multilingual                                      High Cost of content.
                               break even period.
     Gepgraphy.
               Market Share in % (2009 Statistics)
35.00%
         31.62%
                                                         Mark Share in %
30.00%

25.00%             24.04%     22.98%

20.00%

15.00%
                                       10.68%   10.68%
10.00%

 5.00%
                                                             0         0
 0.00%
         Dish TV   Tata Sky    Sun     Airtel   Big TV Videocon      DD
                              Direct                                Direct
          Subscribers Share (In millions)- 2009 stats.
                     Subscribers Share (In millions)- 2009 stats.

 5.92

            4.5            4.3


                                        2            2


                                                                    0     0

Dish TV   Tata Sky     Sun Direct     Airtel      Big TV     Videocon DD Direct
   1. Cartel

2. Game Theory
A cartel is a formal (explicit) agreement among firms.

Cartels usually occur in an oligopolistic industry, where there is a small
number of sellers and usually involve homogeneous products.

Cartel members may agree on such matters as price fixing, total industry
output, market shares, allocation of customers, allocation of territories, bid
rigging, establishment of common sales agencies, and the division of profits or
combination of these.

The Indian DTH industry is still in nascent state. It is in growth stage and so
far no cartel has developed.

Given the nature of DTH industry (high volume) there will definitely come a
time when the industry will go through M&A
followed by catelizing.
                                              Videocon Strategies

                                  Cut Price                     Maintain Price

                                         DD 5000 Units                   DD 4500 Units


             Cut Price

Sun Tv                   DD 5000 Units                   DD 8000 Units
Strategies                               DD 7000 Units                   DD 5500 Units

      Maintain Price


                         DD 4000 Units                   DD 5500 Units
Economic Factors

              Factors            Unfavorable      Neutral     Favorable

     Currency Stability                                            √
     Gross Domestic Product                                        √
     Inflation Rate                    √
     GDP based on PPP                                              √
     Interest Rate                                                 √
     Budget Impact                                                 √




   Thus the overall effect of economic factors on this industry is Favorable.
ADL (Arthur D. Little) Matrix
Industry Life Cycle
                                                           Subscribers
                                                    Year   (In million)


                                                    2003       0.00


                                                    2005       1.00


                                                    2007       4.00


                                                    2009      18.70

Source :TV VEOPAR JOURNAL/ April 2009/ Page No:40
   OT Analysis

         Opportunities :
                                             Threats:

     Huge Untapped market
                                           switching cost
    Govt. in favors of industry
                                   Government policy/regulations
New products comes in the market
                                         IT developments
  Technology development and
                                      Competitor intentions
       Innovative Services
                                    Seasonality, weather effects
      Market development
                                    Lack of possibility of growth
   Industry or lifestyle trends