Projected subscriber base of 30 million on the DD Freedish platform by 2021, a net negative impact of Rs 90–110 billion on the total industry revenues over 2016–21 is estimated, the report said.
The Freedish projections take into account upgrade of Freedish subscribers to pay TV each year. Also taken into account is the inflow of incremental FTA advertising revenues to arrive at the potential impact of Freedish.
FTA channels will gain prominence in the upcoming annual budget-planning exercise of advertisers. Brands that have a substantial rural consumption base are now able to measure the performance of their ad expenditure.
Ad rates for FTA channels have grown significantly from where they were at the start of 2016. They have grown from one-10th of the pay GECs to being about one-fifth now.
On the flip side, though, the rapid ad revenue growth of the FTA genre in the near term could result in an adverse impact on subscription revenues in the long run, with a material number of subscribers in Phases III and IV, and new additions to the C&S fold, likely to find Doordarshan’s free direct-to-home (DTH) platform Freedish as an attractive option compared to pay DTH and cable TV.
“FTA channels are here to stay. Advertisers are yet to realise the full potential of this segment, and with categories like farm products, tractors, etc. coming in, the overall advertising pie is likely to increase. Subscriber movement to DD Freedish in DAS III and IV could put pressure on subscription revenues, but broadcasters need to clearly differentiate between content on pay and free platforms to alleviate this,” the report quoted Sony Pictures Networks India CEO NP Singh as saying.
• The continued resurgence of Freedish has ensured that broadcasters having an FTA presence on this platform is a given. Freedish is estimated to have garnered 22 million active customers at the end of 2016, providing a large potential viewership base to the broadcasters.
Towards the end of 2016, Maha Cartoon TV debuted on Freedish, signalling the entry of the kids genre in the FTA segment. A look at the Freedish channels outlines the breadth of the FTA content available to the end consumer across genres. However, the platform has negligible presence in Southern entertainment apart from the Doordarshan’s language channels, and the same may be a hindrance in terms of adoption of Freedish by Southern markets.
The growing interest in a slot on Freedish was evidenced by the 31st auction in October 2016, with DD garnering Rs 1.3 billion from renewals and addition of three new channels on empty slots. As compared to a base price of Rs 43 million, the average winning slot rate stood at Rs 48 million.
The February 2017 auctions saw a further increase in slot rates, with the highest bid at Rs 73 million as against a reserve price of Rs 48 million. With renewal of 10 slots and sale of three new slots, DD was able to garner Rs 0.66 billion. The platform also ramped up its channel catalogue to 104 from 80, along with an intention to start encrypting its signals from April 2017.
Talking about the Freedish challenge, Videocon d2h deputy CEO Rohit Jain stated in the report: “The content overlap with Freedish is a serious concern. Concept of windowing and differentiated content needs to be thought through. We are cannibalising long-term pay TV market for easy short-term money at the moment. With an estimated 150 million HHs for the pay TV market, each customer lost to Freedish is a long-term revenue loss for DTH and MSOs [multi-system operators].”
• The success of Freedish as a platform has been largely observed in the Hindi-speaking markets (HSM). With a greater proportion of Southern markets currently undigitised, pay TV platforms would look to garner additional market share in them.
• Almost all DTH players have launched Rs 99+ (add-on) entry-level packs to counter the Freedish value proposition, with the FTA channels a part of this package. The Freedish platform could also emerge as an intermediate medium for a subscriber coming into the C&S fold for the first time. Pay TV operators could use this opportunity to upgrade such potential users to a premium content viewing experience.
“While Freedish has indeed registered impressive growth in 2016, it has the potential of opening up new markets for distributors. With about 30 million HHs in India coming into the C&S fold, Freedish as a first step connection for them, as compared to analogue TV, presents an opportunity for the pay DTH market in the long run. Having said that, both broadcasters and distributors need to be cognisant of ensuring a pay TV subscriber continues to be delivered value for the share of his/her wallet,” the report quoted Tata Sky CEO Harit Nagpal as saying.