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Projections from industry analysts Media Partners Asia (MPA) indicate that India’s pay-TV industry will grow from $7.4 billion in revenue in 2013 to $12.3 billion by 2018, an average annual growth rate of 11 per cent. By 2023, MPA predicts that India’s pay-TV industry will generate revenues of approximately $16.4 billion.
The Indian market is important because of its accessibility for global media distributors and investors and its high levels of pay-TV penetration. Ever changing regulations are destabilising but the government’s Digital Addressable Systems (DAS) mandate will be an important catalyst while improved supply side factors, including healthy financial markets and investments from international strategics, are also critical.
According to MPA, India had approximately 65 million paying digital subscribers at end-2013. MPA projections indicate that 70 per cent of the Indian pay-TV market will be digitalised by 2023. Subscriber growth will remain strong between 2015-17 as DAS is implemented in Phase III and IV areas. After 2017, digital pay-TV subscriber growth will decelerate as consolidation and monetisation take priority.
MPA forecasts indicate that pay-TV subscription revenues will grow at a 11 per cent CAGR between 2013-18. In contrast to the industry’s volume-led growth between 2009-2013, the growth for the next five years will be ARPU-led. Total pay-TV subscribers are expected to reach 165 million by 2018 and 180 million. by 2023, implying long-term penetration of 80 per cent, adjusted for multiple subscriptions.
Beyond traditional cable and DTH, the MPA report states that there is a growing opportunity for alternative platforms, including the Doordarshan-owned Free Dish, headend-in-the-sky or HITS and OTT, to address a widening need gap between TV households and pay-TV subscribers.
DTH industry revenues will reach $4.0 billion by 2018, and $5.5 bil. by 2023. DTH industry revenue growth will be driven by robust subscriber additions over 2014-16 and by improved churn and suspension management. MPA forecasts indicate that the active DTH subscriber base will grow from 37 million in 2013 to 60 million by 2018, and 70 million by 2023. This implies that DTH will have a 39 per cent share of the pay-TV market by 2023, and a 56 per cent share of the digital market.
MPA projections indicate that total digital cable subscribers will reach approximately 50 million by 2018, and 55 million by 2023. Digital cable conversion will climb from 29 per cent in 2013 to 48 per cent by 2018, and 50 per cent by 2023. Digitalisation of cable networks will pave the way for growth in cable broadband. MPA expects the share of cable in the fixed broadband market to grow from 6 per cent to almost 15 per cent tween 2013 and 2023.
Broadcasters will continue to emerge as major beneficiaries of digitalization, capitalising on improved addressability and higher yields. MPA projects total pay-TV channel revenues for broadcasters, including advertising and subscription, will grow from $3.3 billion in 2013 to $6 billion by 2018, and US$8.3 billion by 2023.
The pay-TV advertising market is expected to grow at 8.6 per cent CAGR over 2013-23, while broadcaster subscription revenues are expected to grow at 11.3 per cent over the same period. Improved macro-economic conditions, sub-segmentation of existing genres and new advertiser categories will drive growth in advertising sales.
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