Chapter­ 6 

FINDINGS AND SUGGESTIONS 

The data collection through survey has been conducted keeping in view the
objectives of the research .The collected information has already been discussed in the
previous chapters. The main findings, conclusions and suggestions are discussed in this
chapter.

6.1 Findings:

1. No single reason could be attributed behind the choosing of the particular DTH
service provider by the respondent. Infect number of reason exists behind taking
decision regarding the service provider.
2. The interactive services, number of channels, and price of the DTH services were
the factors considered by subscriber for selection of the DTH service provider.
Interactive services are innovative services which were not available in any form
of electronic entertainment medium.
3. Dish TV and Tata Sky were the top two DTH service providers and are preferred
by the respondents. Dish TV was the first private sector service provider which
get advantage of first mover while Tata Sky although came after Dish TV, but
brought various new interactive services at comparative price and forced Dish TV
to adopt comparative price.
4. The general entertainment channels and music channels were the main
constituents of the basket of channels preferred by the respondents because
majority of subscribers like channels related to these programmes.

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5. Radio and television together were the preferred means of entertainment prior to
advent of DTH for the subscribers due to their low cost and handy feature. These
means are popular among all strata of society.
6. Doordarshan and cable network together were the preferred means of
entertainment for the respondents before the advent of DTH services. The main
reasons behind this were audio-visual entertainment, comparative price and
variety of options in terms of various new and innovative programmes.

7. The monthly tariff plan was the most preferred tariff plan amongst the
respondents covered under the study due to their conveniences subscribers
chooses this plan for payment.
8. The respondents were mostly satisfied with services offered by their DTH service
providers because in present competitive scenario every DTH service providers
are trying to attract subscribers through various sales promotion strategies by
which subscribers are enjoying king’s status.
9. The respondents covered in the study were highly satisfied with the price offered
by the service provider. One main reason for this is that all DTH service providers
are launching various top-up packages related to sports, entertainment, movies
etc. Thus subscribers are get plenty of options to watch their favorite channels by
paying nominal amount.
10. The respondents were highly satisfied with the quality offered by the DTH service
providers because of competitive environment DTH service providers are trying
to provide quality programme with superior quality of broadcasting.
11. The respondents were satisfied with the payment mode options offered by the
DTH service providers. Majority of subscriber opt for monthly payment system
according to his convenience so they were satisfied with the payment mode.
12. The majority of respondents were satisfied on all parameters (Price, Technology,
Interactive services and Payment options of DTH service providers) with their
DTH service providers.

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13. Majority of respondents were not willing to change their DTH service providers
because their service providers are upgrading their services in terms of
broadcasting quality, number of channels and interactive services at competitive
price.
14. Majority of respondents were in favor of DTH services and cable TV network
services co-existing because Government had introduced Cable network
(Amendment) Act which makes digitization of cable network compulsory.
15. Low Average Revenue per User was the prime concern for all DTH service
providers. In present cut-throat scenario every DTH service providers are bearing
loss on set top box, hiring new channels and by adding new interactive service in
their bouquet of channels which ultimately decrease average revenue per user.
16. Excessive taxes on DTH service were cause of concern for the service providers.
The DTH service providers are paying multi tax i.e. entertainment tax,
commercial tax.

6.2: Validation and Testing of Proposed Hypothesis

The researcher has based his research work on certain hypothesis. After conducting the
entire research work, the hypothesis test reveals the following results:

6.2.1. After analyzing the collected data of DTH industry the researcher find that, all
DTH service providers are applying different sales promotion strategies for
selling their products and services, this has been discussed in detail in chapter four
and five of the study, in a particular time period.

Thus the first proposed hypothesis that All DTH Service Providers Use
Different Sales Promotion Strategies is supported by the collected data hence
accepted.

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6.2.2 The researcher has observed by analyzing primary and secondary data in chapter
five that all DTH service providers are trying to attract subscribers of all income
group of urban and rural population. Moreover the data also indicates that more
than 70% of revenue is generated from small town and rural areas mainly from
middle income group.

Thus the second proposed hypothesis that All DTH Service Providers Target
Only Higher Income Group Subscribers is not supported by data hence
rejected.

6.2.3. DTH is a technical innovation and comprises so many technical aspects –

products, interactive services .To exploit technology profitably every DTH
Service providers are using different technology in their products and service. The
detail description of the technology used by various DTH Service providers has
been discussed in detail in chapter four and five of the study. Thus the third
proposed hypothesis that All DTH Service Providers Use Similar Technology
for Their Services and Products is not supported by the collected information
hence rejected.

6.3 Suggestions

In order to develop and sustain market share in the present competitive business
scenario it is imperative for business organization to be aware of the environment and the
economic state of affairs in relevant area.

Hence the business is highly dynamic a successful venture has to constantly

analyze, adopt and change according to the situation and different set of conditions. The
business models that work in a specific set of conditions could collapse in another
situation. An organization will have to be aware of its own strength, weakness and be
aware of opportunities that present themselves from time to time .Equally important is
being aware of the threats posed by others. The DTH service providers could improve
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their profitability, efficiency, productivity. They can add new subscribers and retain their
old subscribers if they have a more holistic approach of the market scenario, while
framing their policies, plans and strategies.

The researcher would like to suggest certain measures that could be considered by the
Direct to Home service providers.

1. DTH service providers should be transparent in dealing with the subscribers. If

they timely update their subscribers about any change in plan, introduction of
new channels on the network and other development through personalized
communication it would strengthen the bridge between the subscribers and
service providers. It would result in creation of goodwill and in attracting new
subscribers through reference of existing subscribers.

2. Service packs should contain variety of channels and must include most popular
channels for each class of subscribers.

3. Reasonable prices packages should be designed to meet requirements, choices of

various target viewers.

4. DTH service providers should no longer focus on volumes alone and should try to
focus on active subscribers so that they can get regular income. Service providers
should never sacrifice active subscribers for volume subscribers.

5. The service providers would gain by bringing the intermediaries in the loop and
educating them through exposure to the technology and functioning of the
organization. Technical knowhow and explaining them the benefits of being a part
of the organization. As the affinity and familiarity with the organization develops
the business associates would become stronger and they would be in a position
to handle the queries and clarify the doubts of existing and new subscribers of the
services.

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6. The service providers would be benefited more if service providers provide

proper technical support and assistance to the business associates, regarding
installation and handling of subscribers grievances.

7. DTH service provider should have extensive distribution network and efficient
operation to cover more area .It would be profitable for DTH operator if they have
their reach with good quality in remote areas which are still cable dry and cable
frustrated.

8. DTH service providers can increase their A.R.P.U (average revenue per user) and
subscribers base by the possession of exclusive content like-game, music,
dedicated channels of different programmes , story . For this DTH service
providers should tie up with cinema production house, applications (apps) and
game developer, music copyright holders to enrich their content which may result
more profit in terms of increase in A.R.P.U. and in market share.

9. DTH service operators should recognize the rising importance of regional

linguistic market and should try to expand their regional footprints in various
other regions to increase subscriber base.As regional channels accounted for a
substantial part of all India television viewership, with Bengali and Marathi
channels gaining viewership along with South Indian channels. Internet based
services are a fast-growing segment, and Indian DTH service providers should
think about profitable use of this technology to satisfy subscribers in ever
changing technological environment. This would help not only in adding new
subscribers but also in retaining of existing subscribers by updating them with
emerging technological innovations.

10. The upgradation of technology should be high on cards for the DTH service
providers like better Compression technology (technology used to compress data,
audio, video, images, in such a manner by which large data can be store) enables
platforms to be more effective and carry more channels without compromising on
quality and provide compatibility to launch various new programme, game and

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services. Thus DTH service providers must make possible the up -gradation of
technology.

11. Direct to Home service provider should exploit the expanding private FM market
and should add more FM channels in their bouquet to cater subscriber’s
entertainment needs. As INDIA is looking forward to awarding of FM phase-III
licensing. The phase-III expansion will extend FM radio services to 227 new
cities, in addition to the present 86 cities, with a total of 830 new FM radio
channels in 294 cities. India's growing middle class, rising disposable income,
high volume of content consumption, and conducive regulatory environment hold
significant growth potential for all segments of the broadcasting industry.

12. DTH service providers should add more options in Video-on-Demand segment.
As Video on Demand is one of the most compelling services a Direct to Home
service provider can offer. It is a real catalyst for growth and has proven to be
highly effective in increasing subscriber growth whilst simultaneously reducing
churn and increasing ARPU.

13. DTH Service providers should launch more services on pay per use basis. These
can be considering as important reasons to opt for DTH service.VAS (value added
services) and HDTV (high definition television) would provide a boost as well as
the impact of up-selling in untapped class of subscriber group . So service
providers must use high definition technology for more channels. Presently Value
added services are major attractions of DTH service.

14. To expend their sales DTH service provider should sign corporate agreement with
other businesses to provide free DTH connections with every purchase of
product.This can be done by signing agreement with various established network
companies, T.V.manufacturing companies.

15. Distributor and subscribers both are significant for growth and development of
DTH service.DTH service providers should target both by applying various push
and pull strategies to promote their brand.
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16. DTH service providers should provide easy subscription payment ways to
subscribers. Door to door Collection of subscription fee would be convenient for
subscribers.

17. DTH service provider should provide preview options to their

subscribers.Preview of unsubscribed channel would help subscribers to know
about those channels which may motivate subscribers to subscribe these channels.

18. DTH service providers association should try to convence the government for
relaxation of taxes.In spite of its fast growth DTH is still in nascent stage and
suffering from number of taxes i.e. entertainment tax, commercial trade tax,
service tax. Government should try to provide relaxation from heavy tax. By
providing a single tax structure at lower rate of taxes Government can help DTH
services providers’ especially new entrant because due to above mentioned
reasons it’s not possible for any new entrant to earn profit in starting phase of its
operation.

6.4 Digitization of Cable T.V.

Digitization is the process of converting information into a digital format. In this format
information is organized into discrete units of data (called bits) that can be separately
addressed (usually in multiple-bit groups called bytes).This is the binary data that
computers and many devices with computing capacity can process... Thus digitization
simply means that cable TV will bring digital signal to your doorstep. With this
technology subscribers will get superior picture and sound quality, a large bouquet of
channels, choice of channel, games and movies on demand. It simply means that cable
TV will bring digital signal to your doorstep. With this technology subscribers will get
superior picture and sound quality, a large bouquet of channels, choice of channel, games
and movies on demand.

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Government had notified necessary amendments in Cable Television Networks Rules

1995 to create an enabling environment for Cable TV digitization. TRAI had also brought
out necessary regulatory framework by notifying Tariff, Inter Connection, Complaint
Redressed System and Quality of Service Regulations. Ministry of Information and
Broadcasting has also issued 53 provisional registrations to MSOs to operate in DAS
areas.

The plan is for complete digitalization of cable television in the four metros by October
31, 2012. The next target will be cities with over 10 lakhs population by March 2013.By
the end of 2014, the entire country is scheduled to have phased out analogue cable TV.

Exhibit no. 6.1

Phases of Digitalization of CATV in India
State/Union
Phase City/Town/Area Date
territory
Phase -
1. Municipal Council of Greater Mumbai area Maharashtra 31th October, 2012
1
2. National Capital Territory of Delhi Delhi
3. Kolkata Metropolitan area West Bengal
4. Chennai Metropolitan area Tamil Nadu
Phase -
1. Bangalore Karnataka 31st March, 2013
2
2. Hyderabad Andhra Pradesh
3. Ahmadabad Gujrat
4. Pune Maharashtra
5. Surat Gujrat
6. Kanpur Uttar Pradesh
7. Jaipur Rajasthan
8. Lucknow Uttar Pradesh Continued in next page

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9. Nagpur Maharashtra
10. Patna Bihar
11. Indore Madhya Pradesh
12. Bhopal Madhya Pradesh
13. Thane Maharashtra
14. Ludhiana Punjab
15. Agra Uttar Pradesh
16. Pimpri - Chinchwad Maharastra
17. Nasik Maharashtra
18. Vadodara Gujrat
19. Faridabad Haryana
20. Ghaziabad Uttar Pradesh
21. Rajkot Gujrat
22. Meerut Uttar Pradesh
23. Kalyan - Dombivli Maharashtra
24. Varanasi Uttar Pradesh
25. Amritsar Punjab
26. Navi Mumbai Maharashtra
27. Aurangabad Maharashtra
28. Solapur Maharashtra
29. Allahabad Uttar Pradesh
30. Jabalpur Madhya Pradesh
Jammu and
31. Srinagar
Kashmir
32. Visakhapatnam Andhra Pradesh
33. Ranchi Jharkhand
34. Howrah West Bengal
35. Chandigarh Chandigarh
Continued in next page

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36. Coimbatore Tamil Nadu

37. Mysore Karnataka
38. Jodhpur Rajasthan
All other urban areas (Municipal corporations/
Phase - 30th September,
Municipalities) except cities/ town/ areas specified for
III 2014
the corresponding Phase - I and Phase - II above.
Phase - 31st December,
Rest of India
IV 2014

National Capital Region, Sample area selected for the study, will be covered in phase-II.

A total of 64.31 lakhs Set Top Boxes (STBs) have been installed in the 4 metro
cities in the first phase of digitization during the span of about 10 months from November
2011 i.e. from the date of notification .First phase of digitization covers 4 metro cities of
Delhi, Mumbai, Kolkata and Chennai. As per 2011 Census figures, a total of 103.76
lakhs households are there in 4 metro cities. At an average rate of 80% TV penetration as
per the Census, the Ministry of Information and Broadcasting had estimated that about
82.59 lakhs households will have TV sets. After deducting 28.14 lakhs DTH connections,
it was estimated that there would be 65.34 lakhs Cable TV subscribers who would require
Set Top Boxes. As per the data provided by the MSOs, the percentage of digitization in
Delhi has gone up to 101%. In Mumbai it is 118% whereas in Kolkata it is 85% and in
Chennai it stands at 63%.

Advantages

Digital Cable TV system has a number of inherent advantages such as :

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1. Electronic Programme Guide (EPG) which gives the information for the current
programme as well as the programmes to come up.

2. It also provides features like Movies-on-Demand and Games.

3. A cable subscriber in digital system has facility to log in their complaints either
on the Toll free number or in the Subscriber Complaint Redressal System on the
web, wherein redressal of the complaint can be tracked.

4. The consumer has a choice to select channel packages as per their choice or to
select from a-la-carte list.

5. The bill is generated by the system as per the channels chosen by the Cable
subscriber.

6. In addition to these special features the digital cable TV system provides superior
picture and sound of digital quality and the consumer have a choice to select from
a wide range of channels which was limited to only about 80-90 channels in an
analogue system.

7. The consumer can also subscribe to the HD channels.

8. Subscriber can access multiple channels.

9. Digitization will check under reporting of subscriber base by cable operator that
will help boost subscription revenues.

10. Digitization will enable to offer value added services like video-on-demand, time
shift TV and many more.

11. Digitization will enable multi system operators to expand their revenue sources by
providing more choices and variety such as broadband and value added services.

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Digital Cable TV system will also enable the provision of Triple Play services on the
same Cable TV network wherein in addition to the TV programmes, internet, radio,
telephony etc., would also be available through the same cable line. The government's
efforts to digitize cable television in India are paying off with Phase I having gone
through satisfactorily. As per Ministry of Information and Broadcasting (MIB), Phase I
has seen 100% digitization in Mumbai, 97% digitization in Delhi, 85% digitization in
Kolkata and 86% digitization in Chennai as of Oct. 30, 2012.

Digitization will lead to a change in prospects for the media industry. The current
structure of the media industry, where majority of the revenues are taken away by the
Local Cable Operators (LCO), has led to suppressed profitability levels for other players
in the value chain.
With the advent of digitization, under-reporting levels will decrease substantially and
prospects will improve meaningfully for players in the value chain - broadcasters and
multi-system operators (MSO) who will now get their full share of the revenue pie. This
will lead to a quantum jump in the profitability of players, especially broadcasters.

The biggest beneficiary of digitization will be broadcasters. On one end, their

subscription revenues will increase and on the other hand carriage and placement charges
will drop.

6.5 Future Scope for the Research

Digitization can open a new gateway for DTH service providers now they can attract
cable subscribers through various sales promotion strategies according to their choices
and preferences. The television industry will also be greatly benefitted by the digitization
drive. Digitization will bring a paradigm shift in the country’s television distribution
industry. DTH (direct-to-home) players are sniffing a big opportunity to boost subscriber
base as the December 31, 2014 deadline approaches for digitization of television signals
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in the whole country. The likes of Dish TV, Tata Sky and Airtel Digital TV have stepped
up efforts to woo new subscribers into their fold, and are running campaigns detailing the
benefits associated with their brand. As estimate suggest with digitization kicking in, at
least seven million new subscribers would need a set-top-box to watch TV programmes.
The whole purpose of digitization is to widen the choice bouquet for a consumer, along
with better picture quality. Contrary to popular perception it is not costly. This
digitization will be in a phased manner. By March 2013, around 38 cities would have
switched to the digital mode. The market potential for operators offering digital content is
huge with over 100 million homes to be converted to a digital platform in 2 years - the
largest in the world at this point.

As digitization progresses and more and more cities and States become fully digital, there
will be a kind of a snowballing effect. The absence of television signals will get the
fence-sitters to go digital. Thus it can be said that second phase of digitization is expected
to bring in more gains for the DTH industry. In the second phase, a deferment is unlikely
and the industry expects more gains, considering there are 38 cities that will need to go
digital. Overall, the industry estimates that 16 million subscribers are up for grabs and
roughly 25-30 per cent of these would want to opt for DTH. Overall, the industry’s
monthly subscriber additions a month are estimated at 8 lakhs to 1 million. In this regard
it is also very important that nearly two-third of new customers are from cable dark or
rural areas. Even after the second phase (of digitisation), this will, perhaps, remain the
same. Digital cables will be a more relevant competition. The positive side is that there
will be a level playing field for DTH and cable. Also, DTH is available pan-India, and
wherever customers have had the freedom of choice, they have opted for DTH due to
sales service, convenience and other factors. Apart from above DTH offers an important
platform for films, especially small budget or niche films, to garner an audience without
spending much on marketing. Vishwaroopam is the first Indian film was also the first of
its kind to release via direct-to-home (DTH), but after protests of theatre owners this plan
was dropped. In the next one or two years more film-makers would like to release their
movies only on DTH.
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After the digitization cable network system’s subscribers can also get certain advantages
which are lacking in analog system as consumer has a choice to select channel packages
as per their choice or to select from a-la-carte list, consumer can also subscribe to the HD
channels, Subscriber can access multiple channels. So in this regard it can be said where
one hand digitization may be an opportunity for DTH Service providers to add new
subscribers other hand DTH sector can face inter sector competition with digital cable
other than intra sector competition. Apart from it has been found that the DTH industry is
capital-intensive and is facing losses because customers get subsidized boxes, as the
players absorb nearly 50 per cent of the cost while other hand cable service providers are
charging full amount of STB from their subscribers and not bearing single penny .Thus
this may be a crucial factor for DTH industry in order to grow and sustain in
entertainment market. Thus it can be said that future may be witnessed of close war
between cable network and DTH sector but ultimately subscriber will enjoy the king’s
status.In near future there may be scope for further research related to comparative
analysis of DTH service with cable network system and sales promotion strategies
adopted by cable service providers.

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