Star India CEO Blasts Local DTH Operators
With a population of more than 1 billion people and a growing middle class, India is a TV market ripe for growth. A number of DTH platforms have been launched in recent years, and one of the biggest is News Corp. subsidiary Star India. CEO Uday Shankar discusses the broadcast environment, satellite capacity and why he believes some operators are hurting the market.
VIA SATELLITE: What are the major challenges for a broadcaster to stay relevant in India?
Shankar: The biggest challenge that all broadcasters face today is to create content for a rapidly segmenting market. We need to take innovative content and offer a fresh experience at an affordable cost.
Uday Shankar, CEO of STAR India
Listen to more questions from Mark Holmes’ interview with Uday Shankar.
VIA SATELLITE: How do you view the satellite pay-TV environment?
Shankar: There has been enormous growth in subscription numbers, but ARPUs remain low. The businesses in this area are looking pretty challenged, but it sometimes happens in a competitive market that people begin to take short-term measures to get a share of the market and not so much value. … India will always be a very value-conscious market. You can never compare the ARPUs you will get in India with that of Europe and North America. It will always be much lower, however, I don’t think platforms have done anything very strategic. This is partly due to regulation where no differentiation of content is allowed. All content must be provided to all platforms on a non-discriminatory basis. I think this goes against the grain of logic of offering choice and building brands. Only Bharti and Tata Sky have focused on raising ARPUs. A lot of telecom operators have entered DTH broadcasting, and they often mistake this business for a business like telecom, where you just have to put boxes in peoples’ homes. That is a big mistake. You need to push more and better content to boost ARPUs, and I don’t think platforms have paid enough attention to that.
VIA SATELLITE: Are these platforms damaging the market?
Shankar: Some of the DTH platforms have been completely reckless in their approach. They are actually being very short-sighted and are destroying value by keeping ARPUs low or by doing totally reckless subsidization of the set-top boxes.
VIA SATELLITE: When will HD hit DTH platforms?
Shankar: There are already a few niche channels available. I think this year, because of competitive pressure, as well as the fact that India is going to host the Commonwealth Games, there is a lot of excitement. Platforms are getting ready to shoot these in HD. I think very soon you will see several HD channels being offered on DTH. The big limitation is satellite capacity.
VIA SATELLITE: Will HD drive demand for capacity?
Shankar: I think India will need more satellite capacity, but HD growth in India is constrained by the limitations of cable. Cable tends almost to be entirely analog here. It is just not geared to carrying HD content. Even in the DTH business, which has grown tremendously, most of the businesses are still struggling. Unless there is enthusiasm from cable and satellite platforms to push HD, it is going to be a challenge.
VIA SATELLITE: What is the next phase of your growth strategy?
Shankar: We want to deepen our presence in regional markets across India. There are some very exciting markets. Secondly, we want to unlock value by shaping both the technology and business of subscription. That will be a key growth factor. Thirdly, we will be working with fellow broadcasters to fix the issue of profitability.
VIA SATELLITE: What major initiatives is Star TV working on in terms of content delivery?
Shankar: We are looking at broadband as a very interesting area. Even though it is very small at the moment, we think there will be an inflection point really soon, and it will grow quickly. We are also looking at mobile. A lot of Indians are having their first screen experience through mobile. It is going to be a very important source of experiencing and consuming content.