Last week, 45 million cable TV subscribers in India had the shock of their lives when they switched on their TVs. They’d lost access to many channels. And it wasn’t their fault. They’d paid the bills. But their Cable TV operator hadn’t. These operators were busy protesting against a price hike by broadcasters such as Sony and Zee.

And that got us thinking — what’s the state of TV viewership in India these days?

So in today’s Finshots, we tell you how cable TV and Direct-To-Home (DTH) services are facing an existential crisis.

The Story

If you want to watch Star Sports on TV, you could do it in 2 ways.

  1. You take a cable connection from a local provider. It involves a bunch of wires crisscrossing around the neighbourhood. You share this network with others. And it’s not the clearest picture quality. But it’s often a cheaper way to get the channels you want.
  2. Opt for a Direct To Home (DTH) connection from a reputed company. They’ll set up a small satellite dish on your roof. It’ll fetch a high-quality signal from the broadcaster and beam it straight into your TV. But if it rains heavily, you often lose signal.

Both Cable and DTH have co-existed for a decade or so now. But times are getting hard.

For starters, look at Cable TV. People are dumping cable in droves. If you look at the share of people who pay for channels on TV, cable’s share dropped from 63% in 2015 to 43% in 2020. And some estimates say that it’s now languishing at a measly 30%.

You’d think all of them are going the DTH route, right? After all, it’s supposed to be of a higher quality. Although it’s not capitulating like Cable TV, the subscriber count is dipping slowly for DTH too. It was nearly 69 million in September 2021. And just a year later, it fell to 65.5 million.

What’s going on, you ask?

Well, it’s a two-pronged attack.

At the top, there’s OTT. People with money in their pockets want shows, movies, and content on demand. They don’t want to be at the whims and fancies of a broadcaster’s showtime. And they don’t want ads. They’re willing to pay for quality content. In a short span of time, there are nearly 120 million paying OTT users in India.

Now Cable TV and DTH players are aware of this threat. And they’re trying not to go extinct like the dinosaurs. So they’re partnering with OTT players. They’re offering bundles to their subscribers. Telling them, “Hey, subscribe to us and we’ll throw in Netflix and Sony Liv too. At just a little extra cost.”

How do they do that?

So DTH players promise a certain number of subscribers to the OTT companies and secure a massive discount of even 60%. They then pass along a portion of this discount to customers. Everyone wins. Everyone’s happy.

But there’s a problem. They’ve got competition from telecom companies who are resorting to bundling too. And well, everyone needs the internet. So when people subscribe for internet services, they could pay a bit and get OTT services along with it too. If this trend picks up, it could get quite ugly for cable and DTH.

Now you could say, “But all this is at the top of the pyramid, Finshots! The core of India will still prefer DTH and Cable TV. ”

But what if there’s an 800-pound gorilla at the bottom of the pyramid? One that has been hiding in plain sight. One that’s waiting to kill the incumbents forever.

We’re talking about FreeDish.

If you haven’t heard of it, we don’t blame you. It’s a DTH service run by Prasar Bharti — the folks behind Doordarshan — since 2004. That makes it a government entity. During the initial years, growth was slow. It just had 33 channels. You know, the typical DD Kannada, DD Bangla, and DD Sports kind. It was free but it wasn’t what you’d call fabulous entertainment. Cable TV was a better proposition. You’d get a wide variety of channels without having to shell out exorbitant sums of money.

But of late, something has flipped. This government entity is giving private players a run for their money now.

It’s probably because DD didn’t sit by idly. It kept improving what it had to offer. It kept adding more and more channels. People just had to spend a couple of thousand rupees on the set-top box. And they would get hundreds of channels for free.

And when the pandemic struck, it turned out to be a boon. There was financial stress and people stopped renewing their subscriptions to cable and DTH. But they needed some entertainment still to take their mind off of things. They might have already had a set-top box at home. And they wanted something they could get for free.

They turned to FreeDish!

You see, Prasar Bharti had managed to get 160 channels together. Not just DD-type of channels, mind you. Even private channels from Star, Sony, and Zee jumped on the bandwagon and began to offer their channels on FreeDish. It helped the company widen its reach and it captured over 43 million subscribers. It is now on the verge of overtaking Cable. It’s hot on the heels of DTH.

And there’s a simple way to explain the power of FreeDish.

A few months ago, a bunch of these Hindi entertainment channels decided to sever ties with FreeDish. Why, you ask?

Okay, let’s take a hypothetical example of Sony Pal. Imagine that it was available for free on FreeDish. But, if you had a DTH service like Tata Play, you’d have to shell out money for access. What would happen, you imagine?

People would dump DTH services and flock to FreeDish, right?

When private channels tied up with FreeDish, that’s exactly what DTH services feared. They feared for their survival. And they begged broadcasters not to be this cruel. They wanted broadcasters to avoid dealing with FreeDish.

So, the Indian Broadcasting and Digital Foundation (IBDF) stepped in. They’re an association of these broadcasting companies. They put their foot down and said that the broadcasters would have to choose. Between airing channels for free on FreeDish or charging on Tata Play.

And since broadcasters had a chummy relationship of many years with DTH companies, they didn’t want to rub anyone the wrong way. So they bowed out of the deal with FreeDish.

Private DTH providers celebrated. They would survive…

Or would they?

Because this isn’t the end of the story. See, broadcasters have a sinking feeling that they made the wrong decision. They’re saying that they’ve lost nearly ₹250 crores in ad revenue per channel by taking their content off of FreeDish. Simply because of the extra reach they were able to command by using the DD distribution channel, advertisers were willing to pay the extra bucks. And the subscription revenue they earn from private DTH hasn’t been able to match this loss.

So if these channels choose to come back to FreeDish, it could deal a big blow to every other DTH provider.

And Prasar Bharti’s going all guns blazing to corner the market too. It wants to have at least 250 channels on board soon. It’s asked for ₹2,500 crores to upgrade its infrastructure. Just to make sure everything runs smoothly. And it even wants to distribute FreeDish set-top boxes for free to communities across the country. It knows the future of television could soon be in its hands. It could be a virtual monopoly.

So yeah, there’s OTT at the top of the pyramid. And there’s DD FreeDish at the bottom. In the middle, Cable TV and private DTH services are getting squeezed. It’ll be interesting to watch how this plays out.

Until then…

Don't forget to share this article on WhatsApp, LinkedIn and Twitter

Ditto Insights: Stop paying your medical bills out of pocket!

2/3rd of all medical bills in India are paid out of pocket. A bulk of it goes to fulfilling expenses related to your hospitalizations.

And it’s wiping out your savings

  1. You can’t expect to grow your investment if you can’t protect your savings. Even if you start with ₹1 Lakh and compound it by 10% every year, a trip to the hospital can wipe out your gains and your principal in a few short days.
  2. Medical inflation is growing at over 10% in India: While healthcare procedures have generally become more accessible, a stay at the hospital can set you back quite a bit, simply because the rooms are now expensive. A stay in a single private room in a private healthcare facility in Bengaluru can cost you over ₹10,000 a day. It’s insane.
  3. No tax benefits: When you’re paying for medical procedures out of pocket, you don’t get to have tax benefits. However, if you have insurance, you can protect your savings, avail tax benefits and beat medical inflation all at the same time. So here’s what you should do. Get yourself a comprehensive medical insurance plan right now before you start your investment journey.

And if you need any help on that front, you can talk to our advisors at Ditto. We only have a limited number of slots everyday, so make sure you book your appointment at the earliest:

  1. Head to our website — Link here
  2. Click on “Book a FREE call”
  3. Select “Health Insurance”
  4. Choose the date & time as per your convenience and RELAX!

Our advisors will take it from there!