Digitisation will cut channels’ dependence on ad revenue

The TRAI recommendation of ‘sunset of analogue transmission’ (or end of analogue transmission for cable TV channels by December 2014) is bringing value to both TV viewers and service providers. While the former get superior viewing experience and more value-added services, service providers get higher average revenue per user (ARPU). According to industry estimates, the broadcast industry in India is projected to grow at a CAGR of 17 per cent over 2011-16, to ₹73,500 crore. Vivek Sharma, Regional Vice-President, India Operations and Director of India Design Center at STMicroelectronics, a semiconductor maker, shares his views on some of the recent developments in digitisation. Edited excerpts:

What is the current state of cable digitisation in India?

It’s in the nascent stage now, but picking up quickly. Cable digitisation in India is a huge opportunity. India’s large, entertainment-savvy population will transform the whole ecosystem with digitisation. A key factor driving digitisation is the Government’s mandate, which is a catalyst to digitise 80-100 million TV sets in India by end-2014. Another factor is the migration of CRT to LCD/LED and Standard Definition (SD) to High Definition (HD). Soon, consumers would want Ultra High Definition (UHD).

How do you compare digitisation in India with advanced or mature markets globally?

India is in the early stage of transition from analogue to digital. Penetration rates are still low and transition is primarily on entry-level platforms like SD and HD zappers. Still, we see signs of migration to higher performing platforms soon. Additionally, the ARPUs in India are quite low relative to more mature markets, so both content and services will get upgraded in the future. What opportunities do you see for content providers?

Once digitisation is completed, India will have a massive platform to use as a stepping stone to future technologies, for example, from SD to HD & UHD. Niche channels will garner greater visibility and consumers will see more focused and premium content. After digitalisation, content providers will have greater opportunity to attract their audiences through subscription services and there would be less dependence on advertising revenues.

How is STMicro currently placed in the set-top boxes business?

STMicro is a leading supplier of set-top box (STB) solutions. We are uniquely positioned to supply chips ranging from simple broadcast STBs to sophisticated media gateways / servers. We opened our first office here in 1987 and have developed a deep understanding of customers’ requirements here. We also work with many leading global suppliers and STB makers set-top box manufacturers supplying to local operators.

Tell us about STMicro’s India R&D centre and the work it has done on digitisation…

We have a dedicated team in our India R&D centre, where we design many of our STB chipsets. We also locally have an application support team available to work with end-customers to develop their final applications. The team in India has contributed to developing products like ST’s STB family for Indian and global markets. STBs based on these chipsets allow service providers to deliver a great user experience to their subscribers.

What quality improvements can TV viewers hope for post-digitisation?

Consumers will love new niche services like Over-the-Top (OTT) and Video-on-Demand, coupled with expanded possibilities for tailored content, besides the option of selecting their choice of channels, leading to more transparent pricing. On offer, could also be interactive services such as learning English or other languages, preparing for entrance examinations, and playing games. Transitioning TV from an entertainment to an interactive medium will broaden consumers’ experiences from pure entertainment to infotainment.

What progress are you seeing in terms of broadband delivery over cable networks?

With an estimated 200 million Internet users in India — a number that has doubled in the last three years – broadband is arguably a necessity. In developed economies, cable TV operators bundle services, such as cable, broadband and telephone, and broadband penetration is largely driven through the big cable players. In India, only a few players have ventured into this space, but the landscape is fast becoming very attractive and this sector will be very dynamic in the very near future.

Most multiple-system operators (MSOs) have plans to drive cable broadband. A large number of MSOs are investing to set up a subscriber-management system for direct billing arrangements with consumers. In addition, expect to see technology like Data Over Cable Service Interface Specification (DOCSIS), which leverages the fibre footprint and allow operators to offer broadband services to an existing cable TV system. ST provides state-of-the-art DOCSIS cable modem solutions and our network of worldwide support of middleware and third-party applications ensures that Internet content can be effortlessly streamed to TV.

COMMENT NOW