The India and Bharat divide is fast fading as aspiration levels of rural populace are going up and they are also accessing products, which were not accessible to them few years ago. The television has deeply penetrated into rural and the current census data confirms that television sets are bought by large number of rural populace. The increasing usage of TV has given an opportunity to the Direct to Home service providers to tap this huge opportunity.
Even the market research agencies and census data complements the rising phenomenon. Beating the contrary perception that DTH is an urban or metro phenomenon, 70 per cent of its DTH subscribers reside in rural areas and towns with a population under one million. Metro cities like Delhi, Mumbai or Kolkata contribute only 2-3 per cent to the overall DTH subscriber base of 13.2 million, says the findings of a report by Chennai based Francis Kanoi, a leading marketing research firm.
In the hinterland, the two most preferred brands service providers are Dish TV and DD Direct Plus. According to the report, the southern market is dominated by Sun Direct DTH services, while in high-income households. Dish TV is the leading brand in rural and has 30-35 per cent share in the 13.9 million subscribers in India. According to the spokesperson of Dish TV, “rural is a land of opportunity for us, as we see that consumer profile is changing and they are no longer unaware of trends. In fact a closer look in these areas will tell you that they are smarter than us in many areas.”
The recent figures released by the Census also confirms that people are preferring TV sets and radio as mode of entertainment is on the decline. The data shows that the proportion of households which own a radio has fallen, almost at the same rate at which the proportion of households with a TV has risen. Yet, there remains a stark difference between TV penetration in rural and urban India: Just one third of rural households own a TV set, while over 75 per cent of urban households own one. TV penetration is highest in Delhi (88 per cent), followed by Tamil Nadu (87 Per cent), Punjab, Chandigarh and Puducherry. Bihar has by far the lowest TV penetration of any state at just 15 per cent.
The report of Francis Kanoi states that over seven million DTH subscribers, or more than half the total of 13.2 million, come from rural markets alone, where Dish TV and DD Direct Plus are the clear leaders. Towns with a population under one million (semi-urban towns) contribute another two million DTH subscribers, the report states. The spokesperson confirms that the report only breaks the myth that rural masses are ignorant. Dish TV was the first private player to enter in the space and so far has kept the lead.
However, no DTH operator in the space provides region or state-wise break up of their subscriber base either to individual or to the government. So, there is no clear data available in this regard, however, companies are bullish on this huge market and are making many efforts to sell their products.
This is also significant because DTH is a fast growing market, estimated to touch Rs 3,000 crore in the current financial year based on sales turnover, with the bulk still expected to come from rural India and semi-urban towns. In 2008-09, the size of the DTH market was around Rs 1,500 Crore.
As per the Census data, more than 34 per cent of the rural population now has access to TV sets, which was only 18.9 per cent in 2001. As a result, despite the large number of TV sets owned by rural households, the percentage of rural households owning these sets is only 34 per cent, compared with 76.7 per cent for urban households. There have been a number of figures about these items put out in the recent past by different reports. A careful review of the findings of such studies is sure to excite a great deal of interest. The states of Maharashtra, Goa, Punjab, Uttar Pradesh, and Rajasthan are the leaders in DTH subscription, contributing over 6.4 million DTH connections or 48 per cent to the overall DTH subscriber base, the report says
According to Viney Tandon, an independent entrepreneur and former Aitel D2H head of MDU sales says, “there is a huge potential for DTH operators in rural, however, it is very important segment for the customers.” The diversity of Indian villages have different requirements and Viney feels that only customised approach will work in the business. “Rural India is different and typical market and without offering custmoised products, things will not work in this part of the country,” he added further.
The Dish TV spokesperson feels that defining boundaries is very crucial as different regions of India have different needs. “We learnt it with experience that what works in Maharashtra may not work in Uttrakhand and we cannot offer one product to all. In rural, they want more regional content, therefore we customised our packages according to the needs and demands of these people,” she added further. All the leading DTH players are offering two different packages for the subscribers, which are South India package and Rest of India package. Apart from this, customers can also pick and pay. However, pick and pay scheme a bit expensive than others and experts feel that it may not work in many regions of India.
Rural markets are important but competitive when it comes to offering the content, as it’s largely language-driven, with sharp preferences on what they want to watch. In terms of geographical location, North India and Western India together contribute over 8.4 million DTH subscribers, while the southern market contributes 3.2 million. There are 126 million cable homes in the country, of which 50 per cent are based in rural India.
THE DISTRIBUTION CHALLENGE
As income levels are rising and rural masses have money in their hands, they are willing to access things which were not accessible to them earlier. In many areas, people have televisions sets but for buying a DTH, they have to travel as far as 30 kilometers. For Instance, Satpal Negi of Badyar village bought a DTH connection from Almora district of Uttrakhand. But now he’s facing a lot of problems in getting it recharged as there’s no nearby shop or town from where he can buy its monthly recharge. “I live in Delhi and go to my village only twice in a year. My wife can’t travel 30 kms to get a recharge and thus we have not not been able to recharg our DTH for past many months” added Negi.
Marketers say that distribution has always remained a major challenge for them and companies are finding different routes to expand their reach in the villages. Viney says that going below 5000 population is still a risk for DTH operators and nobody is willing to take that risk. “I don’t think they have gone up to that extent. They are still not going below 20,000 population mark,” he elaborates.
Despite the huge scope in the area, fragmented consumer base is really a challenge and companies don’t look at it as a viable business option. They feel that all the consumer demands can’t be addressed. But Viney feels that without lowering tarrifs, the business is not going to click here in the long run. Dish TV spokesperson agrees that product customisation is necessary to attract the consumers. She says, “We agree that this is the basic need to customise our offerings for the rural and we’ve done that previously. We have very recently launched a lifetime package for four metro cities and it will be available to our consumers in hinterlands as well, but a little later.”
Interestingly, Dish TV has launched lifetime scheme, in which any existing customer has to recharge just twice and he can avail 70 channels for free of cost. Companies like Dish TV have tied up with different service providers to maximise their reach in the rural markets. Apart from this, they are tying up with village panchayats to engage unemployed rural youth to become their brand ambassadors. The strategy works well as in any small village, people know each other very well and word-of-mouth is always a preferred mode of communication in these areas.
Dish TV, according to the spokesperson, faced a lot of problems while finalising dealership, as market size is very big but fragmented. For instance, in Himachal Pradesh, the company has deployed just one person to cater to few regions of the state. The other strategy, which companies are using, is to engage the local influencer like technicians, shop owners etc to work as their resource person and function as one stop solution. The benefit that these persons get is in the form of recharges.
Experts sum up that the growth in DTH services is expected to exhibit double-digit levels by 2015. This trend shows that it will enhance consumer awareness and new entrants to the market, as well as continued economic growth. However, the main market is expected to be India and indeed, NSR expects India to account for over 80 percent of the subscriber base of the four emerging markets by 2015. Factors like large population, TV ownership and rising GDP levels, India has a unique feature that renders it a status of pay-TV viewing as a compelling proposition: Bollywood. It has also been widely reported that more than 100 new TV channels are scheduled for launch in India over the next 12 months.
The Dish TV spokesperson and Viney both said that in future, the industry will be more subscription driven so numbers will matter in the end. Multiple taxation is also pushing up a lot of burden on these operators and many are not really willing to extend their operations as they feel it will not be viable to expand their business in less than 5000 populated villages. The future will be content driven and those operators, who will offer regional content with lower tarrifs will take a lead, says Viney. The future seems promising, however, those who will utilise the right distribution strategy and engage the rural consumer through attractive packages, will become successful.