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Direct to home - Analysis of Indian Market

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An assignment of Mgmt. students on the market analysis of Direct To Home Service in India, over past five years.

An assignment of Mgmt. students on the market analysis of Direct To Home Service in India, over past five years.

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Direct to home - Analysis of Indian Market Direct to home - Analysis of Indian Market Presentation Transcript

  • Submitted by, Pratik Singh (Roll no. 77) Rahul Swarnkar (Roll no. 79) Manoj Nolkha (Roll no. 99) Vibhu Ganesan (Roll no. 114) Vinay kumar (Roll no. 116) Yogesh Sawarkar (Roll no. 119) Subhrajyoti Parida (Roll no. 124) Managerial Economics Presentation on Sector Analysis of DIRECT TO HOME Under Guidance of: Prof. Dr. Utpal Chattopadhyay
  • Agenda
    • History of Indian Broadcasting
    • About DTH & Industry Overview
    • No. of players
    • Market Share
    • Concentration ratio
    • Players Vs Industry (Subscriber base)
    • Power of firm over price
    • Barriers to entry
    • Non-priced competition
    • Employment level
    • Porter’s 5 Competitive Force
    • Some facts on DTH Industry.
  • History of Indian Broadcasting
    • In 1959, Launch of Doordarshan, Indian national television
    • In 1991, Influx of Foreign channels and domestic channels
    • In 1992, Cable TV industry started
    • In 1995, Govt. passed the cable TV networks(Regulation) act
    • In 2003, first private DTH license was awarded to Dish TV
    • In 2010, no. of players in DTH industry increases to SEVEN.
      • DTH stands for Direct-To-Home television.
      • A wireless digital audio / video service is delivered through satellite.
      • Idea was 1st proposed in 1996,
      • Govt imposed a ban 1997
      • Passed approval in 2000 but the signals can be transmitted through Indian satellites only
    ABOUT DTH
    • India has a total television watching population close to 133 million
    • Out of which 68 % (about 90 million ) has access to cable or satellite
    • Market share of DTH is 11%
    • Higher growth potential in
    • DTH market .
    DTH Industry Overview
  • No. of Players
  • Market Share (No. of Subscribers) Lesser Competition Increased Competition (Monopoly - Oligopoly) (Oligopoly)
    • Competition level among the players increasing from 2005 to 2010.
    • Each player is trying overtake the other in terms of
      • Market share
      • Price
      • Service quality
      • Content quantity & Quality
      • Technology
    • Market was Monopoly type in 2005, transited to Oligopoly in 2010 , and is fast evolving towards competitive by 2013-14.
    • Increased competition on Non-priced parameters like installation, customer care , and VAS
    • Ultimate BENEFIT to CUSTOMERS , increased options to pick from.
    Effects of increase in players in DTH market
  • CONCENTRATION RATIO:
    • Concentration Ratio(2010):
      • Top 2: 58%
      • Top 4: 83%
      • Top 5: 93%
    • Concentration Ratio(2007):
      • Top 2: 96%
    • Concentration Ratio is the sum of percentage of market share(s) held by top largest firms in an industry
    • Low concentration: 0% to 50%
    • This category ranges between perfect competition to oligopoly
    • Medium concentration: 50% to 80%
    • An industry in this range is likely an oligopoly
    • High concentration: 80% to 100%
    • This category ranges between oligopoly to monopoly
  • Dish TV Vs. Industry Tata Sky Vs. Industry
  • Sun Direct TV Vs. Industry Reliance BIG TV Vs. Industry
    • Airtel Digital TV Vs. Industry
    Videocon Vs. Industry
  • Average Revenue Per User (2009-10)
  • Power of firm over price
    • Power over price reducing from past five years ;
    • Players are NOT perfectly “Price Takers”.
    • DTH Service is becoming more Elastic
    • DTH Service demand responding quite sensitively w.r.t
    • price change
    • Presence of multiple numbers of players
    • Profit margins DECREASING.
  • Barriers to entry Infrastructure & Investment Govt. regulation and licensing
    • It is has been a capital intensive sector .
    • Requires large amount of investments to build up high cost equipments, transponders and maintaining infrastructure over a larger area.
    • Entry into market regulated by the GOI’s body called as TRAI
    • 40% of the cost of providing DTH services are incurred due to high taxations
    • License Fee is high.
  • Non-prices competitions
    • 1. Value added service:
    • Matrimonial services, job search, travel planning, TV banking, astrology etc
    • Movie on Demand
    • Offering free subscription for first few month
    • BIG TV collaborated with UTV and Star India to acquire the rights of Hindi film
    • Mobile Active
    • Gaming
      • Sports Active , Multilingual Services , News Active
    • Tata sky is ensures installation within 24 hours, whereas Big TV takes 48 hours.
    • Sun TV offers a free dish and convenient packages for installation and activation charges
    • Tata Sky affordable pricing and attractive packaging, offering customer premises equipments free
    • Tata Sky claims to respond to customer complaint within 6 hours or in some cases much earlier
    2. Installation and customer care:
    • Aggressive advertisement approach: IPL, Reality shows, news paper ads etc.
    • Big Brand Ambassadors like Shah rukh Khan, Aamir khan, Saif Ali Khan, Karina Kapoor, Abhishek Bachchan, Hritik Roshan etc.
    • Increase in sponsorships in Big events
    • Lucrative offers during Festive seasons
    3. Advertisements Campaigns:
    • In 2007 market more of monopoly type.
    • In 2010 market perfectly oligopoly.
    • In 2015 market MAY become highly competitive.**
  • Inter firm rivalry VERY HIGH Price Wars Non-price Wars Bargaining power of Buyer HIGH Range of options Price Sensitive Buyers Threats of Substitutes VERY HIGH Cable TV - High IPTV - Medium Terrestrial - Low Bargaining power of Suppliers VERY HIGH Transponder - Very High Content - Very High CPE - Low Threats of new Entrance HIGH DTH market is having only 7 operators Porter’s Five Competitive Force
  • TYPE OF MARKET
    • Differentiated products
      • Airtel focuses on digital clarity
      • Big TV focuses on VAS
      • Sun Direct focuses on cost effectiveness
      • Videocon focuses on technology
      • TATA Sky’s customer service
    • Difficult entry and exit
    • Oligopolistic Market is observed
  • ECONOMY OF SCALE:
    • Large number of potential
    • users/customers
    • Advancement in technology
    • Better management
    • Relative productivity
  • Some Facts Regarding DTH Services Sector
    • Entered when market was full with big names
    • Videocon invested approximately 5 times lesser than other players
    • Technological Innovation was its barrier breaker
    • Introduced “ televisions with in-built set top box ”
    • Was voted “ Product of the year 2010 ” in a survey conducted by Neilsen group
    #1: Videocon’s Double Treat:
    • Opens a new market segment
    • Target customers are different from targets in normal DTH services
    • Other consumer appliance manufacturer’s may also venture into this segment
    • Thus it has resulted in relaxation of the entry barriers and increase in competition
    Effects of Videocon’s move
  • #2: DTH Sector during economic slowdown
    • The DTH sector thrived well during recession
    • In Oct – Dec 2008, when the slowdown was being felt, DTH sector made a tremendous leap from 6lakh p.m. to 10Lakhs p.m.
    • DTH players used “Bundling” as pricing practice.
  • Causes:
    • Lowering of prices due to new entrants(Increase in affordablity)
    • Increase in awareness about DTH services due to increase in number of players
    • Value added services like ‘movie on demand’, matrimonial match-making, tuitions are offered
  • #3: The IPTV & HITS threat
    • Internet Protocol television ( IPTV ) is a system through which Internet television services are delivered using the architecture and networking methods of the Internet Protocol Suite
    • Due to high bandwidth requirement, hundreds of channels cannot be broadcasted simultaneously
    • Every channel change request by the user goes to the content server resulting in a delay for changing a channel
    • The pricing of IPTV would be around Rs. 75 to 99 pm
  • HITS
    • Headend In The Sky (HITS), is a digital distribution platform. HITS serves the whole country by providing its signals through satellite to many Multi System Operator (MSO)/cable operators who can further send the signals to the customers using their network
    • HITS would not only help increase the penetration of cable market further into rural areas where it has been absent but will also help in further reduction of prices of set top boxes and will also lead to further consolidation of the cable market
    • HITS is both cost friendly & high quality
  • www.indiadth.in www.indiastat.com www.tatasky.com www.sundirect.in www.dishtv.in www.bigtv.co.in www.airtel.in REFERENCE
  • THANK YOU