Indian broadcasting: Digital days ahead

Sudesh Prasad






Indian broadcasting is in for a major transformation in light of the global
phenomenon of convergence of telecommunication, computing and audio/video

broadcasting. This convergence has been possible due to technological

developments in the field of digital signal processing, compression techniques,

switching, etc. We are passing through a phase of transition from the

predominant analogue to digital transmission both in audio and video space. The

way information, communication and entertainment services will be delivered

through the audio-visual media in India in the coming years is going to make a

departure from the present, which is predominantly one way, to the point of

interactivity.

There has been an explosion in the number of channels, which hovers at over

sixty now. This is likely to go up, as more and more players enter into the

field. More specialized channels are coming up, catering to specific segments.

The concept of pay-TV has started taking root, meaning more revenue for

broadcasters. We are already witnessing the use of telecom networks for video

transmission and the availability of the Internet on the television, though on a

very limited scale. But that is a good augury.

The one decision that has created tremendous enthusiasm is the decision of

the government to allow DTH services in Ku-Band. The Communication Convergence

Bill, which is waiting to be introduced in the parliament, holds a lot of

promise for the broadcast industry. The report has been put up on the DoT site (www.dotindia.com)

and the Ministry of Information and Technology’s site (www.mit.gov.in) to

elicit response from the concerned people. The stakes are high, as there are a

large number of viewers, with sixty million TVs and thirty million cable homes.

The recent International Broadcast Engineering Society Exhibition and Conference

held in Delhi, was a clear indication of the tremendous interest that the Indian

broadcasting market has generated for the equipment manufactures, broadcasters

and others.

Continued

Going digital is the key

The number of television channels has increased to about sixty something. A

large number of FM radio stations are going to start services soon. Most of the

channels have started realizing the importance of going digital. Digital Video

Broadcasting (DVB) and Digital Audio Broadcasting (DAB) are going to chart the

future of Indian broadcasting in the years to come. The benefits of going

digital are many. It means a lower transponder rental for the broadcasters, with

high quality picture and sound. The spectrum is utilized efficiently, besides

giving low transmission cost per program. More channels can be delivered using

the same infrastructure. More value-added services can be delivered, besides

more programming choices on a digital network. With the standardization of

MPEG-2 for compressed video/audio and European DVB, the stage is set for this

transition.

 

Opportunity for equipment manufacturers

The market is huge–given the massive investment plans of all major

broadcasters, including DD and AIR, to expand their network by going digital and

starting various value-added services. DD and AIR, in order to compete with the

new channels, have been forced to upgrade and modernize their equipment, thus

opening up new opportunities for suppliers. The budget is definitely a

constraint when it comes to public broadcasters. It will be the studio,

production and post-production equipment demand from private television

companies and studios that will help fuel growth. The need for more programs,

due to a 24-hour broadcast by most of the private operators, will be the main

driver for the explosive growth in demand. There has been a tremendous growth in

the number of production companies and studios, especially in Delhi and Mumbai,

which are about three hundred. Significantly, most of these companies are

installing state-of-the-art equipment.

Due to proliferation of news channels, the demand for newsroom automation

equipment has also grown sharply. According to an estimate, the total market

demand for television/radio studio, production and post-production equipment is

currently estimated at around $300 million. According to Ranjit Nigam, national

sales manager, Barconet, "As most of the channels are going digital, the

demand for equipment will be huge." Sue Gilks, business partner and

development manager with Tandberg Television, says "Over the last three to

four years we have seen the market grow rapidly in India, mainly because of some

of the government policies." European, Japanese and US companies, for e.g.

Barconet, Sony, JVC, Panasonic, Tandberg, Tektronix, Scientific Atlanta and

others, are the major suppliers of broadcast equipment in India. Most of these

companies have their presence in India through some business partners or

distributors. Some of them, though, operate through their full-fledged offices.

The introduction of DTH services will also automatically result in a market for

Ku-bandwidth dish antennae and integrated receive decoders.

Manufacturing of high-end broadcast equipment in India is negligible. There

are few companies who are manufacturing themselves or through joint ventures by

some foreign companies. Bharat Electronics Limited is a major player in the

radio/TV transmission equipment market in India, followed by C-DAC and Gujarat

Communication and Electronics Limited. The ministry of information technology

has clubbed broadcast equipment under communication and broadcast. Within the

broadcasting sector it broadly includes digital broadcasting of audio &

video, broadband access, digital compression, digital storage and retrieval,

hard disc-based and optical technologies. The production of communication and

broadcasting equipment during 1999-2000 was estimated to be of the order of Rs

4,800 crores, as compared to production of Rs 4,400 crores in 1998-99.

Manufacturing in the CATV equipment segment is mostly dominated by indigenous

manufacturers, which is a highly disorganized segment. Equipment mainly includes

headends, amplifiers, splitters, etc. The gray market also caters substantially

to the CATV equipment. This segment is very cost sensitive and the CATV

operators are not ready to shell out more for better quality equipment from

reputed manufactures. Nigam of Barconet feels, "Most of the cable operators

are highly cost conscious and their level of understanding about the benefits of

new technology is very low, which make them buy inferior products. There is a

need to educate them on the quality front." He adds, "Most companies

are still doing hand soldering. Testing facilities are not up to the mark and,

above all, the procurement of components is a major problem." Incidentally,

Barconet is scouting for a strategic partner to manufacture in India. Scientific

Atlanta, Barconet and Motorola GI are major suppliers of CATV equipment.

The cable industry faces an imminent threat from the launch of DTH services,

though the operator’s association denies any immediate impact on their

business. With the broadband network coming up with the creation of bandwidth

capacity, there is also talk of television channels being streamed on the

Internet. This is an opportunity, which will of course take a lot of time before

it becomes a reality. Already, streaming portals like Numtv.com and

Sharkstream.com are in place. Transponder space is also an area where satellite

companies have an opportunity in the light of increasing number of channels. The

government has allotted frequency to twenty five top bidders for FM stations.

Zee and Bennett Coleman & Company bagged the maximum number of licenses for

a premium price. This is a good opportunity for digital audio equipment

manufacturers.

Continued

Regulation on the right track?

Most of the equipment manufactures are more than satisfied with the fast pace

of reforms on the broadcast front and are hopeful of the upcoming Communication

Convergence Bill in the parliament. The permission to allow uplinking from India

and the decision to permit DTH services in Ku-Band has sent the right signals to

the industry. Despite this, very few channels like Sun and Eenadu have actually

set up an earth station to uplink their channels. Restriction on foreign company’s

equity participation is an important reason for this. These broadcasters are

currently uplinking three to four channels, which is cost-prohibitive. In

Singapore, one uplinking center is capable of playing 16-16 channels. However,

Mahesh Prasad, president of Sahara TV, says, "The policy is tilted against

domestic broadcasters and there should be a level playing field." Kiran

Karnik, CEO of Discovery, sees no reason why the government is not allowing

private players in the terrestrial transmission space. Ranjit Nigam says,

"The biggest change has been in terms of customs duty which has come down

from 350 percent in 1984 to 67 percent now. RBI clearance has also become

easier. There are not too many items on the special import group. Policy on the

whole is a liberalized one".

Value-added services

With the creation of substantial optic fiber backbone, especially in the

metros, opportunity exists for the cable operators to utilize this to offer

value-added services like Internet on TV, to customers. Already, companies like

Spectranet and Mantra in Delhi, and In2Cable and Hathaway in Mumbai, have

started offering these services. But surprisingly, despite all the benefits, the

response has been very poor and the number of subscribers is very low. This can

be attributed to the clear-cut failure of marketing strategies adopted by these

companies. They have not been able to make subscribers aware of the advantages

that these services offer them. At this pace, the concept of interactive

television is going to take a lot of time. Reluctance on the part of

cost-sensitive subscribers to pay more for quality services has only compounded

the problem. Added to this is the high cost of access products like set-top

boxes. According to Ashish Jain, business development manager, MCBS, a leading

Indian broadcast equipment manufacturer, "There is a big market for

Internet over Cable in India, it is only that operators have not been able to

device a proper revenue model and do the marketing accordingly." It will be

a lot of time before interactive television becomes a reality in India. The

chances of MSOs becoming local exchange carriers for basic operators is also an

area which holds lot of promise, if regulatory hurdles are cleared. Once

interactivity becomes a reality, operators will be in a position to provide

several other services like pay-per-view, home shopping, multiple viewing

angles, near video on demand and games. This will lead to the next stage where

video on demand, home banking, teleworking and even telephony and video

conferencing could be provided.

Future perfect

Intensifying of competition on the broadcasting front has resulted in new,

emerging opportunities for everybody–the broadcaster, equipment manufacturers,

production houses and above all, the subscriber. This has also resulted in bad

blood between broadcasters and cable operators, which is an ominous sign. The

battle is on for the ground. The ongoing tussle between Star and SitiCable is an

expression of that. Siti is said to be blocking Star’s channels on their

network. The ultimate sufferers are the subscribers, who are deprived of their

favorite programs because of limited options. Hathway, in which Star has a

stake, does not want to air TV Today’s Aaj Tak channel as Star News competes

with it. Cable operators are also peeved at arbitrary pay channel costs. It is

these irritants which need to be overcome. One only hopes that the independent

regulator, which the new Communication Convergence Bill envisages, will take

care of this issue.