Revenue disparity between DTH operators and OTT Platforms is likely to Increase

India’s direct-to-home (DTH) industry is facing a rejection in its income due to a shift in consumer preferences for more comfortable digital content options.

This comes after the combined income of four major DTH operators fell from Rs 12,284 crore in FY22 to Rs 11,072 crore in FY23, according to Chandrasekhar Mantha, Partner, media and entertainment leader, Deloitte India.

Tata Play, Airtel Digital TV, and Sun Direct did not respond to email queries sent by Business Standard. 

Based on current trends, Pushan Sharma, director-research, CRISIL market intelligence and analytics, expects the revenue gap between DTH operators and over-the-top (OTT) platforms to further increase over the next two to three years.

“Before, people primarily watched TV through traditional DTH services, but the shift to hybrid models (mixing TV and streaming services like OTT) started before Covid and accelerated after the pandemic,” Manoj Dobhal, chief executive officer (CEO) and executive director (ED), Dish TV, told Business Standard.

He added, “People now prefer to watch content wherever it is within their budget. TV ownership has increased but the number of hours spent watching traditional TV has decreased. This is putting pressure on DTH revenues and subscribers.”

Dobhal further said it is not the subscribers who have gone away from the platform.

While subscribers continue to engage with the platform, both the number of viewing days and hours have declined. 

Industry experts link the decrease in revenue for DTH operators to a shrinking subscriber base. 

In March 2021, there were nearly 70 million subscribers, but this number fell to 62 million by June 2024, based on data from the Telecom Regulatory Authority of India's (Trai’s) performance indicators reports.

The OTT market is anticipated to maintain its growth, with an annual increase of 10-12 percent over the next two to three years. This growth is fueled by a rising number of subscribers looking for a variety of high-quality content. 

In contrast, DTH revenue is expected to see only modest growth of 1-3 percent, hindered by slow subscriber additions and the ongoing shift of consumers towards other digital services, Sharma noted.

In a previous report, CRISIL pointed out that Indian media companies have been slow to respond to the increasing digital influence. 

According to Trai data, the number of active subscribers for DTH operators increased to 62.17 million in the April-June quarter, up from 61.97 million in the January-March quarter. 

This growth has also been noted in the April-June quarter over the past three years.

“Over 4 million subscribers have migrated from traditional DTH services to alternatives like DD Free Dish or OTT platforms,” said Mantha.

Both Mantha and Sharma said that the pricing strategy of OTT platforms is the major factor influencing consumers to switch away from DTH operators.

“Traditional DTH services mainly distribute content from broadcasters, with basic plans costing Rs 300-500. In contrast, bundled offerings by new-age fibre providers, which include high-speed internet, along with access to multiple OTT platforms, are priced at Rs 800-1,000. With a marginal increase in price, consumers gain more value with bundled options, making them a more attractive choice,” Sharma said.