As we all know that analog cable networks can handle only up to 70 channels and that is why cable operators are often stick to Hindi general entertainment and regional language channels which are more popular in India. Due to this technological limitation, most of the English content lover resort to downloading English contents from torrent sites (facilitates free downloading of copyrighted materials). Channels like AXN, HBO, Star World etc. are mostly not available on local cable networks.
However, digitization has broadened the scope significantly. Digital networks have the capability to carry 300 to 1000 channels with the high-quality transmission. During pre-digitisation era, broadcasters used to place an English channel on a prominent band only in top cities of India and in the rest of cities, it was always placed in one of the lowest bands. Due to its availability on lowest bands, the picture and sound quality used to be very bad.
Post first phase of digitization (November 2012), viewership of English entertainment channels has shot up by almost 40%. A huge jump. This growth has further fuelled by the launch of premium HD channels such as HBO Defined, Star World Premiere HD etc. giving them access to the current season of popular American sitcoms at the almost same time as when they were aired in the US market, in high definition.
Local cable operators have been losing customers to DTH platform over past few years since they are not able to offer English entertainment channels on their analog network. Today users are willing to shell out extra money for consuming high-quality English contents by subscribing it rather than downloading it from torrent sites.
Currently channels like Star World Premiere, HBO Hitz, etc. are completely subscription driven and doesn’t depend upon advertising as a core source of revenue. Currently, most of the broadcasters earn around 60% of revenues by adopting the advertising model. Many broadcasters are confident that subscription-driven model will work even in India just like how it worked in developed economies. Digitisation has empowered the broadcasters to launch subscription-based channels in India with HD quality and surround sound features.
Even after growth in English content viewership base, the advertising rates remain low for this genre whereas desi entertainment channels charges around 20 t0 25 times higher than English channels. Although the subscription-driven model is the way forward, the revenue model has not been optimized yet.
It is expected that as the market evolves, this segment will get critical mass for the audiences and then the paid model will optimize but till then, broadcasters have to depend on advertising revenue model only.
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