For an entertainment and media hungry market like India, internet protocol television (IPTV) is poised to spice up the viewing habits of the population at large.
Telecom regulator Telecom Regulatory Authority of India (Trai) released its recommendations on the policy framework surrounding IPTV in January 2008. Recent reports indicate that the policy being announced is most likely in line with the recommendations in allowing telcos, cable operators and ISPs (with specified network) to provide IPTV services to customers; and allowing broadcasters to provide content to such providers.
The first issue to be considered actually is whether this is a ‘communications’ space issue or a ‘media’ space issue. The Trai recommendations paper indicates that telecom operators are being seen as ‘carriers’ for content created and delivered by broadcasters and other players in the media space.
The responsibility for content is envisaged to be with the ‘creater’, and in the event that the telco or an ISP commissions or creates original content, the carrier is expected to comply with all necessary broadcasting/media/ technology related guidelines issued by relevant functional ministries and regulators. Thus, while from a policy perspective, the content creation and carriage are being structured as two distinct activities, it will be interesting to see how the market on the ground develops—is true convergence happening with carriers getting into the content space—or not.
Even globally, IPTV has currently seen rather low level of penetration—near 1-5% globally, with Asia Pacific leading at 3% and EMEA and the US at far lower sub 2% and 1.5% respectively. This low penetration is attributed primarily to the combination of availability of service and consumer understanding.
In India, the television industry has grown at a very healthy 21% over the last four years, including 13% in 2007 over the prior year. The total revenue of Rs 226 billion in 2007 is expected to continue to grow at similar rates, to touch Rs 600 billion in 2012.
The key constituents of this revenue are television distribution with a 63% share in 2012, (up from 60% in 2007) and television advertising at 33% in 2012 (down from 35% in 2007) of this vibrant market.
Cable TV clearly is the king, with DTH households being less than 5% of cable TV households. Currently, with hardly any differentiated offerings, attracting customer to a different platform is seen as a challenge. IPTV too is likely to face a similar challenge—in communicating to customers, the differentiation...