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DTH News : Game-changing opportunity as free TV set to reach 46 mn homes by 2020
MUMBAI: There is a word of caution for pay TV DTH operators and cable TV networks. Witnessing exponential growth, free TV viewership in India is set to reach 46 million households by 2020, according to a forecast report by EY.

Titled ‘India’s free TV: a game-changing opportunity’, the report said that this growth would be in addition to the consumption of content on mobile DTT handsets.

[Image: We-expect-Free-TV-to-reach-46-mn-households-by-2020.jpg]

The increase in the number of free-to-air (FTA) channels has led to a significant rise in viewership for genres such as Hindi GEC, Hindi movies and primarily the Hindi news genre, in which FTA channels command 81% of the total viewership.

[Image: FTA-channels%E2%80%99-viewership-share-by-genre9.jpg]

Commenting on the same, EY partner, advisory, media and entertainment, Ashish Pherwani said, “Free television is increasingly becoming a viable option for channels looking to capture the base-of-pyramid audiences in urban and non-urban areas. With a large subscriber base, it also opens up new avenues of advertising for marketers looking to get reach in some of the fastest-growing markets in the country. The change in customer behaviour will also have a significant impact on FTA and pay TV channel uptake, and corresponding spends on subscription income.”

Currently, rural TV viewers account for 52% of the overall viewership. However, it is estimated to contribute 74% of the total viewership on DD Freedish.

The report outlines four key factors that will drive the uptake of free television:

1. Digitisation of cable TV distribution – DAS IV

The mandatory move towards digitisation will require consumers, particularly those in DAS III and IV markets, to opt for more expensive cable TV options, DTH or free TV options such as terrestrial TV or Freedish. EY expects the price conscious customers may opt for free television services in the immediate term.

2. TRAI’s proposed tariff order

The new tariff order proposed by TRAI will make customers choose between the options to either pay more to receive pay channels of their choice or decide that free television would be a better option, given the quantum of quality content on it. This will help further drive subscriptions from price conscious consumers for free TV.

3. The fast growth of DD Freedish The DD Freedish bouquet is set to increase to over 250 channels, featuring quality content, also including sports being available on its spectrum. This makes the Freedish bouquet a formidable competition to pay bouquets.

4. DTT on mobile infrastructure

Another important development relating to mobile television is the emergence of digital terrestrial distribution. Since this is a broadcast technology, the key implication will be that consumers whose mobile handsets have the required antenna would not be required to pay any bandwidth charges. Consequently, once the mobile handset ecosystem matures, DTT could also provide a strong addition to free television services.

DD Freedish, the state-run DTH provider, is the largest TV distribution company in the country with an estimated 22 million subscribers. This is considerably more than national pay TV companies, which average 8 million to 16 million each. With over 803 channels currently, DD Freedish plans to add 104 additional channels by 2017 and eventually reach 256 channels by 2020.

The subscriber base of DD Freedish is projected to reach 40 million users in the next 2–3 years. The implementation of the Tariff Order of 2017 could further push the FTA viewer base to 46 million by 2020. FTA channels, which allow users to watch content without paying a subscription fee, also provide a cost-effective option to advertisers who target the middle/lower-income audiences for their products.

All large broadcasters, including Star, Zee, Sony and Viacom, have launched their Freedish-based channels. The content on these channels is similar to that on the broadcasters’ general entertainment pay channels but is dated by up to a year or even less. The success of channels such as Zee Anmol (with ad revenue of Rs 80 crore) and Sony Pal (with ad revenue of Rs 110 crore) has led to even further channel launches by broadcasters, which have now launched FTA film channels on Freedish as well.

Hindi news television, a segment always skewed towards FTA channels, has taken to DD Freedish in a big way in order to protect its ad revenues and save on the carriage fees charged by distribution companies. Almost all large Hindi news channels are now on the DD Freedish platform.

This, in turn, led to an increase in a channel’s reserve price on Freedish to Rs 8 crore in the bidding round held in 2017.

Growing TV households: There has been a significant rise in the number of TV households in India (from 119 million in 2011 to 183 million in 2017 and an expected increase to 200 million in 2020) thanks to the plethora of TV distribution options now available.

The market in 2016 was split between pay DTH (42 million), organised cable (50 million) and other pay cable (56 million), apart from Freedish and terrestrial television (together 30 million).

BARC India capturing data for the rural sector: In the past, the lack of visibility on rural viewership data prompted both broadcasters and advertisers to focus on urban audiences. However, with ratings agency BARC India now reporting rural viewership data, broadcasters have opened up to the idea of providing their content on FTA and pay channels, which cater to the rural segment.

Segmentation in pricing for advertisers: FTA channels have also opened up avenues for advertisers with moderate budgets who could not afford high ad rates for content aired on pay channels such as Zee TV and Star Plus.

Broadcasters are adopting a model of segmentation in pricing for advertisers with the objective of being present in the pay market as well as the FTA market. Sun TV adopted a similar strategy for KTV in the South to target non-premium advertisers.

Some broadcasters such as India TV are taking a different approach to increase their revenues by increasing their ad rates as advertisers shift focus to capture the under-penetrated non-urban and rural markets. Brands today are striving to drive growth from rural markets. In fact, for mainstream FMCG companies, 35–40% of sales are derived from rural areas. With BARC capturing rural data, the rural viewership is expected to grow and as a result advertising brands and agencies are expected to increase their focus on rural audiences.

Hindi news channels shifting to FTA: DD Freedish has emerged as a popular home for Hindi news channels. With increased visibility on rural viewership due to BARC, news channels are finding the subscription-free model more attractive. The 81% contribution of FTA channels to the total viewership in the Hindi news genre has prompted channels such as NDTV India to move to an ad-only model. These channels have forgone their subscription revenues with the target to offset that loss with a gain in ad revenues.

The unstable viewership of Zee News forced it to shift from a pay TV channel to an FTA model. This decision came with a goal to expand the channel’s reach and has resulted in a 30% hike in its ad rates.

Implications of growth in FTA TV: Key considerations for broadcasters and distribution companies in the near future will include the following:

Broadcasters: Pricing of channels, particularly those that are not leaders in their genres and determination of whether channels should move to FTA

Number of channels to include in base and base+ packs of distributors

Carriage fee considerations

Creation of free television products, and differentiation of free and paid television products

Competition from Freedish offerings to broadcasters’ pay channels

Increasing audience reach from a DTT perspective


Creating packages for various customer segments, while at the same time convincing customers to pay more for fewer channels

Ensuring that channels from all broadcasters are present in each popular package

Placement of channels in and within appropriate packages

Prevention of subscriber migration to free television

Ideas to consider

Listed below are some opportunities that EY believes free TV could consider to monetise its customer base.

Own channels

Free TV has the audience, and it is growing. It could be a good opportunity for it to monetise this audience with negligible content cost by launching more channels. They could use the best content from the existing bouquet or take the large volumes of content created for digital-only platforms such as YouTube and provide a platform for such content. This will generate additional advertising inventory, which can be sold to advertisers.


While music is consumed mostly on mobile phones, consumption in homes is limited. By providing music stations through the service, Freedish can earn either licence fees from other radio companies or ad revenues if it decides to run the stations by itself.

Ads on the launch page

As with other cable and DTH companies, the landing page now generates advertising revenues. This is an income source that free TV can look at monetising quickly.

Airtel Digital HD Recorder / Kerala Vision Digital TV
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