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Shuchi Bansal: MyWay or the highway
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It’s not quite time for DTH to retire, as a leading IPTV firm would have us believe, since there are 13 mn DTH subscribers compared to IPTV's 30,000.

It’s time for DTH to retire. That was the boast IPTV firm Smart Digivision made on huge billboards across the country when it began its MyWay IPTV services three months ago. But against Direct-to-Home TV’s 13 million subscribers, all three IPTV firms including the Mahendra Nahata-promoted firm which has a licence to run IPTV services in 54 cities across the country have a total of just around 30,000 subscribers. That is, DTH is a long way from retiring. While Smart Digivision’s MyWay, like Aksh Optifibre’s operations, are run in association with BSNL/MTNL, the really big brand offering IPTV is Bharti Airtel (it also offers DTH services).

IPTV offers much of what DTH offers, and a lot more. So, you no longer have to worry about having missed your favourite television serial, and not just because you managed to record it when it was being aired. IPTV allows users to punch a few buttons on their remote and view the last seven days’ episodes of their preferred show. TV junkies can also choose from a library of films available and view these at their convenience. That’s not all. They can forward, rewind or pause the film in case they need to take a break. You can order a pizza while watching the film, not by dialing a number but by using your — surprise, surprise! — television remote.

Basically, IPTV’s USP is its interactivity — it allows the viewer two-way communication to access a host of value-added services. Such interactivity is not possible in direct-to-home (DTH) TV. Basically, IPTV or internet protocol TV is a real-time broadcasting system for delivering television programmes to households through a broadband connection using Internet protocols or systems.

By and large, IPTV operators offer what is called a “triple play”, that is, Video on Demand (VOD), Voice over IP (VOIP) or phone services, and web access. As a result, operators are vying with one another to offer a larger bouquet of services. MyWay offers almost all the popular channels in the entertainment, news and other niche genres. However, the company’s chief operating officer Kapil Dev Kumar is currently pushing for a mobile text message service made possible through the TV set. “Anything to do with communication needs clearance from DoT. We are in the process of getting the necessary permissions,” he says. Vikas Singh, the Chief Marketing Officer at Bharti’s Telemedia Services says that Airtel Digital Interactive’s USP is timeshift TV (Airtel allows the customer to access the last seven days’ TV content) and Video-on-Demand. “But that’s for now. It’s possible to offer video conferencing facilities in the future,” says Singh. Aksh offers 120 TV channels and its promoter Kailash Choudhari takes pride in his special On-Demand advertising channel called Atube. Under categories such as lifestyle, education, healthcare and matrimonial services, the channel catalogues comprehensive information on these subjects.

And yet, the demand for IPTV has not really picked up — Airtel, which began its services in the National Capital Region in January, has just 10,000 customers though it has around 5 lakh broadband customers across the country. Nor is it that the costs are prohibitive (see graphic). MyWay offers 126 channels at Rs 280 a month and the set top box is available at Rs 2,000 (there’s an alternative of Rs 50 per month along with a Rs 1,500 refundable security). icontrol charges Rs 249 for 140 channels; Airtel starts at Rs 1,999 for activating voice, broadband internet and IPTV. One of the Triple Play Combo Plan is priced at 1,299 per month and offers a broadband connection at 384 Kbps with unlimited data transfer, an IPTV connection with 135 channels and Rs 150 worth of Movies on Demand free for 3 months and a fixed line connection with STD calls at Rs 1.50 per minute. The pure IPTV pack costs Rs 399 per month for an IPTV connection with 135 channels and Rs 150 worth of Movies on Demand free for 3 months.

The consumer response for a technology which is superior to DTH, admits MyWay’s Kumar. He says that one of the biggest reasons for a slow start to IPTV is the mental block that people have against the new technology. Though there are about five-six players in the business already, the customer still needs to be educated. In fact, even DTH took time to take off though Dish TV launched its service in 2003. (Dish TV suffered lack of content initially as Star refused to lend its bouquet to the platform).

Educating the customer would have been a lot easier if the IPTV players had bigger advertising and promotion budgets. Operators working in association with MTNL and BSNL are small technology outfits which have not spent more than a couple of crore on their media campaigns. (Currently, operators like Aksh and Smart Digivision are attempting to raise money to expand their services. Like DTH, the customer acquisition cost in IPTV is high — it could vary between Rs 2,000 and Rs 3,000 per customer. And this does not include the marketing cost.)

IPTV operators working with the government-owned telecom companies expected high decibel advertising from Airtel — DTH connections jumped when operators started advertising heavily and ad spends in the category crossed Rs 500 crore a year once all the operators were operational. But Airtel invested in direct marketing, demos and internet advertising. Some of MTNL and BSNL’s partners feel that customer’s lack of faith in the quality of a service associated with the government-owned telecom operators also caused an initial resistance in accepting the service.

MyWay faces other problems in south India. The Sun TV network is yet to agree to share its content with MyWay without which it is tough to break into that market. Aksh promoter Kailash Choudhari says that accessing content for IPTV platforms is complicated. It was only late last year, after the government asked broadcasters to share content with the new technology platforms, that icontrol could complete its bouquet.

Even now, not all broadcasters follow the government diktat and some ask for minimum guarantees (pay us for a certain number of customers, otherwise we will not give you our signal) from IPTV operators. But the IPTV players are not complaining. Most have signed up deals with the broadcasters. “Not everything can be regulated. So we negotiate and try and get content,” says Choudhari.

Another problem, says cable industry veteran Ashok Mansukhani, is that “IPTV is sold like the third cousin of cable and DTH. Its creative potential has not been exploited”. According to Mansukhani, IPTV can pose a tough challenge to other distribution platforms by 2011. In spite of a slow start, IPTV operators are banking on the increasing number of two-TV homes and hoping that there will be churn from DTH. Airtel’s Vikas Singh says that IPTV holds immense possibilities since the customer gets a high level of control and the appeal of the service can be enhanced. However, it will never be a mass market service, he feels. Singh claims that IPTV has pushed up his average earnings from each customer and so, after Delhi, he is eyeing Bangalore, Chennai and Mumbai markets. MyWay, meanwhile, is looking westwards. It is launching in Ahmedabad and Pune. Whether it will be MyWay or the highway for DTH, however, remains to be seen.

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