Tata sky

1. Brand Extension Study Anupam Kr Bhattacharjee PGP30011 Sec A

2. Much has changed since those days. or has it? THEN NOW

3. How does Satellite and Cable TV work ? Source: https://www.youtube.com/watch?v=8hEDeMFrzo4

4. 12 years of DTH in India: the other electronic revolution Dish TV first to launch direct-to-home (DTH) television services in India on October 2, 2003 In the initial years, DTH service providers wanted to capture the untapped rural market, remote areas and city outskirts where cable network wasnt available or of very poor quality Faced issues like dish installations, channel bouquet negotiations with major players like STAR 12 years later with little over 37 million active subscribers and 23% TV household, DTH has successfully challenged might of cable television Customer sees value for money with superior quality of broadcasting and customizable service packs Today, DTH industry is adding about 8.5 million customers per year which is 4 times more than cable additions Favorable government policies like DAS/CAS has improved transparency for multi operator systems and broadcasters Source: http://www.business-standard.com/article/companies/10-years-of-dth-in-india-the-other-electronics-revolution-114010100022_1.html

5. Some stats about the DTH industry in India Operator Gross Subs (mil.) Market Share (%) Active Subs (mil.) Market Share (%) Airtel Digital TV 10.07 16% 7.30 19% Big TV 5.54 9% 2.90 8% Dish TV 16.87 28% 8.69 23% Sun Direct 9.57 16% 6.17 16% Tata Sky 11.58 19% 7.17 19% Videocon D2H 7.68 13% 5.29 14% Total 61.30 100% 37.51 100% Operator wise subscriber base in India (for April 2015) 80% of DTH subscriber base in India is categorized as Urban and 20% as Rural 6,629.20 8,086.80 8,687.60 9,757.20 11,425.70 12,991.10 2013 2014 2015 2016 2017 2018 Forecast Sales of DTH Connections by volume (in 000s units) for 2013-18 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

6. About TATA Sky Year of Incorporation Incorporated in 2004 Second to launch DTH services in India in 2006 after Dish TV Parent Companies Joint Venture between Tata Group (70%), Star India (20%) and Singapore based Temasek Holdings (10%) Market Position Second largest DTH player in India with a market share of ~19% Positioning Strategy Unlike Dish, Tata Sky started by concentrating on the big metros and cities where it saw a large untapped market of consumers disillusioned with analog cable. Harit Nagpal, chief executive of Tata Sky: "We started concentrating on urban markets where consumers were ready to pay a premium for better quality. Source: http://www.business-standard.com/article/companies/10-years-of-dth-in-india-the-other-electronics-revolution-114010100022_1.html

7. The DTH subscriber base in India is expected to grow at 11.25% annually over the next decade with Tata Sky leading the race with CAGR of 21% Forecasted growth of DTH subscriber base(in 000s units) for 2012-2022 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 2015 2016 2017 2018 2019 2020 2021 2022 Basic Subscribers Premium Subscribers Ultra Premium Subscribers Forecasted growth of Tata Sky subscriber base(in Mn units) for 2011-2020 8.3 9.37 10.57 11.5 13.5 15.17 17.05 19.17 21.54 24.21 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 TataSkySubscriberBase Year Tata Sky is expecting 30% increase in its subscriber base by next year on account of roll out of 3rd phase of digitization by TRAI that has not been accounted here Source: http://www.nsr.com/news-resources/the-bottom-line/changes-in-the-most-dynamic-dth-market/

8. Elements of Product Offering CORE BENEFIT High picture quality and reception Entertainment and Interactive Learning BASIC PRODUCT Digital TV service allowing reception of television signals in digital format 4:3 aspect ratio with minimum pixel resolution of 640*480 EXPECTED PRODUCT Better picture and sound quality than analog cable Greater number of channels with flexibility to choose base packs/top-ups AUGMENTED PRODUCT Interactive services; Genre based channel packs High quality of customer services and after sales maintenance POTENTIAL PRODUCT Launch of IPTV & HD+ (4k and higher resolution) and 3D channel packs 8

9. Tata Sky Services and Product Portfolio 9 Source: https://www.mytatasky.com/DirectSales/BuyOnline?pageReQueSt=TskyBuyOnline

10. 10 Pricing of Tata Sky Services Price Sensitivity The DTH market in India is highly price sensitive due to multiple large players Pricing of base packs, top-ups and ala carte channels are more or less standardized for all the players Switching cost for DTH customers are high ARPU ARPU (Average Revenue per User) is Rs.310 per month Daily burn rate may vary from Rs. 8 to Rs. 25 depending on the base pack and top-ups Comparison with Competitors Tata Sky channel packs are priced higher than Dish TV, Airtel DTH and Videocon D2H counterparts Caters primarily to subscribers in metro cities and tier I cities Interactive services and customer service is the differentiating factor Highly customizable channel packs unlike more standardized packs made available by its competitors Price points of Popular Tata Sky Base Packs

11. Tata Sky has adopted several pricing related initiatives in recent years to fight increasing competition Reduced prices of SD, HD and HD+ set-top box while providing higher base packs free for limited time duration for new installations, thus increasing ARPU and retention rate Encourage customer to subscribe to long duration packs (>6 months) via discounts & promotion schemes Discount for Multi-TV Connections Reference a friend scheme that provides discount to existing customers for referring neighbors and friends to Tata Sky Connection Community Dish: Provide incentives in the form of free 3-6 month usage and lower installation charges per flat 11Source: http://www.comparedth.com/

12. Tata Sky has a wide distribution network across the country 12 12.1% 10.5% 7.2% 6.9% 6.6% 6.4% 5.3% 4.7% 4.6% 4.6% 4.5% 4.0% 3.8% 18.8% Breakup of Tata Sky Connections across States (2013) Supply Chain Mgmt Dept Regional Distributor Retailer End Customer Customer Service Centers Packaged Product Packaged Product, Recharge VouchersActivation request for new installation initiated by Dealer Dealer sells Connection and collects first time subscription fees Activation, upgradation and catering to other Provisioning requests Complaints, Queries and Payments Payment via Paper Recharge Coupons TATA SKY Distribution Channel System for Tata Sky Source: http://www.tatacapital.com/export/system/modules/org.tclcorpsite.templates/resources/Forms-Brochure/TC-Forex-Annual-report-2013-14.pdf

13. Over the years Tata Sky has come up with innovative promotional schemes to stave off competition 13 In April 2015, Tata Sky launched the worlds first Daily Recharge plan for a meager Rs. 8 to capture small town and rural markets To promote this disruptive concept, Tata Sky introduced a first of its kind ad campaign in association with Ogilvy & Mather, comprising a series of 13 TVCs The catch line was Jis din TV dekho sirf uss din ke paise do (You only pay for the day you watch TV) Festival season in India (Sept to Nov) show a spike in the sale of televisions accompanied by a sale of new DTH connections Tata Sky and Dish TV were the first players to try and capture this opportunity Bundled offers, discounts and promotional schemes are designed to increase sales and capture new subscribers Tata Sky was the sole DTH service provider to provide Star World Premier HD No extra charge was levied for this HD channel Helped capture significant market share Source: http://www.digit.in/audio-video/tata-sky-still-living-with-sd-in-an-hd-world-10292.html

Tata sky

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