On market trends in the Pay TV industry

We believe that the Pay TV industry will see some major changes in 2010. First of all, we expect the growing DTH customer base to continue and thus have an impact on digitalization of cable TV, which at the moment is seen as lagging these developments. We expect the major MSOs and other cable operators to push for digitalization in a major way in 2010. This will also be helped by new policy announced for Headend in the Sky (HITS).

Secondly we expect a drive towards HDTV to intensify. This is an area where significant developments are imminent considering that HDTV has been a major driver for the change of markets in Europe, USA and Parts of Asia. We expect HDTV to be implemented in both DTH and cable TV segments.

Third, we expect the Video on Demand and Movies on Demand to pick up significantly as the value of these services is now realized by the industry and the consumer base which can be addressed is getting larger.

On security solutions for guarding the value of Pay TV content

The main plank of platforms available today are the encryption systems such as Conax, Irdeto,Viaccess, and NDS. These are used in both DTH and cable TV segments. We expect this to remain the key methodology for content protection. Features such as fingerprinting, geographical segregation (possible in two way systems with GPS) to begin to get more refined. This is necessary to check piracy which is still rampant in the analog cable TV systems.

On the digital infrastructure for Pay TV

Digital infrastructure for Pay TV services is now standard. In addition high value content can be protected by DRM. This prevents such content to be recorded and played without proper copy rights. High value content such as for digital cinema is already being protected by DRM in terms of the number of shows or timings which can be exhibited from a given content. The same is also possible in Pay TV industry with receivers which support DRM.

On obstacles for achieving a growth in the Pay TV industry

At present the policy structure is still deficient in the pay TV industry. First of all there is still no uniform policy for entertainment tax in the country. This will result in irrational and unexpected levies and leads to difficulties in pricing and distribution.

Secondly, just as all major countries have helped along the digitalization of Pay TV, this is still not a priority for the Government as it would appear from actions in this area. USA for example had given away the digital decoders free, even though they have a higher per capita income. In India, no such incentives have been thought of with the result that the process has become politically difficult.

Thirdly, the Government has still not brought out the licensing policy for terrestrial TV, which is also very important as a medium of delivery. The success of FM indicates that such a step is long overdue.

Fourthly the DTH and HITS services are facing a roadblock in terms of capacity availability on satellites. With five DTH systems in operation, a severe demand shortage gap has developed.

Fifth, the movement on granting of applications for new channels, changes in satellite or other details is still very slaw and bureaucratic. This has the impact on the pace of developments in the sector.

On content regulation and various delivery modes of content delivery

Industry has been highlighting the case for an independent regulator for broadcasting sector. At present with a common regulator overburdened with issues in the telecom sector, there is inadequate attention to the issues facing the media sector.