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Second covid wave: cable, DTH companies may lose up to 20% subscribers

In a repeat of last year, a fresh surge of covid-19 cases may see a decline of 15-20% in cable and DTH (direct-to-home) subscribers though some may return once the situation improves and things go back to normal, said analysts tracking the media sector.

While many customers in low-income groups have moved out from metros to hometowns and villages, commercial spaces like restaurants and hotels have also been shut down for more than a month.

“In metros, cable subscribers have shown a drop over DTH specifically with the lower middle class or low-income group shifting back to their hometown. These are cost conscious consumers and constitute a large proportion of subscribers in India,” Vishal Shah, managing partner, west at GroupM-owned media agency MediaCom India said.

Karan Taurani, research analyst at Elara Capital Ltd, pointed out that economic hardship may force some lower and middle-end subscribers to drop out, but he thinks individuals and families will come back like they did last year. “However, the challenge for DTH operators is that their premium base is skewed towards commercial spaces that will take longer to bounce back. Those are unlikely to see any real footfalls for very long,” Taurani added.

Compared to last year though which had seen a nationwide lockdown, Taurani said, people are better prepared to deal with disruptions this year and not all activity has been halted.

DTH companies like Tata Sky and Dish TV declined to comment on the story. Cable companies such as SITI Cable and Hathway did not respond to Mint’s queries.

But good news for cable and DTH companies stems from their continuing relevance and ability to innovate. According to Global State of the Consumer Tracker, a survey by professional services network Deloitte, as far as discretionary spends go, Indians have shown the highest intent on spending on cable TV as compared to any other country globally at 38%.

According to Trai’s Indian Telecom Services Performance Indicator Report, DTH active subscriber base increased to 70.99 million in December 2020 from 70.70 million in September 2020. Cable saw a 3% year-on-year decline in 2020, according to the Ficci EY media and entertainment report.

“Digital payment is gaining an important presence in semi-urban and rural markets where data connectivity is low and the only source of infotainment is television,” Vynsley Fernandes, managing director and chief executive officer, NXTDIGITAL Ltd said in response to the possible impact of the spread of covid-19 infections in small towns lately. NXTDIGITAL is a media company delivering services across cable, satellite and broadband.

More than 90% of its subscribers pay cable operators online, Fernandes added, and while there may have been discovery of web content in smaller towns, television will continue to be the mainstay with no significant migration to streaming services. The company has been rolling out payment options on Paytm, Google Pay, Phone Pe, WhatsApp and other platforms.

“The pandemic has reinforced the rising importance of regional or local content or local news and knowhows and cable with its hyperlocal content has been preferred along with its easy-to-pocket monthly charges compared to its DTH counterparts,” said Mediacom’s Shah.

“All DTH platforms have launched ‘hybrid set-top boxes’ which have linear TV and streaming sites built on one single platform. Users can easily switch between regular TV and any streaming site easily. These boxes have gained a large number of subscribers in the last year and soon DTH operators will be launching full scale monetization of the same. Cable operators are also experimenting with their own channel launches in different ways and with movie content libraries that they are building,” he added. Live Mint

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