ICRA, a ranking company, forecasts the revenues for the Indian pay-TV business to witness a contraction within the vary of 1-3% in FY2026, pushed by a sustained shrinkage of their subscriber base, which is more and more shifting to both over-the-top (OTT) platforms or free dish companies (offered by sole state-sponsored DTH operator – Prasar Bharti). Combination working margins and protection indicators are anticipated to reasonable additional by 175-225 bps YoY to 23-25% (33-35% for DTH and 6-8% for MSO pattern) in FY2026 from FY2025 estimated ranges, although sturdy parentage of main gamers will guarantee enough liquidity and entry to capital for investments.
ICRA expects the subscriber base decline to be offset, to an extent, by a better common income per person (ARPU, common 1-3% development YoY) on bundled or premium choices and business consolidation. Bundling of conventional TV content material (with OTTs and/or broadband companies) and extra premium content material choices (reminiscent of HD, 4K, and dwell occasions), will help development in ARPU. However, elevated content material acquisition prices (e.g., sports activities rights, premium worldwide content material) and constant capex/opex in direction of community enlargement and upkeep will proceed to compress margins for pay-TV operators, in ICRA’s view.
Offering her views, Ritu Goswami, sector head, company scores, ICRA, stated: “A number of elements make OTT a most popular mode of watching TV for shoppers – like- on-demand and personalised content material, ad-free viewing choices, entry to regional content material and versatile subscription fashions (cell solely to multi-screen, primary to premium high quality). As well as, the telecom and digital revolution (with growing sensible cellphone penetration, reasonably priced information plans, percolation of sensible/linked TVs) and regulatory modifications (regarding pricing caps for channels and guidelines for his or her packaging) have aided the shift to non-traditional modes of TV viewing in India during the last decade.”
The Indian tv market is subsequent solely to China, with almost 190 million TV households in 2024 (estimated), a quantity which is predicted to continue to grow within the close to time period, with its growing inhabitants and their disposable incomes, resulting in transition from TV-dark (i.e., having no TV) households. Nevertheless, the business is present process a structural evolution – with subscribers on the larger finish of the ARPU pyramid shifting away from pay-TV to sensible/linked TV or different digital options and people on the decrease finish shifting in direction of the free dish. Additional, a big variation in city and rural pay-TV subscriber dynamics is obvious in India; the shift away from pay-TV has been sharper in city areas (shift to digital streaming platforms pushed by larger disposable earnings, entry to wired broadband infrastructure, amongst different elements) whereas traction free of charge dish companies has been noticed in rural or low-income households.
“Regardless of having a big subscriber base, the Indian TV distribution business lags developed markets just like the U.S. and Europe in measurement as a consequence of their larger ARPU. It’s the highest within the U.S. and Europe as shoppers pays for premium content material like sports activities, HD, and unique programming, whereas India and China keep a lot decrease ARPU as a consequence of their huge, price-sensitive subscriber bases. Given this value sensitivity, the tempo of ‘cord-cutting’ in India might be comparatively reasonable, with important variation in city vs. rural markets. A powerful custom of TV viewing, availability of reasonably priced hybrid choices and challenges associated to web infrastructure will even forestall any sharp fall in pay-TV subscriptions,” Goswami added.
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