Did you ever imagine that you could book movie tickets, find a job or learn English through your TV? Now you can with direct-to-home (DTH) services providing an array of value-added services (VAS) such as high definition gaming, pay-per-view movies, shopping, insurance calculators, English learning programmes, style, spa and many other interactive services. These services have opened a new stream of revenue for DTH service providers.
Industry experts said VAS contributes four to five per cent to total revenue across the DTH industry. "The space is growing as it is a pre-mature market. The growth depends on how DTH expands in the near future," said Sugato Banerji, CMO, Airtel Digital TV.
Till last year, there were one crore DTH subscribers. It is expected that by the end of this financial year, the sector will have 3.2-3.3 crore subscribers. Service providers say VAS has the potential of becoming a feasible revenue model. They are also exploring alternative revenue models within it.
“With the DTH space getting cluttered by many service providers, the content and quality of VAS will help in the health of providers’ balance sheets,” said Ashesh Jani, leader - media, Deloitte, a consultancy. He added that pricing of such services will be of prime importance for the business.
Marketers have come up with the idea of selling the physical spaces within channels to brands for advertisements. “We have a plethora of brands with us, such as Hindustan Unilever, Titan, Vodafone, Pepsi and Coke that are advertising through this platform,” said Vikram Mehra, CMO, Tata Sky.
Another VAS is the contest service, where brands sponsor and organise contests with user participation through SMSes. Brands are also sponsoring entire movies under the pay-per-view service.
DTH companies have started tying up with content providers, game studios, digital brand advertising networks and many other service facilitators. Where Airtel Digital is tying up with Networkplay to sell the advertising space for them, Tata Sky recently announced a tie up with Hungama Games.
Dish TV is collaborating with monster.com to facilitate job hunting through DTH. Reliance Big TV and Indiagames, subsidiary of UTV, have announced strategic agreements to introduce gaming services.
The marketing strategy is based on a simple principle: ask the customer to taste the flavour for free.
Once he starts liking it, charge for every scoop. For instance, in gaming, the most popular service in this category, service providers are encouraging gamers to experience the platform by providing a few levels or entire games free.
“We are providing three free games and three paid games. Kids, who consume the service the most, start playing free games first and once we win their curiosity, they ask their parents to pay for other games,” Banerji said.
Looking at the basket of creative ideas companies are using to interact with users, as well as to generate revenue, other DTH providers are also mulling options in VAS. “We are contemplating a pay model for some services, especially gaming, as we are not cashing the model yet. For us, the model is more about differentiation rather than revenue,” said Salil Kapoor, COO, Dish TV.
Clarifying the utility of this model, Ratna Chaudhary (32), a housewife, said: “Along with learning English, I got to know how to open a bank account. It makes me feel literate.”
DTH companies agree that VAS is exciting but involves continuous innovation because of replication of applications. “It is a live platform that is strategic in nature. People can differentiate the services from the conventional analog cable services,” said Mehra.
“VAS in DTH will transform the TV screen from an idiot box into an intelligent machine, where the innovation will go beyond the imagination,” Banerji said.