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By 2020, only 7% of total video revenue to come from online: Report

Media Partners
Asia (MPA) has released a report on ‘Future Value Creation in TV and
Broadband’, which highlights that despite delays in DAS implementation,
digitalisation progress is on track.

Media Partners
Asia (MPA) has released a report on ‘Future Value Creation in TV and
Broadband’, which highlights that despite delays in DAS implementation,
digitalisation progress is on track.

Cable,
meanwhile, shifts focus from expansion to monetisation on video, broadband and
higher network control, said the report. Following a blitzkrieg of cable
set-top box (STB) deployment, the digitalization process is taking a breather
as operators shift focus from deployment to monetization in order to ensure
growth with profitability.

From a myopic
lens, the pace of India’s pay-TV growth story may appear to be in trouble.
However, as we track the trajectory of other large-scale developed and emerging
pay-TV markets, it’s clear that the process of profitable digitalization
typically takes 15-20 years. In this context, for a market characterized by low
ARPUs, absence of tiering and fragmented last mile cable distribution, India
has done well to attain 48% digital pay-TV penetration in eight years.

According to
Media Partners Asia, while online video consumption is expected to increase,
monetisation of the same is a potential pain point. The report also mentions
that traditional broadcasters are looking to capitalise on the emerging digital
opportunity by investing to create long-term assets. For instance, incumbent
broadcasters Zee, Star and Sony have started to aggressively invest in
delivering branded OTT services. The belief is that online video consumption
will complement the existing linear pay-TV business.

Eventually,
subscription OTT services will take off as bandwidth costs become more
affordable and compelling exclusive content is made available for online
audiences. Nonetheless, revenue monetisation will require more scalability, as
online video revenues are projected to account for not more than 10 per cent of
total video industry revenues over the next decade.

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