With a national launch in a country of one billion people in little more than two months, one of the direct-to-home broadcaster Tata Sky's biggest hurdles is convincing existing distribution in India it is not trying to put them out of business.
Local cable operators in India are worried that following the launch of the platform (a joint venture between the Indian company Tata, which has interests in steel, software, cars, retail and more, and Star TV), they will lose access to the Star package of channels, or at least see subscription costs go up.
Virtually all households in India that receive cable and satellite TV not do so directly by subscribing. Instead, a local cable operator delivers a signal through underground or overhead wires. The local cable operators, in turn, are franchisees of "multi-system operators" (MSOs), which actually subscribe to the satellite channels and distribute them.
With this system, the consumer has no choice over what channels they get, as each cable operator has a geographical monopoly. Monthly subscriptions for a bundle of 20 to 100 channels range from 150 rupees (about £2) to 800 rupees (£10), and vary more by the affluence of the area than by the television offering.
Tata Sky and Star TV, whose output includes the popular soap operas Kyunki Saas Bhi Khabhi Bahu Thi and Kahaani Ghar Ghar Kii, have assured the cable operators the service will operate independently. But the whole fracas is typical of the rather rocky road DTH services have travelled in India.
With broadcasting regulations prohibiting any sort of DTH transmission until recently, there are only two players in the Indian market: Dish TV, the DTH service from the broadcaster Zee, which launched last year, and the state-owned Doordarshan's free DTH service, DD Direct.
Both services have done well since launching, with an estimated seven million viewers for DD Direct and eight million for Dish TV. Tata Sky is also targeting the entire spectrum of Indian viewers. Its chief executive, Vikram Kaushik, says: "We plan to introduce a service that would allow it to reach every Indian home, however remote it may be."
Though Dish TV and Tata Sky both cite DTH staples such as the higher quality of transmission and the possibility of value-added service such as interactive TV, on-demand programming and gaming as their strengths, their success stems from a very different benefit.
While TV penetration in larger towns and cities is around 90 per cent, in rural areas and villages, penetration is below 30 per cent. These poorly penetrated areas do not have access to satellite TV, as the MSOs that distribute satellite signals do not operate there. So, until the advent of DTH, Doordarshan's terrestrial channels were rural viewers' only option.
DD's DTH service (which is free, once a consumer has purchased a 3,000 rupee set-top box) has done particularly well in these areas.
But, one media planner notes, "they are not subscribing to get better-quality signals of DD channels. They are taking it for Star Utsav, or Jagran TV," which no cable operator delivers in their areas. The Dish TV chief executive, Sunil Khanna, also agrees that, initially, most of its subscribers were from rural areas and smaller towns, and they tended to go for a basic package. "But they are a new base being added for advertisers," he points out.
So far, neither DTH operator is accepting advertising. DD, one source claims, is formulating a plan to offer advertising, but there is no definite date for when a rate-card will be developed. Khanna says Dish TV will start accepting advertising in April on a couple of channels. It has 900,000 subscribers now, he says - approaching the critical mass needed to woo marketers. More importantly, it has launched a movie-on-demand service and next month plans to offer interactive gaming, all of which are likely to boost its premium subscriber base (packages on Dish TV range in price from 68p to £4 per month).
The value-added services offer exciting options for advertisers, especially those trying to reach the elusive top end of the Indian market, media planners say. Lynn De Souza, the director of media services at Initiative Media, says: "TV has always been very mass and delivered a homogenous audience. Now, suddenly, you are getting a hugely differentiated audience on the other side."
Khanna points out that one key difference in the audience DTH delivers is that they are viewers who have actively opted to pay for the channels.
"Loyalty for those channels is much more than what you get with a cable-TV subscriber, who does not have the choice of which channels he receives."
THE NEIGHBOURHOOD CABLE-WALLA RULES
MSOs are able to decide which channels to offer, and most distribute a combination of pay, free-to-air and state-owned terrestrial channels.
Entertainment is the most critical category, but 24-hour news channels are gaining popularity.
Niche channels have struggled to gain distribution on their own and most are now part of a larger package. The MSOs determine which channels run on which frequency bands, so low-viewership channels tend to get the worse bands. MSOs have used this power to negotiate by taking channels off air when they have tried to increase subscription rates - particularly with sports channels with cricket telecast rights.
With monthly subscriptions so low, under-reporting of subscriber numbers is common and has led to conflict between broadcasters and the cable operators.
The industry has tried to introduce set-top boxes paid for by consumers, which let each household pick their own package and pay for it, but this system operates in only a few markets, one of the biggest being the southern city of Chennai.