Opportunities in offing for TV media companies? - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Opportunities in offing for TV media companies?

Nov 24, 2011

Analogue cable will soon become history in India. The government has approved full digitization of cable services. Although the implementation will be in a phased manner, by 2012, all metro cities will be completely digitized. This will be followed by the cities with a population of more than 1 m which will be covered by March 2013. By September 2014 all urban areas would be covered and by the end of year 2014, the entire country will be fully digitized. This digitization will bring in a whole new dynamic environment for companies in the TV media space.

Analogue cable will have to be completely abandoned. Thus, there will be three options available for digitization. 1. Digital cable 2. Direct to Home services 3. Internet Protocol Television (IPTV).

Digital Cable- Digital cable services are provided by cable operators themselves using set top boxes. The companies that provide these services are segmented into the Local Cable Operators and Multi System Operators. Local cable operators normally operate independently. Multi system operators like Hathway Cable and Den Networks are associated with a number of LCOs.

Dish TV is the biggest DTH provider in India. Other players like Airtel, Videocon, Sun TV, Tata Sky and Reliance Big TV (Reliance Communications) are also vying for increasing pie of the direct to home segment.

IPTV is the least preferred form of digitization. MTNL provides IPTV services in India.

Although the biggest beneficiary of digitization among these would most likely be the DTH companies and MSOs, all the companies that provide digital services are likely to be positively impacted. Their revenues are expected to go up over the next couple of years till India is completely digitized.

Win-win for all

Digitization will not only benefit the distributors but the industry at large. Cable industry in India is plagued with the problems of under reporting of subscription numbers. The local cable operators more often than not under report actual subscription numbers to broadcasters who end up losing revenue because of this. With digitization, things will become transparent and the broadcasters (Zee and Sun TV are the broadcasters) will receive actual subscription revenues from cable operators. The cable service providers will also be able to provide other value added services like movie on demand, internet, high definition channels etc. It will also help in organizing the existing fragmented industry. This would also facilitate investment into the TV media space.

Why are Local Cable Operators (LCOs) opposing?

A few LCOs are opposing this stating that it would imply a financial burden for them. Digitization would require transmitters, encoders, decoders etc which require huge investments. As per the local operators, most of these equipments will have to be imported as these are not available in India. Also, the LCOs had near monopoly in their regions and with digitization they fear loss of revenues.

To conclude

While there is no denying the fact that the growth opportunities for media companies in the DTH space are immense, the returns will not be immediate. Further competition is intense and digitization requires huge investment. Thus, one should look at investing in companies that have strong balance sheets and can manage to finance their growth needs.


Equitymaster requests your view! Post a comment on "Opportunities in offing for TV media companies?". Click here!

  

More Views on News

ZEE ENTERTAINMENT Announces Quarterly Results (1QFY21); Net Profit Down 94.5% (Quarterly Result Update)

Sep 1, 2020 | Updated on Sep 1, 2020

For the quarter ended June 2020, ZEE ENTERTAINMENT has posted a net profit of Rs 292 m (down 94.5% YoY). Sales on the other hand came in at Rs 13 bn (down 34.7% YoY). Read on for a complete analysis of ZEE ENTERTAINMENT's quarterly results.

ZEE ENTERTAINMENT Announces Quarterly Results (3QFY20); Net Profit Down 38.0% (Quarterly Result Update)

Jan 24, 2020 | Updated on Jan 24, 2020

For the quarter ended December 2019, ZEE ENTERTAINMENT has posted a net profit of Rs 3 bn (down 38.0% YoY). Sales on the other hand came in at Rs 20 bn (down 5.5% YoY). Read on for a complete analysis of ZEE ENTERTAINMENT's quarterly results.

ZEE ENTERTAINMENT 2018-19 Annual Report Analysis (Annual Result Update)

Sep 9, 2019 | Updated on Sep 9, 2019

Here's an analysis of the annual report of ZEE ENTERTAINMENT for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of ZEE ENTERTAINMENT. Also includes updates on the valuation of ZEE ENTERTAINMENT.

More Views on News

Most Popular

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

My Top Stock to Buy in this Market Selloff (Profit Hunter)

Sep 22, 2020

The recent correction offers a great opportunity to buy this high conviction smallcap stock.

Can the Nifty Fall to 10,200? (Fast Profits Daily)

Sep 24, 2020

The Nifty has reached an important support level today. If it breaks then we could see further downside.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

ZEE ENTERTAINMENT SHARE PRICE


Sep 30, 2020 10:59 AM

TRACK ZEE ENTERTAINMENT

  • Track your investment in ZEE ENTERTAINMENT with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

MORE ON ZEE ENTERTAINMENT

ZEE ENTERTAINMENT 5-YR ANALYSIS

COMPARE ZEE ENTERTAINMENT WITH

MARKET STATS