TATA SKY
ISKO LAGA DAALA TOH LIFE JINGALALA

Note: All information in the case has been garnered from sources in the public domain. This case
has been developed for purely academic purposes, and is not in any way the intended or actual
plan of Tata Sky Ltd.

Comstrat 2008                                   Visit us at www.draftfcbulkacomstrat.com  Page 0 

 
  

An overview of the Indian television market

India has about 133 million TV homes of which, Cable & Satellite (C&S) services are
present in 76 million (57%) of the homes.

• Non-cable TV homes which have DD

and free-to-air channels form 32%.

• DTH (Direct to home) services

comprise 11% of the total market with
14 million homes in all.

History of TV broadcasting in India

DD was launched way back in 1959 and was India’s only TV channel for long. In the
early 90’s, post liberalization the government allowed private and foreign
broadcasters to engage in limited operations in India. It was then that Cable &
Satellite operators became popular, thereby changing the way the average Indian
watched TV.

The cable TV industry remains largely unorganized with only about 30,000 C&S
operators registered with the TRAI (Telecom Regulatory Authority of India). Lack of
regulation gave the Cablewallas an opportunity to report lower number of
connections than what they actually served to save on the fee payable to the
broadcasters. Hence the much needed CAS (Conditional Access System) was
introduced by the Government of India in Chennai in 2003 to control the growth of
this unorganized sector that led to loss in revenues. Soon CAS was introduced in the
other metros - Delhi, Mumbai and Kolkata following the guidelines of TRAI.

2005- Advent of DTH in Indian Homes

In December 2004, DD was the first player to launch DTH services that had -
1. Digital clarity of sound and picture which was missing in C&S.
2. No hassles related to swapping of channels by cable operators or missing
channels.
3. Availability of Value Added Services (VAS) that cable operators did not offer.
DTH services soon had takers across small towns and cities, who were clearly
unhappy with the poor transmission and lack of service of the local cable operators.

Comstrat 2008                                   Visit us at www.draftfcbulkacomstrat.com  Page 1 

 
  

Future of DTH
DTH homes are estimated to increase to 30 million by 2012, from 14 million in 2008
according to Price Waterhouse Cooper.
Due to India’s varied geography and population distribution, C&S penetration in
remote and hilly areas is a problem. This creates a need-gap which the DTH
operators could easily tap.
Media industry experts feel that DTH is yet to see its full potential in terms of growth
and is poised to go the way of the mobile phone services and acquire scale.
To begin, DTH operators have started cutting prices to become more affordable.
Following the trend of mobiles which saw a boom when call rates dropped, incoming
calls became free and handsets became available at all-time-low price points.
The cost of acquiring a DTH connection has become half of what it used to be when
the service first began in India. Dish TV is now offering a set-top box for Rs 2,190.
Sun Direct’s set-top box costs Rs 2,000. “In the South we have also priced our
connection at Rs 2,000 to compete with Sun,” says Big TV’s Arun Kapoor
Some factors that will fuel the growth of DTH are:

• Government has made CAS (Conditional Access System) mandatory in parts

of four metros from Jan 2007.

• Digital technology used in DTH services makes viewing experience better to

the customer compared to old analog technology.

• DTH provide many value added services like Movies On Demand, quizzes for
kids, games, live telecast of rituals in famous temples etc. for the first time in
India. This could be the secret of success of the DTH players, showing high
growth rates.

• Predictions of a DTH boom are also based on the fact that more and more
people are buying television sets. India sells 12 to 14 million colour TVs in a
year. Of these, 4-5 million are in the 29 inch-plus category, which could be a
clear target for DTH services.

Key Issues faced by DTH in India

1. Low ARPUs (Average revenue Per User)
Heavy taxation (>50%) has lead to lower ARPUs (as low as Rs. 140/month) in the
industry. As competition increases, falling prices will put further pressure on ARPUs.
Sources of incremental revenue like movies on demand is minimal and hasn’t picked
up yet. Indians still prefer to watch a pirated movie on cable or wait for its premier on
TV channels.

Comstrat 2008                                   Visit us at www.draftfcbulkacomstrat.com  Page 2 

 
  

2. High cost of acquiring subscribers

While superior technology of DTH leads to a superior viewing experience, the high
price is a prohibiting factor. Therefore, to get the consumer hooked, companies
subsidize the cost of the set-top boxes (STBs) needed to access DTH telecasts,
which according to industry estimates is approx Rs. 4000 (including expenses for the
cable, STBs and others per connection)
The industry is at an early stage of growth and the primary focus of DTH operators is
acquiring customers. It is estimated that the major growth could be witnessed in
semi-urban areas and smaller towns and villages where cable services is not as
advanced as in the metros and large cities
Due to huge infrastructural costs, DTH players are currently undergoing losses.
According to industry estimates, only on achieving a subscriber base of 7-8 mn, will
the private operators break-even. However, with the advent of new competition,
current operators are reducing their prices to capture the market by offering huge
discounts thus increasing the pressure on ARPUs.

Key DTH players

The largest private player in the DTH
industry is Dish TV with a market share
of 24% and a subscriber base of 3.75
million followed by Tata Sky with a
subscriber base of 2.5 million customers
and a market share of 18%.

• DD Direct Plus
DD Direct Plus was launched in December 2004 by Doordarshan. It was India’s first
DTH service offering about 50 TV channels and 12 radio stations. DD DTH is a free
service and has already acquired a subscriber base of 7 million connections (Jan
2008).

• Dish TV
Dish TV is a venture by the Essel Group and was launched in March 2005. Dish TV
is India’s first private player in DTH industry with a presence in 19 states. It has a
gross subscriber base of 3.75 million (Aug 2008). It has a bouquet of over 185
channels to choose from. Recently Dish TV has launched an entry-level subscription
at Rs. 100 per month with the largest offering of 125 channels
Dish TV communication is directed towards creating dissonance about the cable
operators with their “Don’t be santusht” campaign featuring brand ambassador Shah
Rukh Khan.

Comstrat 2008                                   Visit us at www.draftfcbulkacomstrat.com  Page 3 

 
  

• Sun Direct
Sun Direct, a niche player in southern India as of now, is in the process of launching
its operations in north India as well. Launched in September 2007, it currently caters
to four states, viz. Tamil Nadu, Karnataka, Andhra Pradesh, and Kerala with 110
channels. Sun Direct has a subscriber base of 1 million (July 2008). Sun Direct has a
basic pack of Rs 75 monthly subscription which is the lowest price-point compared to
the other service providers. While Sun Direct is banking on competitive pricing, it
plans to leverage its ‘consumer experience’ in the future.

• Reliance Communication’s Big TV

Reliance Communication a more recent entrant in the DTH space has the brand
name ‘Big TV’. It has aggressively priced packages as low as Rs. 1490 with an
offering of 64 channels and a three month free subscription in addition to 20 video-
on-demand movie channels. To garner subscriber base, the company plans to tap
employees of Reliance ADAG, customers of Reliance Energy and Reliance PCO
owners with initial cost of Rs.1000. Plans are to acquire a market share of 40 % in its
first year of operations. As a promotional offer, BIG TV offers subscription free for
first 3 months
Big TV currently offers 202 channels – the maximum to be offered currently by any
service provider. BIG TV focuses on VAS and claims to have a next generation user
guide which is indexed. Also, has a facility of watching 12 PinP of the same genre for
consumer’s convenience.

To cash in on the growing awareness of the service, DTH companies are spreading
distribution networks far and wide. Big TV who already has a mobile service hopes to
leverage its distribution network, apart from putting its own distribution footprint in
place. e.g. Big TV is available at 88,000 outlets, including 240 Reliance World and
2,000 Reliance Mobile stores across 5,800 towns

• Bharti-Airtel
The recent and much talked about player in the market is Bharti- Airtel. The leading
telecom operator, which already has infrastructure for telecom and internet in place,
is set to launch its DTH services under the brand name ‘Airtel’. A teaser campaign
‘See you at home’ WAS followed up by a multi-starrer campaign with celebrities like
Saif Ali Khan and Kareena, Vidya Balan and Madhavan and Indian cricketers
Gautam Gambhir etc.
Airtel is expected to be an aggressive spender given their objective to establish
‘Airtel’ as a dominant brand in the DTH category and we will take all the steps
necessary to ensure that the product and the brand get adequate visibility and
exposure in the market

Comstrat 2008                                   Visit us at www.draftfcbulkacomstrat.com  Page 4 

 
  

Other new entrants

The coming months are set to see more new players making their foray into DTH. Of
them is Videocon’s ‘D2H’ who claims to launch their services by end of 2008.

• Videocon ‘D2H’

Videocon – the big Indian consumer durable player plans to enter the DTH market by
mid September 2008 through its media arm Bharat Business Channel (BBCL).
Advantage over other players is that Videocon already makes analog set top box
hence they are likely to manufacture Set Top Box for their DTH service as well.
This ends the broad overview of the category and its key players. We now move on
to Tata Sky and the key deliverables on the case

Tata Sky
Tata Sky was incorporated in 2004. Tata Sky is a JV between the Tata Group and
STAR. TATA is one of India's largest and most respected business conglomerates
and the SKY brand, owned by the UK-based British Sky Broadcasting Group has
over 20 years of experience in satellite broadcasting. It launched its services pan-
India in August 2006. Within a short span of time it garnered a subscriber base of
nearly 2.5 million (Aug 2008). It has over 147 channels to choose from. Tata Sky has
launched an entry-level subscription plan called ‘Super Hit Pack’ at Rs. 99 per month
with a bouquet of 53 channels.
Tata Sky recently launched Tata Sky Plus which uses the personal video recording
(PVR) technology that allow consumers to record live. It is available at a price of Rs.
8999/-
Tata Sky though a late entrant created an aura of first mover in the minds of the
customers, as it was the first DTH service to be advertised in India. In the year 2007,
Hrithik Roshan promoted Tata Sky with the tag line “Isko laga dala toh life jinga la
la”. Recently the company has launched an ad with Aamir Khan who stands for
exclusivity and perfection. The campaign was created to establish the pedigree of
Tata Sky.
A closer look at Tata Sky

• Strongly innovative product offerings – Tata Sky has taken the onus on itself to
invest in more interactive services to differentiate itself from others. It was the
first DTH company in the world to offer its subscribers interactive VAS under
the umbrella – Actve.

• Kick started the category advertising - Although it was the 3rd player to enter
the market it sought to create consumer education about the category with

Comstrat 2008                                   Visit us at www.draftfcbulkacomstrat.com  Page 5 

 
  

focused advertising. Initial campaigns featured Hrithik Roshan who promoted

multi-angle viewing of the World Cup.

• Focus on heritage – Tata Sky latest campaign features superstar Aamir Khan.
The focus of the campaign was to establish the pedigree of Tata Sky and
inform potential customers about Sky-the leading British Broadcasting

• Low cost packages to increase penetration - Tata Sky has recently introduced
a Rs 99-a-month low-value pack for 53 channels to increase penetration of
Tata Sky in smaller towns of the country.

Tata Sky has also gone a step further and introduced an electronic programme
guide (EPG) in Hindi especially for people in small towns who are more
comfortable with Hindi.

Comstrat 2008                                   Visit us at www.draftfcbulkacomstrat.com  Page 6 

 
  

Key deliverables:
1) Tata Sky hopes to have about eight million connections by 2012. How should
Tata Sky increase its customer base faster given that DTH is a virtually
homogenous product with very little content differentiation possible. The only
differentiation is the picture quality. Tata Sky is similar to cable however they
charge a premium because of taxes and also because the cable operators
under declare subscribers. (Over coming barriers for growth and becoming a
leader)
2) The 3 anchors for growth that can be explored are
a. Superior Picture quality
Unlike analog cable, Tata Sky subscribers can view TV through superior
digital DVD quality picture and CD quality sound
b. Wide array of interactive applications
In order to empower the Indian viewer with choice, control and
convenience Tata Sky has a wide array of programming choices and
interactive services like Actve Cooking, Actve Wizkids, Actve Learning,
Actve Stories, Actve Sports, Actve Games, Actve Newsroom, Actve STAR
News, Actve Astrology, Actve Darshan and Actve Doordarshan that can
be ordered with any of the basic packages. The customer is not going to
stay forever with the package he subscribed to initially, he should be
encouraged to subscribe to other packages and value added services
quickly to increase revenues. These applications are expected to do well
given that in India TV viewing in India is done as a family.
c. Unparalleled customer service
Tata Sky has established an extensive customer service network across
the country. It has engaged a field force of approximately 3000 service
engineers who are complemented by high-end 24x7 call centres, manned
by multi-lingual customer service associates, trained to solve all customer
problems.

Tata Sky takes direct responsibility for installing and servicing the
hardware for periodic problems that exist at every subscriber's home,
thereby ensuring the highest levels of customer service.

Tata Sky retails its hardware and prepaid recharge vouchers through
popular consumer electronic stores to enhance customer convenience

Given the market dynamics and competitive scenario, how should Tata Sky drive
communication. What is the single minded proposition that they should adopt to
meet their business objective of accelerating subscriber acquisition?

Comstrat 2008                                   Visit us at www.draftfcbulkacomstrat.com  Page 7 

 
  

Annexure
1.

2. Pricing
The prices of the key brands in the category are as follows:

DD Direct Plus Dish TV Tata Sky (South Jumbo Pack)

Price per month Nil 325 310

(Rs)

No. of channels 33 119 128

Channels 21 DD channels, Hindi GEC, English Regional channels, Hindi movie

available 12 private GEC, News- Hindi, channels, Hindi GEC, News
channels including English and business, channels Hindi and Business,
Hindi news infotainment channels, kids channel, English GEC,
channels, music lifestyle channels, music music channels, lifestyle
channels and channels, Hindi and channels, infotainment
Hindi GEC English movie channels, channels, English movie
sports channels, kids channels, DD channels
channels, regional
channel, DD channels

Tata Sky: Installation charges Rs.1000 and set top box Rs. 1499 extra
Dish TV is giving away set top box free along with its starter packs(*6)
There is a onetime installation fees of Rs. 3000 for subscription of DD Direct
Plus

Comstrat 2008                                   Visit us at www.draftfcbulkacomstrat.com  Page 8 

 
  

3. Tata Sky
South Starter South Value Super Saver South Jumbo
Super Hit Pack Family Pack
Pack pack Pack Pack

Price per month 99 125 200 260 260 310

(Rs)

No. of channels 53 70 92 104 113 128

Regional Regional Hindi GEC, STARTER PACK FAMILY PACK VALUE PACK
channels. Kids channels music channels,
channels, DD Hindi news + + +
channels, channels,
English GEC, English GEC, Hindi movie
lifestyle business news
music channels, music channels, channels, Hindi
channels, Hindi channel,
kids channels, kids channels, GEC, News
Channels news channels, infotainment
lifestyle lifestyle channels Hindi
available Hindi GEC, channel and
channels, channels, and Business
Marathi news regional channels
infotainment infotainment and kids channel
channel
channels, news channels, All
channels Hindi news channels,
and English, English movie
English movie channels
channels

4. Dish TV
Dish Freedom
Packs Dish Maxi Plus Dish Maxi offer DishWelcome Dish Freedom
plus

Price per month

325 300 160 262 100
(Rs.)

No. of channels 119 115 68 87 62

Hindi GEC, English Hindi GEC, English Hindi GEC, Hindi Hindi GEC, English Hindi news
GEC, News- Hindi, GEC, News- Hindi, news channels, GEC, all the types channels, Hindi
English and English and lifestyle channels, of news channels, GEC, lifestyle
business, business, music channel, lifestyle channel, channel, regional
infotainment infotainment religious channel, music channel, channel, religious
channels, lifestyle channels, lifestyle regional channels, regional channel, channels
channels, music channels, music Hindi movie sports channel,
Channels available
channels, Hindi and channels, Hindi and channel and sport infotainment
English movie English movie channels channel, and kids
channels, sports channels, sports
channels, kids channels, kids
channels, regional channels, regional
channel, DD channel, DD
channels Channels

Comstrat 2008                                   Visit us at www.draftfcbulkacomstrat.com  Page 9 

 
  

5. Starter packs(Dish TV):

Payment on
Dish Maxi offer Dish Freedom plus
installation (Rs.)

2490* 6 months + 45 movies worth 2490 -

12 months + 72movies worth

4290 -
4290

*Rs.200 installation and activation extra 
6. DD Direct Plus

One time Fees*(Rs.) 3000

No. of channels 33

No. of radio channels 12

7. Sun Direct:
Rs.999 for 10months subscription for North and 12 month subscription for
south (*installation & activation charges extra)

South Pack(Tamil
Package North Basic Pack Basic pack)

Monthly Fees 99 83.25

No. of channels 108 112

No. of radio channels 23 23

Channels Available Hindi GEC, English Regional channels,

& Hindi News English movie
channels, English channels, music
GECs, English channels, Hindi
movie channels, GECs, all news
Music channels, channels, DD
religious channels, channels
regional channels,
DD channels

*Installation charges Rs.1000 

All data and prices have been taken from public sources and updated as
of October 2008, unless indicated otherwise

Comstrat 2008                                   Visit us at www.draftfcbulkacomstrat.com  Page 10 

 
  

Rules and Regulations

1. Participating teams should contain three members.

2. A synopsis on the case should be submitted either through email to
comstrat@draftfcbulka.com or by post to Draftfcb Ulka Advertising, 4th floor, Nirmal,
Nariman Point, Mumbai 400021. The last date for receipt of the synopsis is 24th November,
2008
3. The synopsis should not exceed 15 pages with a minimum font size of 10 and single
line spacing.
4. A shortlist of six teams shall be arrived at on the basis of synopsis received. The
shortlist shall be declared on 1st December and posted on the website
www.draftfcbulkacomstrat.com and communicated to K. J. Somaiya Institute of
Management Studies and Research.
5. These six teams have to make a presentation to a panel of judges on 13th December 2008
in Mumbai.

Comstrat 2008                                   Visit us at www.draftfcbulkacomstrat.com  Page 11