Business - Broadcasters, DTH cos, film producers bet on pay-per-view

Sarah Jacob

BANGALORE: With direct-to-home (DTH) satellite television growing in popularity, film producers, broadcasters and DTH service providers see
pay-per-view (PPV) buying of movies emerging as a significant contributor to revenues.

Indian television viewers are just beginning to get the option of PPV, which allows them to view movies or individual programmes for a fee. Movies are seen as especially well-suited for the pay-TV model, allowing subscribers the option of viewing in the privacy and comfort of home at a time of their choice.

“Mobile content, gaming and PPV will become key revenue streams for film-makers. We expect PPV to gain market share rapidly in the next few years,” says a spokesperson for DTH operator BIG TV.

DTH operators update the menu of movies on offer every fortnight and subscribers pay between Rs 25 and Rs 80, depending on whether it is a monthly rental or an a la carte offering.

Consulting and audit firm KPMG puts number of DTH subscribers in India at 7-8 million and estimates that the subscriber base will grow to 25-27 million by 2012. The major providers of PPV include the Essel Group-owned Dish TV, Tata Sky, a joint venture between the Tata group and Star TV, Reliance Communications’ BIG TV and Bharti Airtel’s Digital TV.

With no model in place, PPV rights for movies are sold for a fixed duration and on a non-exclusive basis, depending on the star cast, time of release and box-office ratings. “We generally buy satellite rights in a bundle, including conventional, DTH and internet protocol TV. PPV rights are first sold to DTH operators to give them the advantage of airing it in advance. While Hindi or regional films can be viewed through other means, PPV for international films is bound to grow faster due to exclusivity,” says UTV Global Broadcasting (the broadcast arm of media house UTV Software) executive director Shantanu Aditya.

Indian Film Company CEO Sandeep Bhargava says he will ‘wait-and-watch’ because PPV is just an emerging platform for film revenues. “We have not used PPV for our films yet as it is based on a revenue-sharing agreement and there is no minimum guarantee in place.”

KPMG research head for the information, communications and entertainment Rajesh Jain agrees that it’s still early days, but PPV is a step forward to ‘increase stickiness’ for DTH services. He says the film industry earns nearly all its revenue from theatrical exhibitions and home video sales, with cinema screenings contributing nearly three-fourth to revenue. “Operators are still testing the waters in terms of viewer demand, just as producers are evaluating the market dynamics. As the subscriber base develops, film producers will be able to quote higher rates,” Mr Jain observes.