How DTH will change
the media landscape in Pakistan
By
Sheeraz Adil
The
talk of the town these days in the global as well as the local media industry
is the long awaited DTH project in Pakistan. In this article I will try to make
it easier for a common man to understand what exactly this DTH is and what
might be the outcome of the DTH in Pakistan.
Following
are the few questions that are always in the mind of so many people and by the
time we will end this article most of the readers will understand the basic
concept and its significance for the people of Pakistan.
·
What is a DTH, How does it work
·
What is the technology behind this
·
What will DTH bring to the common viewer of
Pakistan
·
How will it impact the industry and the people
working in this industry
·
Why is it so lucrative for businessmen
·
What are the challenges
What is a DTH, How does it work
Basics of DTH
DTH
is the short form of Direct to Home. Direct to home means that the viewer can
view the channels in his house directly from the satellite downlink without any
middle man. So the basic question is how that work will. In the DTH setup the
satellite signal is directly received in individual houses through a small dish
antenna and then the signal is decoded through an STB- Set Top Box and is
viewable on the screens of our television sets.
The
below image is the simplest form of explanation of how DTH works.
Background and
the current status
As
we all know that PEMRA- Pakistan Electronic Media Regularity Authority is the
body responsible to facilitate and regulate the private electronic media in
Pakistan therefore the cable distribution and the DTH will come under PEMRA.
The DTH project has been under discussion in PEMRA since a few years now
however there wasn’t any significant progress on it. Those of you who don’t
know, the two rival media giants of Pakistan had expressed the interest of DTH
and there was some activity on this regard when the private media industry was
launched, however the project was scrapped till recently in September when the
PEMRA announced the expression of interest for the DTH license. The timelines
were very tight however there was a lot of interest shown by the investors in
this project. There were three licenses to be awarded to cater the total
population of Pakistan. The bidding was to be on December 7th with
the announcement of the licenses on the same date however it has been postponed
and is expected to get back on track in early this year.
Current
Distribution Methods
Below
are the few common distribution methods in Pakistan.
·
Terrestrial: The terrestrial TV is at the moment
analogue in Pakistan and only the state owned channels are being distributed
through this method. The digitization is in process however unless the private
channels are being distributed through the terrestrial, it will remain
unpopular.
·
Cable: Cable TV is by far the most popular
distribution method in Pakistan. There are about 1500 cable operators in
Pakistan covering more than 10 million subscribers. The cable operators have
their head-end in their premises where they downlink the channels and then
modulate it through the cable to each house hold. Most of the cable operators
are analogue at the moment therefore the number of channels at one point of
time are restricted and the major flaw in this system is the quality, the viewer’s get a very ordinary audio and
video quality irrespective of their fully featured fancy Television screens.
Another big challenge in this form of distribution whether it’s analogue or
digital is the physically making the cable available in households which is
very difficult in the remote areas. Some
of the cable operators have realized the future of media distribution in
Pakistan and they are planning to digitize their systems thus trying to
overcome the basic flaws of the analogue cable distribution.
·
IPTV: IPTV is actually advanced form of
distribution in developed countries however this has not been very popular due
to the infrastructure and technical issues. It required a significant internet
bandwidth in all houses which is yet a challenge in Pakistan.
·
Illegal and Pirated Distribution : This has now
become very popular in Pakistan, mainly the DTH distribution from the
neighboring country is also available in Pakistan and Government has started to
crack down the illegal DTH distribution, if this doesn’t end then it can be
very challenging for the DTH operators of Pakistan. There is an estimated
figure that there is more than a million illegal DTH distribution in Pakistan
which proofs that a very heavy amount is being earned through the illegal means.
Just to give you an idea if we assume that there are 2 million illegal
subscribers paying a monthly fees of 1000 Pakistan rupees (about 10 USD), then
the total revenue per year is about PKR 2000,000,000/20 Billion (USD 20,000,000/twenty million
dollars). This revenue can straight away come to Pakistan instead of
going abroad. Once the DTH licenses are given and with the serious crack down
from Government, we can imagine the business model of DTH and its huge revenue
generation.
Another
form is the pirated boxes being used to decode the channels without paying
anything significant, therefore Government needs to create awareness about this
illegal activity so that people stop doing this activity and find a legal way
to watch high quality content. At the moment since the DTH isn’t there in
Pakistan legally therefore if an individual has to watch good quality foreign
content, then he has no choice except to have any of the above two setups.
What is the technology behind this
main components
There are many different components required in the DTH
setup however we will discuss only the basics of main components below
Operator’s End
Head-end
The
head end is the setup in which the operator will have the facility of downlink
different channels and then combine them using the multiplexer before it goes
to the uplink. The downlink is done using dish antennas and the IRDs (commonly
known as Receivers, in extreme easy terminology- professional STBs) and then
the downlinked channels are encoded and multiplexed (combined) and finally
uplinked. The head-end is a part of Central Apparatus Room (CAR) which besides
the above mentioned activities can also be used for managing live programming,
IPTV, local play-out and servers for other components of the eco system.
Conditional access
This
is the most important part as the conditional access talks to all other major
components of the DTH setup. This is basically the encryption done on the
operators end and the channels are decrypted at the subscriber’s end. In the
lay man’s language the card that is physically inserted in the setup box required
to view the channels, the more sophisticated and latest method is the software
base encryption. The conditional access talks to the multiplexer, billing
system at the head-end and the setup box at the subscriber end, which is why it
is considered to be the core of the DTH setup. Which channels to be offered to
a particular subscriber, which channel to block, blocking the service due to
nonpayment many other activities like these are handled by the conditional
access systems.
Satellite Bandwidth
First
the DTH operator should select a satellite whose foot print (coverage) is
available in all the locations where the DTH is to be distributed. All the DTH
operators have to get the satellite bandwidth in order to uplink the channels. The
bandwidth is a recurring cost for the operator. The satellite bandwidth should
be enough so that the quality of the video is not compromised.
Play-out facility
Most
of the DTH operators will have their own facility of play out for their own
channels though it can be outsourced as well. The play out facility will be the
MCR- Master Control room for the operator’s own channels.
Billing System
The
billing system is also very important and it needs to be integrated well with the
conditional access and the other components. It helps the operator manage it
subscription base and offer flexibility to subscribers in making the payments
or subscribe to any particular event for a desired time period.
Subscriber’s end
STB and the Dish Antenna
STB
is the short form of Set Top Box , the STB and the antenna has to be installed
at the subscriber’s facility. The antenna is used to download the signals and
is connected to the set top box. The set top box is then connected to the TV
sets mainly through the HDMI port hence making it possible for the subscriber
to watch good quality transmission. The software running on the STB is known as
Middle ware, it is basically the user interface having the direct interaction
with the viewer.
What will DTH bring to the common viewer of
Pakistan
Quality
Most
of the Pakistani TV viewers have been watching the channels through the
analogue cable distribution platform which is way below than the normal quality
broadcasted in other parts of the world. There are various signal losses in the
analogue cable while reaching the households. Secondly the number of
connections through the same cable are increased by using a splitter thus the
signal strength becomes very weak before it reaches to your TV. With DTH, the
signal will be received directly at the household with an excellent quality.
That connection will be dedicated for the subscriber thus giving the best
output on the Television screens.
We
normally talk a lot about HD TVs and invest on buying the latest HD TV set for
our homes however they are useless with the analogue cable. At the moment there
are very few HD channels in Pakistan however once the DTH is launched then more
and more broadcasters/channels will upgrade their setups to HD thus giving the
same HD quality to the viewers as well.
Value added
features
I
will watch the drama when I want to watch rather than wait for it every day at
8 pm. Or what to do when your kid’s
favorite program comes when he is not at home. This problem can be solved with
the value added features provided by the DTH operator. This is called PVR-
Program video recording, you can save your favorite program on the hard drive
of setup box and watch it later as per your convenience.
Another
value added feature could be the VOD- video on demand. The operator will have a
pool of movies, dramas, shows etc and viewer can watch that content using the
remote of the set top box without getting the same from the nearby movie shop
or from a friend.
There
can be many other value added features and some of these are available in
Pakistan in the IPTV platform.
Reach
For
the cable and other distribution means you need to have a physical connection-
a cable from the office of your cable operator to your home, with the DTH you have
a wireless connection with the satellite thus the reach of the DTH is huge. The
distribution can be reached easily in remote areas or even in the new/under
deveoped areas which are in the outskirts of the cities.
How will it impact the industry and the people working in this industry
There will be no
limitation to the number of channels
With
the DTH setup, it will be technically possible to have more channels as there
is a limitation for the number of channels being distributed through the cable.
Theoretically hundreds of channels can be added in to the system thus giving
more and more choice to the viewers. Due to this limitation the regularity
authority is unable to give licenses to new channels however with the DTH this
problem will be solved and we may see some healthy competition in between the
broadcasters. This will also open new revenue opportunities for all the stake
holders including the regularity authority, channel owners and the people
working in the industry.
20 channels per operator- jobs creation
As per the license terms of the DTH, the DTH operator will
be allowed to have twenty channels of its own. This will be one of the key
success drivers for any DTH operator, the better content an operator would be
able to provide the more subscribers it will attract.
Now also imagine that if there are 3 DTH licenses awarded
then there will be an addition of 60 more channels , this will create
significant job opportunities for the people who are affiliated with the
technical, production, and so many other fields.
Accurate Ratings
The
ratings decides the commercial value of the TV channels, at the moment the
sample size is few hundreds or may be couple of thousands which is analyzed in
getting the TRPs of any channel. With the sophisticated set top boxes having an
IP connection, the popularity of the channels can be easily determined with
very less human intervention.
Marketing and
advertising industry will grow
Since
the number of channels with increase there will be more healthy competition in
the industry and there will be more and quality marketing and advertising spent
thus increasing the overall growth in this part of the industry.
Royalty to broadcasters
The
DTH will also open the opportunities for the broadcasters/TV channels to charge
royalty from the DTH operators as per their respective subscriber base like it
is done in international markets so a totally new revenue stream can take
place. For e.g. if the channel which is popular charges PKR 5 rupees from the
DTH operator per month and assuming that there are about 1 million DTH
customers in Pakistan, this will give an extra 5 million PKR per month to that particular TV channel.
Attraction for Telco and Banking sector
We
are talking about millions of transactions per month in the form of
subscription fees therefore it will open a new field for banking and Telco
industries, they would be interested in providing the payment platforms to the
DTH operators, particularly prepayment , scratch card, mobile and online
payment methods.
Why is it so lucrative for businessmen
Volume business
So far we have seen great interest in this business and it
has attracted very big groups of the country. Pakistan is a country of huge
population. According to estimated figures, there are about 10 to 12 million
cable subscribers in the country. The target in the first few years for the DTH
operators is to convert at least 10 -20 percent of the cable subscribers to the
DTH subscribers. Now if the DTH subscription is priced at 800 Pakistani Rupees,
and assuming there will be 15 percent market penetration of DTH (1.8 million),
the monthly revenue could be PKR 1440000000. (14.4 million USD) and multiply it be twelve to get even bigger
number for the annual revenue from this project.
Control over
distribution
Another
interest of the big groups participating in this project is to get control over
media distribution in Pakistan. Media is one of the important pillars of any
country and controlling and distributing the media is a very important element.
What are the challenges
So
far we have only seen the attraction in the DTH business but we must keep in
mind the difficulties and challenges that the operators have to face. I have
highlighted some key challenges to be taken care of by the operators.
Acquisition of
license and initial investment
The
first step as we all know is to get the license. The process of the bidding of
the license has been slightly delayed but by the time the readers will read
this article, the awarding of license date will be back on track. There are
many steps involved in getting the license , the most important of which is the
license fees which has to be a sealed bid envelope and the base price is PKR 20
crores (USD 2 million). It is expected that it might go beyond 10 million USD!
Solid plan to
convince the viewer to switch over
It
will not be easy to convince the common cable subscriber who is paying PKR 300
per month (USD 3) to pay PKR 800(estimated), plus the operator needs to come up
with a plan of subsidizing the initial cost of Dish antenna and setup box. In
addition to this the marketing plan has to be solid to be able to shift the
mindset of the cable viewer to the DTH. As discussed above the quality, value
added features and the content of the operator’s own channels will play a key
role in this regard.
High cost of
installation for the subscriber
We
touched base this in the above challenge, the initial cost would be around PKR
5000-7000 , no matter how good is your quality and what value will the operator
give to its subscriber , it will be most daunting task to convince the
subscriber to pay for this cost. The best solution is to subsidize this or
waive this cost to penetrate in to the market.
This
will also be a big challenge for the operator as this requires heavy
investment, a good solution to overcome this problem could be to adapt the good
distribution strategy with minimum direct investment from the DTH operator.
Multiple
connections
We
all have more than one TV set in our house, and it is really easy to connect
more TV sets from the cable provided by the cable operator. This will be a
challenge as each TV set will require a set top box to be connected to it. This
will again be an additional cost that needs to be taken care of by the DTH
operator.
Physical
installation and distribution
Though
we discussed that the reach would be easier due to the direct satellite
connectivity this means that a dish antenna and a setup box has to be installed
in each and every house. This will be also a big challenge as it will consume
significant resource it terms of time and money.
Technical
support
The DTH operator has to come up with an excellent customer
service setup. After paying double amount of the subscription the customer
would expect the problems to be solved immediately. To minimize this, the first
step for the operator would be to select the most reliable technical solution
so that the downtime can be curtailed. In addition to this a call center setup
and friendly on field staff needs to be hired by the DTH operator.
Conclusion
I
have tried my best to explain the concept of DTH and how will it impact the
media industry in Pakistan. For those who are affiliated with the cable
industry the cable will not finish with the launch of DTH in fact it will open
an opportunity for the cable operators to digitize their setups and compete
with DTH operators. All in all, we should realize that we are quite late in
launching the DTH as compared to other countries. There are challenges like any
other big projects however this will result in the betterment of the media
industry in Pakistan.
There
is a lot more to discuss about this project however the aim of this document
was to create awareness and give an idea of what is DTH and what is it going to
bring to the stake holders.
This
article is written by Sheeraz Adil who is currently working as the Sales
Director, SEA region at Irdeto. Any feedback or questions will be welcomed at sheerazadil@gmail.com
