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19 December 2019

Tata Sky pushes hybrid set top into India’s crowded market

Tata Sky looks set to release yet another hybrid set top into India’s crowded DTH market, around its new Binge platform – a combination of third party OTT content and Tata Sky exclusives. It means Android TV Operator Tier now has a clean sweep of most major set tops in India, having already infiltrated Dish TV, Jio Fiber and Airtel products.

 

If you thought the Indian video scene was already fiery, the market is about to get even more interesting as a major OTT video service provider has this week been forced into a retreat (see separate story in this issue).

 

Streaming is the key selling point of Tata Sky’s new hardware along with 4K resolution, but these could both be tainted by the lack of fixed line infrastructure in India, particularly fiber.

 

Although unconfirmed by Tata Sky, pictures of the Binge+ set top have already circulated online, and extensive specs have been reported. If true, this hybrid set top continues a trend of Indian operators bundling OTT and DTH services – one set to continue for at least a few more years.

 

Like many set tops in India, it looks like the Tata Sky Binge+ device will be powered by Android TV Operator Tier – running on Android 9.0 Pie which supports operator tier custom launchers. One of the rules regarding operator tier at Google is that operators can brand the device as their own but cannot disable the ability for other apps to run, so Tata Sky must cohabit with local video rivals like Voot and ALTBalaji.

 

The yet-to-launch Binge+ set top runs on a Broadcom BCM72604 SoC and a Broadcom VideoCore V HW GPU dual processor. Broadcom won a contract at Tata Sky in 2014 for its first generation UHD set tops in India, working with Technicolor using the Broadcom BCM7252 SoC, which also has transcoding capabilities.

 

On top of DTH channels, the set top incorporates the Binge OTT aggregator platform, previously only accessible to Tata Sky customers through an Amazon FireTV Stick. A monthly subscription fee gives users unlimited access to all OTT apps on the Binge platform, including Hotstar, ZEE5, Hungama Play and Eros Now. Purchase of the new set top will come with a one-month free subscription to Binge.

 

The set top is a hybrid experience, with OTT content accessed by any broadband connection including using a 4G phone as a WiFi hotspot, while live TV can be accessed via a cable connected to the satellite dish. Fixed network penetration in India is just 6%, while 4G penetration is estimated to be 80%.

 

While this is not massively expensive in India because mobile data is so cheap there (for example, Jio offers mobile customers 84GB a month for just under $5), it may prove an issue with consumer experience. Consumers will struggle to get pristine quality streaming in 4K on a large TV over cellular connections in densely populated areas, particularly at peak times.

 

The Tata Sky Binge+ device will be manufactured by France’s Technicolor, a long-term provider to Tata Sky, although it has also worked with other set top makers such as Thomson, Humax, Huawei and Arris. This is not Tata Sky’s first 4K set top. The Tata Sky Ultra HD 4K set-top retails at around $90, but it sacrificed many advanced features. The set top has no VoD or Karaoke services (which are hugely popular across Asia Pacific), and unlike the Tata Sky+ HD Digital, does not accommodate a 500GB hard disk.

 

DTH services are the easiest way to distribute TV services across India, bucking many forecast trends of DTH decline in more advanced nations where broadband has high density – with the country housing the world’s largest DTH market, even by revenues. However, this is set to tail off by about 2024, when Tata Sky is forecast to register its first small decline in sales.

 

At present, Tata Sky holds 20% of the DTH market in India, with 18 million active subscribers.

 

It’s worth noting that India’s DTH market was shaken up by Jio Fiber’s arrival in September this year. The latest initiative from Reliance Jio, Jio Fiber is an aggregator model – collecting content from multiple platforms which is purchased as part of tiered fiber broadband packages.

DTH operators in India have seen their subscriber numbers flatline since 2017, staying at around 60 million in 2018.

 

Meanwhile, OTT is set for rapid growth, with Indians already spending an average of 70 minutes a day on such services. The country is predicted to have 500 million online video subscribers by 2023, which would make it the second largest market after China. It will be interesting to see if India’s cellular networks will be able to deliver that much video, without widescale failures.

 

Ultimately, if Tata Sky wants to remain a serious competitor in India’s DTH market, another merger may be necessary. In March 2018, the merger of Indian operators Dish TV and Videocon d2h completed, creating a new DTH market leader of some 29 million homes, giving it around 41% plus market share. If Tata Sky or Sun Direct want to achieve the same type of scale, they too may have to merge.