The growth story in India’s media and entertainment business isn’t over, says a report by audit and consulting firm KPMG and industry lobby Federation of Indian Chambers of Commerce and Industry (FICCI). This was report after the financial crisis which pushed the world into an unprecedented recession. The DTH industry is at a nascent stage in India and will continue to grow with more innovation and awareness. Thus we will have a look at the Macro industry analysis.

Michael Porter’s competitive five forces model for the DTH industry:

A. Threat of Substitutes: - HIGH

1. IPTV: the various players are
Bharat Sanchar Nigam Limited (BSNL)
Reliance communications
Bharti Airtel
Mahanagar Telephone Nigam limited (MTNL)

2. Cable television: it has maximum number of connections of satellite television through cable in India. It has the widest and most intense penetration. It leads the connections by a huge distance from the other substitutes combine.

3. CAS: CAS has been rolled out in the 4 metros. This hasn’t had a good response though due to technical issues and infrastructure problems. The cost also has shot up for the consumer since he has to buy the set top box. Yet it is a competitor since the government is in favour of CAS

B. Bargaining Power of Suppliers: - LOW

The number of content providers is high and the number of Channels to air them is also fairly high. Since the number of options available to the distributors like DTH players and Cable television are high and the number of distributors is low, the bargaining power of the Suppliers is low. The cable network is run like mafia and hence difficult to break the intense clout they have in the corridors of power in Delhi, the policymakers.

C. Bargaining Power of Viewers: MEDIUM

Price sensitivity is high but since the distributors are still not able to differentiate their services differently in price, they focus more on product delivery and after sales service.
It’s important for any network to continue to keep the attention of their viewers with them since viewers are continuously exposed to different genres of entertainment to choose from; the bargaining powers of viewers become fairly high. Except for the switching cost, the viewer is not discouraged to try out different channels and programs to choose from thus making the power of Viewers medium.

D. Threat of New Entrants: RELATIVELY LOW

Due to comparatively high number of players, fairly strong loyalty by viewers and high brand differentiation between the players, any new entrant will have to find differing tastes of consumers create a well differentiated product which is under serviced by the current players and invest a lot of capital to enter the market, the threat of new entrants is relatively low.

E. Degree of Internal Rivalry: HIGH

With the market expecting to grow fairly strongly, strong brand identities, focused and well differentiated product offerings, high fixed costs, and high exit barriers, the degree of rivalry between players is expected to remain fairly high.