"Superficial" view of Pay TV: Industry leaders counter decline reports

New Delhi: Pay TV, as per the latest FICCI-EY report, was the primary driver of decline in the subscription revenues. The reduction in 6 million Pay TV homes triggered a 3% slump in subscriptions, the report mentioned. 

Does that mean that Pay TV has a gloomy future or does it still have the potential to prosper?

To decode and douse this dilemma, Nachiket Pantvaidya, CEO, Sony Entertainment Talent Ventures India, Arjun Nohwar, SVP & Country GM - India & South Asia, Warner Bros. Discovery, and Sumanta Bose, Head of Cluster, Entertainment (Star Plus and Bharat, Bengali, Marathi and Gujarati), JioStar, indulged in a discerning discourse. 

The fireside chat, moderated by senior journalist Rajrishi Singhal, started with a notion that was set by the FICCI-EY report: Pay TV is declining. The notion, however, did not have many takers, as the speakers brought forth a very positive outlook towards the future of linear Pay TV.

Data speaks volumes 

Stirring the pot and kickstarting the conversation, Nohwar said, “The lens and measurement tools we use significantly shape our understanding of Pay TV's success. Often, we rely solely on direct household subscriptions, which paints an incomplete picture.” Nohwar argued that the industry has a faulty model to gauge the success of Pay TV. 

Adding to the conversation, Bose delivered a few data points that reflected the current state of Pay TV. Bose stated that Pay TV, presently, has scale and impact. “800 million in terms of coverage and 769 billion minutes of consumption; I think we should pause and reflect on these two data points.” 

Bose highlighted that the innovation in live sports has kept the pay TV ratings buoyant. He also used Anupama, the daily soap, to support his argument. According to Bose, the show, at its peak, was being viewed by 7.5 crore people on a monthly basis. “I think it is a misnomer to say that maybe Pay TV is not going well,” Bose asserted. 

Staying parallel with Bose’s thoughts, Pantvaidya also cited a few data points. “74% of content consumption is happening only on digital and television. Exclusive digital consumption is just about 10%,” Pantvaidya submitted. He also pointed out that a modest ARPU (Average Revenue Per User) of Rs 200 would mean a thousand crore addition to the GDP every year. As per the FICCI-EY report, the ARPU stood at Rs 281 (gross of taxes). 

Content is the solution

According to Panvaidya, the real solution to the supposed decline is hidden in the very content that runs through the linear mediums. Etching the idea through a statement, the Sony executive said, “You cannot blame a theatre owner if there are not enough films coming out.” 

The real crisis of the moment is that the industry is not coming up with something innovative in content, Pantvaidya advocated. Complementing Paintvaidya’s thought, Star’s Bose said, “We keep coming back to content. I think the right question should be, ‘Are we innovating enough?’” 

Contributing his two pennies, Nohwar of Warner Bros. Discovery argued that a lot of the content creation budget is going to the OTT platforms. While this is a prevalent process, the driver of EBITDA and value is still the Pay TV business that the companies operate, Nohwar said. Therefore, the industry needs to balance the allocation of budgets.  

Calling the general understanding of Pay TV “superficial,” Pantvaidya preferred prioritising engagement over anything else. “We have good days and bad days but the fundamentals of engagement and distribution are strong and solid,” Sony’s executive stated. “Our understanding of Pay TV is superficial. It's thriving beyond our predictions. Part of that superficiality stems from a lack of data” he said. 

Taking the discussion forward, Nohwar highlighted, “The means of consumption are evolving, but pay TV content creation remains strong. Consumption minutes aren't decreasing. When reports indicate pay TV's decline, they're often referring to linear television channel distribution, a narrow definition. 

We need a deeper analysis to understand the true value of our content investments and where monetisation is occurring, which may be shifting to digital media. Increased reporting transparency is crucial. The fact that much digital content originates from pay television networks is significant, and it may signal a resurgence of pay television.”

Culminating the conversation, Bose expressed his positive outlook towards Pay TV. He supported his outlook with the fact that going forward, a large part of the country, 48 million homes, that are free TV users are going to gravitate towards Pay TV. Nohwar added that Pay TV will continue to be an anchor in terms of content consumption and will be supplemented with other types of content. 

“The future of Pay TV is extremely bright because it is measurable by a neutral third-party source. Secondly, the addressability of Pay TV to a mass audience in India will support the incline of Pay TV going forward,” said Pantvaidya. 

The discussion hovered and landed on the fact that the future of Pay TV depends on its ability to adapt. While the industry faces significant challenges, providers that embrace flexibility, invest in exclusive content, and leverage technology to improve user experience may still find a place in the evolving media landscape. 

The question remains whether these adaptations will be enough to counteract the rapid changes in consumer behaviour and technological disruption.