[Marxism] Rural India Goes Digital (WSJ)

Walter Lippmann walterlx at earthlink.net
Tue Oct 4 08:16:55 MDT 2005


The Wall Street Journal   	    	

October 3, 2005
	
Rural India Goes Digital
Multichannel Satellite TV
Pushes Into the Hinterland
To Tap Huge Growth Market
By JOHN LARKIN
Staff Reporter of THE WALL STREET JOURNAL
October 3, 2005; Page A15

MUMBAI -- A satellite-television boom in India is finally pushing
multichannel TV into its vast rural hinterland and opening a new
commercial battlefield in one of the world's biggest TV markets.

Places like Lodra, a village of two thousand people and a few hundred
mud huts, 700 kilometers north of here in Gujarat state, typify the
new phenomenon. At dusk, hundreds of people routinely gather around a
TV set propped on a wooden table in the village center. They will
watch until early morning, drawn by the 36 channels relayed from a
satellite to a receiving dish on the ground.

"The choice of channels puts us in a good mood after a hard day in
the fields," explains farmer Madhabhai B. Thakor in a phone
interview. Until last year, Mr. Thakor, like most rural Indians, he
had to make do with just two of India's earnest but insipid public
terrestrial channels. Now, he and his friends enjoy musicals in the
local Gujarati dialect and anything with lots of fight scenes.

Nearly three-quarters of India's 1.1 billion people live in villages
like Lodra, making it one of the world's least-urbanized countries.
While India's cable connections have tripled over the past decade to
61 million, rural households have missed out as cable companies see
no profit in stringing kilometers of wire to reach remote locations.

Enter digital television. Relying on signals transmitted from a
satellite to a receiving dish and from there to a set-top
signal-decoding box, rather than through cables, digital TV can
transmit anywhere, delivering more channels and better picture
quality.

"Digital TV is going to change the dynamics of the Indian TV
marketplace," says Vivek Couto of Media Partners Asia, a consultancy
in Hong Kong, who sees a looming commercial battle between digital
and cable companies.

Mr. Couto expects India to have 12 million paying subscribers to
digital TV by 2015 -- a huge jump from just 400,000 currently --
generating 45 billion rupees, or about $1 billion, in annual revenue.
Cable connections are expected to exceed 70 million by then, he says.
The spread of digital might occur at an even faster clip if India's
Congress Party-led coalition government endorses
broadcasting-industry proposals to raise the foreign
direct-investment ceiling in direct-to-home TV ventures from the
current 20% to at least 49%, the level permitted in the cable
industry.

There is pent-up demand for such service. India is the world's
third-largest television market with 108 million TV-equipped
households, a number that is growing by about nine million a year.
But that still leaves half of all Indian households without a
television set. Moreover, many existing TVs are old 14-inch
(35-centimeter) black-and-white models that can't receive some
satellite channels via cable, even if cable operators were willing to
hook up remote areas for new subscribers.

So, many villages have been left with only India's famously stodgy
state-owned broadcaster, Doordarshan, where the programming emphasis
is on informing the rural masses about farming techniques and health
issues.

"Satellite television can only rise in India, and rise very fast,"
says Atul Phadnis, an analyst at TAM India, a media research firm.
"Direct-to-home television will be a huge catalyst."

India's pay-TV industry is focused on cable operators and has nearly
$3 billion in annual revenue, according to a recent Price Waterhouse
Coopers study. But satellite can go where cable hasn't, which is into
the increasingly prosperous rural market.

Pradeep Kashyup, another rural-marketing guru and chief executive of
New Delhi-based consultancy Mart, says rural household income has
risen quickly along with India's economic expansion. Rural households
now earn nearly 60,000 rupees a year, still around half that earned
by urban households.

Mr. Kashyup contends that disposable income is actually higher in the
countryside than in the cities because of a lower cost of living.
Many villagers, he explains, own rather than rent their homes, while
education and health care are mostly free. "New TV services will
proliferate in the countryside very quickly," he predicts. "At the
press of a button, [advertisers] will be able to reach every corner
of the country."

Media companies, local and foreign, are rushing to cash in. Zee
Telefilms Ltd., India's biggest media company, says it is adding
3,000 new satellite subscribers a month to the direct-to-home service
it started last year called Dish TV. "Half of these are coming from
small towns," says Dish TV's chief executive, Sunil Khanna.

News Corp.'s Hong-Kong based Star TV, which already operates some of
India's hottest cable channels, will soon launch a direct satellite
service in a joint venture with Tata Sons Ltd., the holding company
of Tata Group, one of India's biggest industrial conglomerates.

Even Doordarshan, the public broadcaster, is joining the fray. It is
offering a satellite service with 30 free channels, including some
broadcast by southern India's Sun TV, which has agreed to join
Doordarshan's digital service. The public broadcaster requires its
customers to purchase only a set-top decoder and a small satellite
dish for 1,500 to 2,000 rupees. Doordarshan says its satellite
signals can be picked up by the basic decoders already on the market,
and it says more than four million decoders already have been sold to
people wanting to view its programs.

"No mass-market service can afford to ignore rural India today," says
Vikram Kaushik, chief executive of Space TV, the name of the new
Tata-Star TV joint venture. "There is a huge market waiting to be
tapped."

Kirk Johnson, a sociologist at the University of Guam who has studied
the impact of television in rural India, believes satellite TV will
change social and economic patterns as well, providing poorer
country-dwellers with information they can use to improve their
lives.

Indeed, Mr. Thakor, the Lodra farmer, has used information gleaned
from his village's new Doordarshan service to purchase a new type of
cattle feed that produces more milk from his cows and makes his
family an extra 45 rupees a day. He plans to use the extra cash to
finance a truck purchase under a promotion he also saw on TV.

"We didn't know about these things earlier, but they are good for
people like us," Mr. Thakor says.






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