The digitisation of TV distribution is yet to help the industry achieve its target of addressability and transparency in billing systems, among others, an ICRA report said.
Initiated in 2011, digitisation was expected to yield significant benefits to multi system operators (MSOs) and broadcasters.
As MSOs struggle with last-mile ‘addressability’ hurdles for their digitised customer base, the industry’s ability to deliver customised/value-added content remains restricted.
The report said the expected benefits of higher subscription revenues for MSOs and broadcasters are yet to be achieved. The end consumers are also yet to benefit from targeted subscription packages, which were expected to enhance user experience.
“Implementation challenges and slow progress in Phase I and Phase II markets have restricted monetisation for MSOs, and addressability continues to remain a concern in Phase I and Phase II markets due to slow progress in consumer application form (CAF) collections,” the report said.
It added that the growth of average revenue per user (ARPU) for MSOs remains constrained as collections continue to be largely on a per-subscriber basis and not on the basis of channel packages chosen.
Content costs ICRA said that margins, too, remain under pressure with an increase in content costs. These costs are up due to a change in the nature of deals with broadcasters for the digital subscriber base while ARPU growth in these areas is moderate.
The ICRA report concluded that in the near term, the ability of MSOs to improve realisations in Phase I and Phase II markets will largely be driven by improved subscriber accessibility and rollout of channel packages in these markets.
Additionally, the revenue growth will be supported by activation revenues from Phase III and IV markets, if the current deadlines are adhered to.