In my previous post, I highlighted the unique factors specific to India for Pay-TV ARPU (Average Revenue Per User). The forecast for the Indian pay-TV ARPU is expected to increase by 10% for DTH and 12% for Cable. And so, the focus for a DTH operator in India has shifted to finding new ways to increase ARPU from its subscriber base. In this post, I look at economic demographic specific segmentation that operators need to consider, to increase ARPU.
ARPU in India - Segmentation for Demographic
Content is King
The old saying that “Content is King” still holds true. The main driver for content in pay-TV is sports for all demographics. We can see this exemplified in the 5-year IPL contract for media rights that Star India obtained for 2.55 Billion USD. Having the right mix of base packages, add-on packages and a-la-carte for all demographics, which allow options for inclusion of key sport programming, can help optimize ARPU.
Focusing on technology can also help increase ARPU. For the Indian TV market, the focus is moving towards High Definition. However, with the broad range of economic demographics in India, operators must cater for Standard as well as High Definition. Ensuring that there is attractive content available that caters for all demographics and technologies is a key element to maintaining and increasing customers. Today, the uptake of 4K in India is minimal. But as more 4K content becomes available and households start purchasing 4K devices, this will become more common, and ARPU will rise. This especially holds true for the higher economic demographics.
Add-on services will most likely be the key driver for higher ARPU. TV-related services such as multi-room, VOD and OTT are common in many countries around the world. With the growth of the middle class in India we are seeing an uptake of this trend as well. Other services, specifically digital subscriptions, are a promising way to also increase ARPU. Foreign digital service providers often rely on established payment mechanisms such as credit cards and banks, these payment mechanisms are not as common in India. Therefore, the DTH and Cable operators are particularly well-positioned for partnerships with digital providers such as Netflix, Spotify and smart home service companies. These companies have a lot to offer the market and are targeting India specifically as they see growth in the economy.
In all markets, offering superior customer service is crucial to reducing churn and increasing ARPU. India is no different. Today’s higher-end customers demand an omni-channel customer experience and payment and installation options. Creating a positive brand experience through all touchpoints can help with customer loyalty. This includes accurate billing. Providing incentives that encourage customers to sign-up for longer periods is highly recommended. This coupled with implementing initiatives that sees the customers pay early or on time will help grow overall revenue. In the next post, I share an infographic which details how India-specific demographics are most affected by all these ARPU increasing initiatives.
By Coen Vanbaar – With 20+ years’ experience in the Pay-TV and Billing industry, Coen is our in-house expert and is responsible for the product management of ICX– Hansen’s Pay-TV Billing and customer care software product.