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Dish TV India Limited Investor Presentation 2
Disclaimer Some of the statements made in this presentation are forward-looking statements and are based on the current beliefs, assumptions, expectations, estimates, objectives and projections of the directors and management of Dish TV India Limited about its business and the industry and markets in which it operates. These forward-looking statements include, without limitation, statements relating to revenues and earnings. The words “believe”, “anticipate”, “expect”, “estimate", "intend”, “project” and similar expressions are also intended to identify forward looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the Company and are difficult to predict. Consequently, actual results could differ materially from those expressed or forecast in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, changes in the regulatory environment and other business and operational risks. Dish TV India Limited does not undertake to update these forward-looking statements to reflect events or circumstances that may arise after publication. 3
The Indian TV Industry TV Industry Size (INR Bn.) INR 771 INR 771 Bn. Bn. 2017 2017 2021 2021 2020P 821 920 2020 2020 TV subscription revenues Tota tal households (in Mn Mn.) .) 284 284 314 314 CAGR of 8% 2018 702 761 Tota tal TV V house seholds s (in Mn Mn.) .) 181 181 211 211 (2017-2020P) 67% 67% TV penetration (of total HH’s) 64% 64% 2017 646 665 C&S Penetration (of TV HH’s) 83% 83% 84% 84% Subscription revenues Advertising revenues Broadcas asting Ind ndustry Mark arket shar share - Dis Distribution Ind ndustry Analog Multiple broadcasters, having 300 Digital Cable Cable pay channels, 577 FTA channels, 28% 39% producing content in more than 15 languages DTH 33% TV Indus Industry ry to o gai gain fr from increasin ing TV and and Pay ay -TV pe penetration 4 Source: TV industry size: FICCI-KPMG 2017; TV Households and Distribution Industry: MPA Report 2017
What does TV mean to India? Avg. daily time spent per day with major media by an adult Digital Print 5% 31% Daily Da ly Tim ime 7% Radio spent t per r in indivi ividual 03:4 :44:28 (hh:mm:ss) Da Daily ly tu tune e in in on on TV: 57% 566 Mn 566 Mn. . In Individ iduals TV TV con ontin inues s to o re remain the mos ost t popu popular for orm of of entertainment acr across all all age age grou groups in n the cou ountry ry 5 Source: Daily Time spent and Daily tune in on TV: BARC; Daily time spent per day with major media: eMarketer
.. Collective family entertainment Percentage of single TV households 98% 98% 97% 97% 95% 95% All India Urban Rural 77% large and affluent joint families have single TV’s, implying co -viewing as as a a con onsumption pa pattern 6 Source: Percentage of single TV households: BARC
.. Across age groups Share of TV viewership universe by age groups Share of TV viewership universe across age groups (in Mn. impressions) 2-14 yrs Senior Kids (>50 years) (2-14 years) 22% 22% 15-30 yrs 16% 20% Mature 31-40 yrs 41-50 years 14% Youth 41-50 yrs (15-30 Adults years) (31-40 yrs) 33% 51+ yrs 17% 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 2017 2016 Contrary to Con o popu popular perc percepti tion, the you youth con ontrib ibutes s a a mass massiv ive 33% 33% sha share of of TV V vie viewership, , and and has has see seen a a gr growth th of of 22% 22% in n impressio ions ove ver the ye year 7 Source: Share of TV viewership by, and across age groups: BARC
And that is Despite increasing internet penetration Broadband subscribers (in Mn.) Increasing TV viewership (in Mn. impressions) 400 345 2-14 yrs 350 300 15-30 yrs 250 218 200 31-40 yrs 150 120 41-50 yrs 100 70.4 40.7 50 18.1 17.9 15.3 16.5 14.5 51+ yrs 0 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 0 2000 4000 6000 8000 10000 Wireless broadband subs (mn) Fixed broadband subs (mn) 2017 2016 20% growth All India internet penetration- 30% in overall TV viewership Pay ay -TV and and di digital l OTT ser services s to o rem remain com omplementary ry scr screens, , wit ith both both gro growin ing ind ndiv ividuall lly and and co co-existin ing 8 Source: Broadband subscribers: TRAI Subscription Report, December 2017; TV viewership impressions: BARC
The Pay - TV Industry 9
An overview of the Pay - TV industry Pay - TV distribution by platform (as a percentage of C&S HH’s) TV V hou households 181 Mn. 2022 2017 78% Pay -TV TV Non on - Pay 72% 150 Mn. 31 Mn. 7% 28% 11% 22% DTH Su Subs Cable Sub Cab Subs Free Di Fr Dish 49 Mn. 101 Mn. 22 Mn. Analog Digital HD Digital The ons onset of of di digitization brou brought abou about grea greater dem demand for or qua quali lity TV vie viewin ing, wit ith ac access s to o ple plethora of of chan channels ls 10 Source: TV households and Pay - TV distribution by platform: MPA Report 2017; Free Dish subscriber base: M&IB Annual Report, 2018
Asymmetry in the Pay - TV Industry DTH maximized Digitization (initiated in 2012) to its advantage. Majority of cable additions were conversion from Analog to Digital Subscribers (in Mn.) 2011 2012 2013 2014 2015 2016 2017 2018P Net new additions by DTH 7.3 4.1 3.6 3.9 3.0 3.5 3.7 4.0 New digital additions by Cable 1.1 9.6 13.3 -1.5 9.7 13.5 10.2 6.9 Out of Which Analog seeding 0.0 7.6 11.5 0.0 8.2 12.1 9.0 5.8 Net new additions by Cable 1.1 2.0 1.9 -1.5 1.6 1.4 1.3 1.2 % of new additions by DTH 87% 67% 66% 161% 65% 72% 75% 78% % of new additions by Cable 13% 33% 34% -61% 35% 28% 25% 22% Despite having only a 32% market share, DTH contributes >53% of subscription revenues earned by broadcasters Cable DTH Subscriber market share (%) 67% 33% Content cost (INR Mn.) 50,938 56,982 Contribution towards subscription revenues of broadcasters 47% 53% Abys ysmally ly low con ontent cos ost t per per sub subsc scriber per per mon onth in n cab able le is s an an ARPU RPU dam dampener for or the entir ire Pay ay - TV ind ndustr try 11 Source: Net additions and content cost: MPA Report 2017
Addressing the elephant in the room - OTT The Gl Global OTT phe phenomenon Low cost of OTT vs Pay -TV drove adoption Annual cost of Netflix 1/10th of Pay -TV cost in the US 1,439 80 1,131 1,064 997 54 30 11 11 8 8 8 7 103 6 DirecTV Charter Dish Comcast Netflix USA Australia Sweden Mexico Nigeria Annual ARPU (USD) -2016 Pay TV monthly ARPU Netflix monthly fee Lo Low OTT cos osts ts com ompared to o tra raditional Pay ay -TV pl platforms, , as as wel ell as as hi high fix fixed br broa oadband pe penetration led to o hi high gher adop adoption of of OTT con ontent gl globall lly 12 Source: Cost of OTT vs Pay – TV: Digital TV Research; Annual cost of Netflix of Pay – TV cost in US: Marymaker Internet Trends Report 2017
Or is it really the elephant? The India India excepti tion Pricing (per month) of OTT services vis-à-vis cable and DTH Cost of OTT vs Pay -TV per month (in USD) 80 500 54 299 30 260 11 11 8 8 8 8 7 6 2 USA Australia Sweden Mexico Nigeria India Netflix Cable Pack DTH Basic packs Pay TV monthly ARPU Netflix monthly fee India is an exception to the global OTT phenomenon, with higher cost of OTT vs Pay -TV High OTT streaming cos Hig osts ts cou ould be be a a majo ajor hi hind ndrance whe hen it t com omes to o OTT pro proli liferation. . Da Data usag usage per per hour hour of of SD SD and and HD HD vie viewin ing is s 1 1 and and 3 3 GB GB re respectiv ively 13 Source: Cost of OTT vs Pay – TV: Digital TV Research; Pricing of OTT services vis-à-vis Cable and DTH: Market Estimates;
Preference for wired broadband The Gl Global OTT cons onsumpti tion pat pattern Fixed broadband usage pattern Fixed broadband penetration (percentage of households) Amazon Video iTunes 4% 3% 98% 94% YouTube 90% Hulu 88% 88% 18% 3% 78% 76% 73% Other 71% 25% 57% Netflix 34% 7% Xbox One 2% Facebook 2% Bit-Torrent HTTP/SSL - Other 2% 7% Fixed broa Fix broadband is s the pr preferred medium gl globally ly to o stream OTT con ontent 14 Source: Fixed broadband penetration- FCC (USA) - 2016, Eurostat (Europe) – 2017; Fixed broadband usage pattern- Sandvine Global Internet Phenomena Report 2016
.. The India exception The India Indian pa pattern Average connection speed (In Mbps) Mobile internet usage pattern UK iTunes, 3% 39.2 Snapchat, 5% Netflix, 4% Google Cloud, 3% Instagram USA 32.4 , 7% HTTP/SSL -Other, Facebook, 14% 16% Japan 31.5 China 22.9 YouTube, 21% Other, 27% Russia 19.5 Brazil 13 India 1.4 Mobile access used to watch snacking, short duration content Lo Low broa broadband spe speeds s and and dat data usag usage pa patterns sugg suggest tha hat mob obile phon phone will ll al always be be a a sec secondary scr screen aft after TV 15 Source: Average connection speed- Akamai Technologies- State of Internet Connectivity; Mobile internet usage pattern- Sandvine Global Internet Phenomena Report 2016
1 + 1 = 11 16
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