dish tv india limited
TRANSCRIPT
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.
Disclaimer
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INR 976 BnTV industry size
INR 475 BnTV industry size
66%TV penetration (of total HHs) 62%
C&S penetration (of TV HHS)
Indian M&E Industry Snapshot
257 , 44%
475 , 46%
976 , 50%
175 , 30%
263 , 26%
387 , 20%
89 ,15%
126 ,12%
204 ,10%
66 ,11%
161 , 16%
397 , 20%
2009
2014
2019
M&E industry composition & revenue size (INR bn.)
TV Print Films Others
2014
2019
231 270
301
134 169
197
101 140
169
2009 2014 2019
Total HHs TV HHs C&S HHs
Indian television market statistics (HHs mn.)
Source: M&E industry composition & size: FICCI-KPMG 2015, Indian television statistics & broadcasting and distribution industry : MPA Report 2014
2014 2019
Total households
83% 86%
CAGR of ~ 15.5%
(2014-2019E)
301 Mn270 Mn
Total TV households 197 Mn169 Mn
Distribution industry
DTH
28%
Analog
Cable
52%Digital
Cable
20%
Broadcasting industry
Multiple broadcasters
producing content in
15 languages
across
7 genres
beaming
~800 channels
3
Digital Addressable Systems - DAS
Source: *MPA Report 2014
Phase I
Delhi, Mumbai,
Calcutta & Chennai
30-June-2012
Phase II
38 notified cities
31-Mar-2013
Cable Land grab seeding at throw away prices
No addressability/KYC
Working backwards to fill critical gaps; packaging-billing-
dunning
DTH Seeding ground for High-Definition
Potential subscribers for upselling – high value packs
Bulk of the potential DAS converts
Limited coverage by large MSOs due to dispersed population
Very high DTH recognition
DTH best suited considering terrain
Key target markets with more than 60% incremental potential for DTH
5
Phase IV
Rest of India
31-Dec-2016
Phase III
7,709 urban areas
31-Dec-2015
Stayed by High Courts in 10 states
No analog switch -off on sunset date
No spike in demand around deadline
Traction seen post deadline due to industry push
Ph
ase I
II
Distribution Industry - Cable
Analog signal - limited carrying capacity, broadcasters jostling for PCS
Placement & Carriage fees - bulk of MSOs top-line
Massive under declaration – ignored to maintain MSOs ‘reach.’ Reason behind LCOs prosperity
No incentive to raise ARPUs
Digital signal - fatter pipe, larger carrying capacity
Placement fees mindset
B2B Net billing
100% postpaid. Element of bad debts?
Impairment of Set-Top-Box (STB)?
Rising content cost / content negotiation bottlenecks
3 Tiered Structure
MSOs(more than 115 )
Distributors (at least 1 in
each locality)
LCOs (more than
50,000)
Pre-DAS
Post-DAS
6
Dish TV:Industry pioneer. Started
operations in 2003. Part of
the ‘Zee’ stable, largest
producer and aggregator of
Hindi programming in the
worldTATA Sky:Launched in 2006. JV
between the TATA
Group and News Corp
Sun Direct:Launched in 2007. JV
between Sun Network and
Astro, MalaysiaReliance Digital:
Part of Reliance
Communication Ltd, a
subsidiary of Reliance
ADA group Airtel Digital:
Launched in 2008. Part
of the telecom major
Bharti Airtel.Videocon D2h:
Launched in 2009. Part
of the white goods
manufacturing Videocon
group
Distribution Industry - DTH
2003
2006
2007
2008
2009
100% digital
Owns last mile subscribers
Subscription driven top-line
Fully prepaid, no bad debts
DTH contributes ~ 60% of the
broadcaster’s domestic subscription
revenue; scope for rationalization vs.
cable
Heavily taxed:
• License fees – 8% AGR instead of
10% GR (TRAI recommendations
on issues related to new DTH
licenses)
• Entertainment tax & Service tax - to
be subsumed post rollout of GST
Fully tax compliant
2008
7
DTH Players in India
Many Firsts To Its Credit
9
2007
2009
2010
2012
2012
201320142015
2003
2015
First DTH
in India
First to negotiate
content on a
fixed fee basis
First to launch
Live TV for
moving vehicles
First to achieve
operational break-
even in the Indian
DTH industry
First to
launch High
Definition
First to offer
unlimited
recording
First to be FCF
positive in the
Indian DTH
industry
First to launch
online TV for
DTH viewers –
‘Dish Online
First to launch a
sub-brand
targeting regional
language
markets– ‘Zing’
First to be PAT
positive in the
Indian DTH
industry
First to launch
Home Video
System–DishFlix
91%
3%3%
2%
1%
Subscription revenues
Lease rent
Bandwidth income
Advertising income
Other income
Consolidated
revenues
30%
12%
10%
6%
6%
5%4%
Programming and other cost
Selling and distribution expenses
License fees
Transponder lease
Other operating costs
Other expenses
Employee benefit expenses
Consolidated
expenses
100% prepaid
Upfront subsidy on consumer premises
equipment (CPE)
Average ARPU of Rs. 172*
Churn at 0.7% p.m.
Implied average subscriber life of 10 years
Dish TV India Limited
Business Model
10
P&L structure – FY15
EBITDA margin - 27.3%
Note: * For 3QFY16; post impact of hike in service tax hike from 12.36% to 14.% w.e.f June 2015 & additional 0.5% Swachh Bharat Cess w.e.f. November 2015
Dish TV vs. Competition
Multi-satellite environment Maximum content tie-ups & true HD channels Widest dealer-distributor network
220
276
378
389
336
415
Sun Direct
Rel. Digital
Airtel
Videocon
Tata Sky
Dish TV
Linear Channels
12
12
35
38
46
50
True HD Channels
Zonal offices7
Regional offices 13
Source: Company & market data as on 3rd February 2016
11
Redundancy in case of any kind of satellite failure or disruption
Key Metrics - Annual
Source: Company;
Note : * ARPU & hardware subsidy taken as Q4 data for respective years. # Market share based on gross subscribers as on 31st December, 2015 as per market estimates
(R) Restated post netting off of collection charges
131 132 138 150 151
157 163
172
0
20
40
60
80
100
120
140
160
180
200
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15(R)
ARPU* (Rs.)
27%
20%
12%6% 19%
16%
Dish TV Tata Sky Sun Direct
Big TV Airtel Digital Videocon D2h
Market share #
1,933
1,688
0
400
800
1200
1600
2000
2400
FY14 FY15
Hardware subsidy* (Rs.)
2.5
4.3 5.7
8.5 9.6
10.7 11.4
12.9
0
5
10
15
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
Net subscriber base (mn.)
12
Key Metrics - Annual
Note : * Including prior period items
: (R) FY15 Subscription revenue is restated, netting off of collection charges
(2,084)(1,233)
1,117 2,380
4,960 5,794 6,240
7,331
-4000
-2000
0
2000
4000
6000
8000
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
EBITDA (Rs. mn.)
71%
59%52%
42%36% 34% 34% 33%
0%
10%
20%
30%
40%
50%
60%
70%
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15(R)
3,288 5,897
8,353
11,927
16,639 19,228
22,681 24,499
-
5,000
10,000
15,000
20,000
25,000
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15(R)
Subscription revenue (Rs. mn.)
Programming and other costs as % of subscription revenues
(4,141)(4,807)
(2,622)
(1,920)(1,331)
(660)(1,576)
31
-5500
-4500
-3500
-2500
-1500
-500
500
1500
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
Net profit/(loss) (Rs. mn.)
13
*
Key Metrics - Quarterly
0.4160.338 0.317
0
0.1
0.2
0.3
0.4
0.5
3QFY15 2QFY16 3QFY16
Net subscriber additions (mn.)
171 171 172
160
170
180
3QFY15 2QFY16 3QFY16
ARPU* (Rs.)
6,316
6,926 7,111
0
2000
4000
6000
8000
3QFY15 2QFY16 3QFY16
Subscription revenue (Rs. mn.)
1,908
2,550 2,654
27.6%
33.9% 34.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
0
500
1000
1500
2000
2500
3000
3QFY15 2QFY16 3QFY16
EBITDA (Rs. mn.) & EBITDA margin
(26)
870
685
-300
100
500
900
3QFY15 2QFY16 3QFY16
Net profit (Rs. mn.)
298
849
1,296
0
300
600
900
1200
1500
3QFY15 2QFY16 3QFY16
FCF (Rs. mn.)
14Note: * ARPU is post netting-off of collections charges. 3QFY16 ARPU is post impact of service tax hike from 12.36% to 14% w.e.f.June’15 & additional Swachh Bharat Cess of 0.5% w.e.f. November’2015.
DAS Phase III & IV
Zing DigitalPresent in 8 regional
markets
16
Specific vernacular markets
‘Zing’
Set-Top-Box
matlab DishTV
Dish99Packs starting @ just ₹ 99
MANDATORY subscription to a minimum 3 of the above mentioned
add-on packs on subscribing to
Dish 99
Any of the Family add-on packs
@ ₹ 25 each p.m.
Any of the Sports add-on packs
@ ₹ 50 each p.m.
Any of the English add-on packs
@ ₹ 75 each p.m.
Across phase III & IV markets
‘Dish 99’
Regional first; regional language channels , regional look and feelFTA channels + any 3 of Family / Sports / English
OR
OR
Easy transition for first time digital subscribers
Value for money offering; digital quality picture at the price of cable
Customized content in digital quality
Healthy margins
+
3 HD ADD-ONS
Game on HD @ Rs. 145
(Sports and Hindi entertainment)
Life on HD @ Rs. 195
(English entertainment with Sports and Hindi
Entertainment)
Full on HD @ Rs. 220
(Complete dose of entertainment)
Dish TV Tata Sky
Videocon
D2h
Sports Channels
New Super
Family +
Game on HD
Dhamal Mix
+ HD Access
Fee
Super Gold +
HD Access
Fee
Rs. 395 Rs. 375 Rs. 378
Star Sports HD1 √ x x
Star Sports HD2 √ √ x
Sony Six HD √ x x
Ten HD √ x x
High Definition
Source: Market data as on 31st December 2015
17
Box Cost Rationalization
Key differentiator vis-a-vis cable
ARPU driver
23, 70%3, 9%
7, 21%
DTH revenue Cable TV revenue IPTV revenue
151
579
976
122
435
730
22 54 133
7 90 113
-
200
400
600
800
1,000
2008 2014E 2020E
Pay TV Subs DTH Subs Cable Subs IPTV Subs
International Expansion - Sri Lanka
Sri Lanka
Population ~ 20 million
TV penetration at 77%
High digital penetration; 90% of total Pay
TV subscribers
DTH maintains dominance with ~ 72%
market share. Cable, distant second
despite being 4 years older
ARPU ~ USD 7 pm
Zero subsidy on CPE sales
Source: MPA 2014
Pay TV industry revenue (USD mn.)
Pay TV subscribers (000)
18
Quarter ended
Quarter ended
Rs. million Dec. – 2014 Dec. – 2015
Operating revenues 6,901 7,715
Expenditure 4,993 5,060
EBITDA 1,908 2,654
EBITDA margin (%) 27.6 34.4
Other income 170 42
Depreciation 1,616 1,463
Financial expenses 478 549
Profit / (Loss) before prior period & tax (16) 685
Prior period items - -
Tax expense/(write back) 10 -
Net Profit / (Loss) for the period (26) 685
3QFY 2015 vs. 3QFY 2016Operating revenue break-up
(Rs. mn)
3QFY - 2016
Summarized Consolidated P&L - Quarterly
20
11.8
1.3
39.1
(75.4)
(9.5)
14.7
Variance(3QFY15 vs.3QFY16) in %
7,111
99
281 129 95
Subscriptionrevenue
Lease rentals
Bandwidthcharges
Advertisementincome
Teleportservices, CPE& Other
Rs. million Sept. 2015 (Unaudited)
EQUITY AND LIABILITIES
Shareholders’ funds
(a) Share capital 1,066
(b) Reserves and surplus (2,773)
(1,707)
Non-current liabilities
(a) Long-term borrowings 7,549
(b) Other long term liabilities 519
(c) Long-term provisions 174
8,243
Current liabilities
(a) Short-term borrowings 166
(b) Trade payables 2,036
(c) Other current liabilities 14,988
(d) Short-term provisions 10,491
27,682Total 34,217
Consolidated Balance Sheet
21
Rs. million Sept. 2015 (unaudited)
ASSETS
Non-current assets
(a) Fixed assets
(i) Tangible assets 16,124
(ii) Intangible assets 96
(iii) Capital work-in-progress 5,015
(b) Non-current investments 2,000
(c) Long-term loans and advances 2,971
(d) Other non-current assets 312
26,518
Current assets
(a) Current investments -
(b) Inventories 202
(c) Trade receivables 852
(d) Cash and bank balances 3,091
(e) Short-term loans and advances 3,348
(f) Other current assets 206
7,700
Total 34,217
Consolidated Balance Sheet (continued)
22
One of India's largest vertically integrated media and entertainment group, and also one of the leading producers, content aggregators and distributors of
Indian programming globally
One of the largest producers and aggregators of Hindi programming in the world
Other Businesses
Essel Group
Media
Launched in 1992
One of India’s largest media
and general TV entertainment
network
Launched in 1992
Strong presence in national
and regional news genre
Founded by Dr. Subhash Chandra
Group Market Cap ( Listed entities under Essel Group ): Rs 534.4 bn(1)
Source: Company websites, BSE, MPA Report 2014
Note: (1) Market capitalization as on 5th February, 2016
Market Cap: Rs 391.3 bn(1) Market Cap: Rs 8.9 bn(1)
Launched in 2005
Asia’s largest DTH service
provider
Launched in 2006
One of India’s largest MSO,
presence across 54 cities
Daily News & Analysis
Market Cap: Rs 85.6 bn(1) Market Cap: Rs 24.2 bn(1)
Launched in 2005
English broadsheet daily with
presence across Mumbai,
Bangalore, Pune,
Ahmedabad, Jaipur & Indore
Content Distribution
Launched in 1976, Essel Group is one of India’s largest business houses, with a dominant presence in Media
Zee Entertainment Zee Media Corp. Ltd. Dish TV SITI Cable Network
Packaging (Essel Propack)
– Market Cap: Rs 24.4 bn(1)
Theme Parks: Essel World and
Water Kingdom
Playwin: India’s first and largest
online gaming company
Cornership: Animation studio
Cyquator Technologies: IT
Infrastructure outsourcing
Infrastructure
Education
Precious Metals
Healthy Lifestyle & Wellness
Essel Group
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