Dish TV India Limited

Dish TV India Limited
Investor Presentation
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.
2
Indian M&E Industry Snapshot
Broadcasting industry Distribution industry
M&E industry composition & revenue size (INR bn.)
976 , 50%
2019
387 , 20% 204 ,10% 397 , 20%
2019
475 , 46%
2014
263 , 26%
126 ,12% 161 , 16%
2014
257 , 44%
2009
TV
175 , 30%
Print
Films
89 ,15% 66 ,11%
INR 976 Bn
TV industry size
CAGR of ~ 15.5%
(2014-2019E)
INR 475 Bn
TV industry size
Multiple broadcasters
producing content in
15 languages
across
7 genres
beaming
~800 channels
Analog
Cable
52%
Digital
Cable
20%
DTH
28%
Others
Indian television market statistics (HHs mn.)
2014
301
270
231
169
134
101
2009
Total HHs
2019
2014
TV HHs
197
140
Total households
270 Mn
301 Mn
Total TV households
169 Mn
197 Mn
TV penetration (of total HHs)
62%
66%
C&S penetration (of TV HHS)
83%
86%
169
2019
C&S HHs
3
Source: M&E industry composition & size: FICCI-KPMG 2015, Indian television statistics & broadcasting and distribution industry : MPA Report 2014
Distribution Industry
4
Digital Addressable Systems - DAS
Phase I
Delhi, Mumbai,
Calcutta & Chennai
30-June-2012
Phase III
7,709 urban areas
31-Dec-2015
Phase II
38 notified cities
31-Mar-2013
Phase IV
Rest of India
31-Dec-2016
 Bulk of the potential DAS converts
 Limited coverage by large MSOs due to dispersed population
Cable
 Land grab seeding at throw away prices
 No addressability/KYC
 Working backwards to fill critical gaps; packaging-billingdunning
 Very high DTH recognition
 DTH best suited considering terrain
 Key target markets with more than 60% incremental potential for DTH
DTH
 Seeding ground for High-Definition
 Potential subscribers for upselling – high value packs
Phase III
 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
5
Source: *MPA Report 2014
Distribution Industry - Cable
3 Tiered Structure
MSOs
(more than 115 )
Distributors
LCOs
(at least 1 in
each locality)
(more than
50,000)
Pre-DAS
 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
Post-DAS
 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
6
Distribution Industry - DTH
DTH Players in India
2003
100% digital
Owns last mile subscribers
Subscription driven top-line
TATA Sky:
Launched in 2006. JV
between the TATA
Group and News Corp
Dish TV:
Industry pioneer. Started
operations in 2003. Part of
the ‘Zee’ stable, largest
producer and aggregator of
Hindi programming in the
world
2006
Fully prepaid, no bad debts
Fully tax compliant
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
2007
Reliance Digital:
Part of Reliance
Communication Ltd, a
subsidiary of Reliance
ADA group
2008
Videocon D2h:
Launched in 2009. Part
of the white goods
manufacturing Videocon
group
Sun Direct:
Launched in 2007. JV
between Sun Network and
Astro, Malaysia
2008
Airtel Digital:
Launched in 2008. Part
of the telecom major
Bharti Airtel.
2009
7
8
Many Firsts To Its Credit
First DTH
in India
First to launch
Live TV for
moving vehicles
2003
2007
2009
First to negotiate
content on a
fixed fee basis
First to launch
Home Video
System–DishFlix
First to be PAT
positive in the
Indian DTH
industry
First to launch a
sub-brand
targeting regional
language
markets– ‘Zing’
First to launch
online TV for
DTH viewers –
‘Dish Online
First to achieve
operational breakeven in the Indian
DTH industry
2010
2012
First to
launch High
Definition
First to offer
unlimited
recording
2012
2015
2015
2014
2013
First to be FCF
positive in the
Indian DTH
industry
9
Business Model
P&L structure – FY15
Dish TV India Limited
3%3%
Subscription revenues
1%
Lease rent
2%
Consolidated
revenues
Bandwidth income
100% prepaid
Advertising income
Other income
91%
Upfront subsidy on consumer premises
Programming and other cost
equipment (CPE)
5%
Average ARPU of Rs. 172*
4%
Selling and distribution expenses
License fees
6%
6%
Churn at 0.7% p.m.
Consolidated
expenses
30%
10%
Implied average subscriber life of 10 years
Transponder lease
Other operating costs
Other expenses
12%
Employee benefit expenses
EBITDA margin - 27.3%
10
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
Dish TV
415
50
Widest dealer-distributor network
7
13
Tata Sky
Videocon
35
Rel. Digital
12
Sun Direct
12
Regional offices
389
38
Airtel
Redundancy in case of any kind of
satellite failure or disruption
336
46
Zonal offices
378
276
220
Linear Channels
True HD Channels
11
Source: Company & market data as on 3rd February 2016
Key Metrics - Annual
ARPU* (Rs.)
Market share #
12%
6%
19%
16%
20%
27%
Dish TV
Big TV
Tata Sky
Airtel Digital
Sun Direct
Videocon D2h
200
180
160
140
120
100
80
60
40
20
0
172
131
132
138
FY08
FY09
FY10
Net subscriber base (mn.)
150
151
FY11
FY12
163
157
FY13
FY14 FY15(R)
Hardware subsidy* (Rs.)
2400
15
12.9
10
8.5
5
9.6
10.7
11.4
2000
1600
1,933
1,688
1200
800
5.7
4.3
400
2.5
0
0
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY14
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
FY15
12
Key Metrics - Annual
Subscription revenue (Rs. mn.)
25,000
22,681
24,499
4,960
2000
11,927
8,353
10,000
7,331
4000
16,639
15,000
8000
6000
19,228
20,000
5,000
EBITDA (Rs. mn.)
0
5,897
3,288
-2000
1,117
FY13
FY14
2,380
(2,084) (1,233)
-4000
FY08
FY09
FY10
FY11
FY12
FY13
FY08
FY14 FY15(R)
FY09
Programming and other costs as % of subscription revenues
70%
60%
50%
40%
30%
20%
10%
0%
5,794
6,240
FY10
FY11
FY12
FY15
Net profit/(loss) (Rs. mn.)
1500
71%
31
500
-500
59%
52%
(1,920)
-1500
42%
36%
34%
34%
33%
(660)
*
(1,576)
(2,622)
-2500
-3500
(1,331)
(4,141)
(4,807)
-4500
-5500
FY08
FY09
FY10
FY11
FY12
FY13
Note : * Including prior period items
: (R) FY15 Subscription revenue is restated, netting off of collection charges
FY14
FY15(R)
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
13
Key Metrics - Quarterly
ARPU* (Rs.)
Net subscriber additions (mn.)
Subscription revenue (Rs. mn.)
8000
180
0.5
0.4
0.3
0.416
0.338
0.317
172
170
0.2
171
4000
6,316
2000
160
0
3QFY15
2QFY16
0
3QFY15
3QFY16
2QFY16
3QFY16
3QFY15
50.0%
1500
34.4%
40.0%900
1200
2,654
500
30.0%
500
20.0%
100
10.0%
0
0.0%-300
3000
2500
33.9%
2000
27.6%
1,908
3QFY15
2,550
2QFY16
3QFY16
2QFY16
3QFY16
FCF (Rs. mn.)
Net profit (Rs. mn.)
EBITDA (Rs. mn.) & EBITDA margin
1000
6,926
171
0.1
1500
7,111
6000
870
1,296
900
685
300
(26)
849
600
298
0
3QFY15
2QFY16
3QFY16
3QFY15
2QFY16
Note: * 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.
3QFY16
14
Strategy and Outlook
15
DAS Phase III & IV
Across phase III & IV markets
‘Dish 99’
Specific vernacular markets
‘Zing’
FTA channels + any 3 of Family / Sports / English
Dish99
Regional first; regional language channels , regional look and feel
Any of the Family add-on packs
@ ₹ 25 each p.m.
Packs starting @ just ₹ 99
OR
Set-Top-Box
matlab DishTV
+
Any of the Sports add-on packs
@ ₹ 50 each p.m.
OR
Any of the English add-on packs
@ ₹ 75 each p.m.
Zing Digital
Present in 8 regional
markets
MANDATORY subscription to a minimum 3 of the above mentioned
add-on packs on subscribing to
Dish 99

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
16
High Definition
Box Cost Rationalization
Videocon
Dish TV
Tata Sky
D2h
New Super Dhamal Mix Super Gold +
Family + + HD Access HD Access
Sports Channels Game on HD
Fee
Fee
(Sports and Hindi entertainment)
Rs. 395
Rs. 375
Rs. 378
Life on HD @ Rs. 195
Star Sports HD1
√
x
x
(English entertainment with Sports and Hindi
Entertainment)
Star Sports HD2
√
√
x
Sony Six HD
√
x
x
Ten HD
√
x
x
Key differentiator vis-a-vis cable
ARPU driver
3 HD ADD-ONS
Game on HD @ Rs. 145
Full on HD @ Rs. 220
(Complete dose of entertainment)
17
Source: Market data as on 31st December 2015
International Expansion - Sri Lanka
Pay TV subscribers (000)
Sri Lanka
976
1,000
 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
730
800
579
600
435
400
200
151 122
22
133 113
54 90
7
2008
Pay TV Subs
2014E
DTH Subs
2020E
Cable Subs
IPTV Subs
Pay TV industry revenue (USD mn.)
 Zero subsidy on CPE sales
7, 21%
3, 9%
23, 70%
DTH revenue
Cable TV revenue
IPTV revenue
18
Source: MPA 2014
Financials
19
Summarized Consolidated P&L - Quarterly
3QFY 2015 vs. 3QFY 2016
Rs. million
Operating revenues
Expenditure
EBITDA
EBITDA margin (%)
Other income
Quarter
ended
Quarter
ended
Dec. – 2014
Dec. – 2015
6,901
7,715
4,993
5,060
1,908
2,654
27.6
34.4
170
42
1,616
1,463
478
549
Profit / (Loss) before prior period & tax
Prior period items
(16)
-
685
-
Tax expense/(write back)
Net Profit / (Loss) for the period
10
(26)
685
Depreciation
Financial expenses
Variance(3QFY15
vs.3QFY16) in %
11.8
1.3
Operating revenue break-up
(Rs. mn)
281 129 95
99
39.1
Lease rentals
Bandwidth
charges
7,111
(75.4)
(9.5)
Subscription
revenue
3QFY - 2016
Advertisement
income
Teleport
services, CPE
& Other
14.7
20
Consolidated Balance Sheet
Rs. million
EQUITY AND LIABILITIES
Shareholders’ funds
(a) Share capital
(b) Reserves and surplus
Non-current liabilities
(a) Long-term borrowings
(b) Other long term liabilities
(c) Long-term provisions
Current liabilities
(a) Short-term borrowings
(b) Trade payables
(c) Other current liabilities
(d) Short-term provisions
Total
Sept. 2015 (Unaudited)
1,066
(2,773)
(1,707)
7,549
519
174
8,243
166
2,036
14,988
10,491
27,682
34,217
21
Consolidated Balance Sheet (continued)
Rs. million
ASSETS
Non-current assets
(a) Fixed assets
(i) Tangible assets
(ii) Intangible assets
(iii) Capital work-in-progress
(b) Non-current investments
(c) Long-term loans and advances
(d) Other non-current assets
Current assets
(a) Current investments
(b) Inventories
(c) Trade receivables
(d) Cash and bank balances
(e) Short-term loans and advances
(f) Other current assets
Total
Sept. 2015 (unaudited)
16,124
96
5,015
2,000
2,971
312
26,518
202
852
3,091
3,348
206
7,700
34,217
22
Annexure
23
Essel Group
Launched in 1976, Essel Group is one of India’s largest business houses, with a dominant presence in Media

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
Founded by Dr. Subhash Chandra
Group Market Cap ( Listed entities under Essel Group ): Rs 534.4 bn(1)
Essel Group
Other Businesses
Media
Distribution
Content



Zee Entertainment
Launched in 1992
Zee Media Corp. Ltd.
Launched in 1992
One of India’s largest media
Strong presence in national
and general TV entertainment and regional news genre
network
Market Cap: Rs 391.3 bn(1)
Market Cap: Rs 8.9 bn(1)
Dish TV
SITI Cable Network
Daily News & Analysis
Launched in 2005
Launched in 2006
Launched in 2005
Asia’s largest DTH service
provider
One of India’s largest MSO,
presence across 54 cities
Market Cap: Rs 85.6 bn(1)
Market Cap: Rs 24.2 bn(1)
English broadsheet daily with
presence across Mumbai,
Bangalore, Pune,
Ahmedabad, Jaipur & Indore






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
Source: Company websites, BSE, MPA Report 2014
Note: (1) Market capitalization as on 5th February, 2016
24
Thank You
25