India’s pay-TV ARPU, or Average Revenue Per User, is among the lowest in the world. This is due to the pay-TV market being very crowded with many DTH and Cable operators and the government providing free DTH services for FTA (Free-to-Air) channels. New entrants in the market like VOD and OTT providers combined with consumer demand for smaller packages places additional pressure on ARPU.
Even with these pressures, the forecast for Indian pay-TV ARPU is positive – with an increase in ARPU of 10% for DTH and 12% for Cable expected by 2022. Growing GDP, expanding middle class and the completion of the government mandated digitisation last year are all contributing factors to this expected increase.
Increasing ARPU, subscriber acquisition and reducing churn are some of the pay-TV operator’s main business objectives. To increase ARPU, the operator needs to understand what their customers want, and how much they can afford. This requires segmentation of the customer base to ensure the needs of groups of customers can be met. Typical segmentation criteria include economic demographics, regional differences and customer behavior.
In the next post, I look into economic demographic specific segmentation to increase ARPU in India.
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.