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May 2019

FREE DISH AUCTIONS MPEG-4 SLOTS



FREE DISH CONCEPT

Doordarshan's Free Dish Ku band platform was originally conceived to distribute Doordarshan channels to the remotest parts of India. Despite setting up the world's largest network of almost 1,000 terrestrial transmitters, Doordarshan was unable to reach remote locations in India. Further, compared to just 1 terrestrial channel, satellite based Free Dish also provided the entire bouquet of Doordarshan's national and regional channels to viewers all over the country.


FTA ONLY

Free Dish commenced operations as a Free-to-Air unscrambled, MPEG-2 downlink of multiple channels. The platform quickly gained huge popularity, particularly in semi-urban and rural areas. Low cost FTA, MPEG-2 receivers were freely available between ₹ 450 to ₹ 850, in an unregulated market. Well over 20 million Free Dish FTA receivers are estimated to have been sold.

The FTA receivers are Free Dish's most popular aspect for consumers. However, for Doordarshan, it was impossible to track the actual number of users.

The phenomenal popularity of the Free dish platform has enabled Doordarshan to auction carriage slots, at prices more than 10x the transponder cost, making Free Dish an excellent source of revenue. On 11 February 2019, Free Dish auctioned 40 MPEG-2 slots for 1 year for ₹ 395 Crores.






SCRAMBLED GROWTH?

To expand the service, Free Dish has decided to add more than 120 additional channels in phases. All additional channels would be using the more efficient MPEG-4 compression. To track the number of STBs sold and therefore users, Free Dish has taken the radical decision to encrypt all MPEG-4 channels.

All MPEG-4 channels will only be received via special Free Dish approved MPEG-4 receivers with built-in iCAS. Doordarshan has approved 10 Indian companies to manufacture and sell these receivers. Technically it is possible for Free Dish to even offer Pay Channels against subscriptions, on its MPEG-4 transponders, but there are currently no such plans. Indeed, it remains to be seen if consumers will even shift to the far more expensive MPEG-4 satellite receivers for the few extra channels.

Consumers are concerned that limited availability of these receivers, from only a select few manufacturers, will significantly hike receiver prices and limit their availability.



All MPEG-4 Channels On Free Dish Are iCAS Scrambled, But Free


MPEG-4 SLOT AUCTIONS

On 27 March 2019, at its 39th online e-auction, Free Dish sold 15 MPEG-4 slots.



Since existing FTA Free Dish receivers will not be able to receive these channels, there is a zero base of homes capable of receiving Free Dish MPEG-4 channels. Hence, Free Dish kept a low reserve price of just ₹ 5 Lakhs per channel per year, for the e-auction. (In comparison, MPEG-2 slots averaged almost ₹ 10 Crores per channel per year!). The slots were open to all channel genes at the same price.

Details of the 15 MPEG-4 slots sold are included in Table 1.


GOOD PRICE

Free Dish had almost 60 applicants for the 15 MPEG- 4 slots.

Prasar Bharati CEO Shashi Shekhar said the response was over-whelming. He tweeted, "The e-Auction saw slots being taken at an average price that was nearly 8 to 9 times the invitational price underscoring the high competition. With this overall projected annual revenue from DD Free Dish will cross 400 Crore between MPEG2 and MPEG-4 slots."

According to reports, the highest bid during the e-auction was ₹ 57.1 lakh, which is more than 10 times the reserve price of ₹ 5 lakh. The average price of all the 15 bids was ₹ 44.17 lakh per slot.

Free Dish commenced carriage of the 15 channels on MPEG-4, 15 April 2019.


VIEWERS & STBS?

FTA channel broadcaster have taken a leap of faith in paying for MPEG-4 channel carriage, which currently has almost zero viewership.

Free Dish's iCAS embedded MPEG-4 satellite receivers are also not widely available in the market.

It needs to be seen if the current crop of 15 MPEG-4 channels is incentive enough for consumers to upgrade from their Existing MPEG-2 receivers to the more than twice as expensive MPEG-4 receivers? Unless and until that happens, the MPEG-4 platform will be nothing more than an experiment.