‘I’m not wedded to the satellite’
Direct-to-home television company Tata Sky Ltd’s net profit has jumped to ₹408 crore in the fiscal ended March 2018 compared to ₹8 crore in the previous year. It’s profit margin also saw an improvement at 7.1% compared to 0.1% in the year-ago period. Buoyed by the performance of the company that earned a revenue of ₹5,719 crore and a ratings upgrade agency Crisil, Tata Sky managing director and chief executive officer (CEO) Harit Nagpal spoke about the future plans of the company and its mantra of customer-centricity. Edited excerpts from an interview:
How much is your current revenue?
It is in the region of ₹6,000 crore. These days, our run rate would be about ₹20 crore a day—run rate is what my customers recharge every day. That is what I collect from the market.
How many subscribers do you have today and what is the growth rate?
Let’s just say we are adding about 15-20% subscribers every year. And even the revenue is growing at a similar rate. And so is the profitability.
Where is your growth coming from?
There is a perception that Tata Sky is a premium service and only the high-end customers subscribe to it. Yes, we have a disproportionate share of premium segment, be it High Definition subscribers or subscribers who are paying ₹500-600 every month. But the fact is that over the last 4-5 years about 60% of my new subscribers are coming from the villages and are paying about ₹200-220 a month. So, while we have the largest share of more paying subscribers, the fact remains that the number of those subscribers are limited. But we get growth from them by selling more services. A company can survive only if it has all three—the premium, the middle order and the low-end—customers. If you have only low-end customers, you will not be profitable. If you have only highend customers, then you will not be growing.
How much of a reality is cordcutting in India right now?
Cord-cutting happened in America because cable prices were much higher compared to the OTT prices. Cable cost $100 per month. And OTT, let’s say, Netflix, came at $10. So people switched. In India, cable TV is $5 a month. So, when Netflix or something comes at $10 and to watch that product you have to consume $15-20 worth of broadband, the cost rises to $30. How many customers can afford that? India will always be an “and” and not an “or” market. We have OTT, we watch online but we have not given up our TV.
NEW DELHI:
But you announced a tieup with Netflix recently.
We are going to be the supplier of Netflix, Hotstar, YouTube and Amazon Prime. We can change the box which can receive both the signals—from the satellite and from the broadband. So, I will change the hardware in your house which will enable you to watch on your TV screen, live TV via satellite whenever you want to, and OTT via broadband whenever you want to.
So, DTH is feeling the heat from OTT.
It is not out of pressure. It is because I am in the content business. My life depends on the customer. I was buying content from broadcasters earlier and supplying it to customer via satellite. Customer sometimes wants to watch the content of his choice, my job is to fetch that content for him. I am not wedded to the satellite.