India is witnessing a decine in Pay TV subscriptions with extra households migrating to both digital via Connected TV or free-to-air (FTA), the silent participant that’s more and more luring viewers.

The always altering dynamics of television consumption in India, with clear segmenting of the market into Pay TV, Free TV and Connected TV, has raised questions like what’s the way forward for tv contemplating the decline in Pay TV? Will free tv sway customers or will Connected TV take away many of the subscription pie?

The reply isn’t so simple as the questions as every phase is sizable in itself.

According to the FICCI-EY report, out of round 182 million tv households in 2023, 19 million had been Connected TVs, 45 million had been FTA screens and 118 million Pay TV houses.

Pay TV houses declined by 20 lakh, from 120 million in 2022 to 118 million in 2023, and noticed a 9.2% drop since 2020 when the quantity stood at 130 million.

The downward development in Pay TV phase alerts that the customers are drifting to Connected TV and Free TV.

The fall in Pay tv houses has been attributed to cord-cutting and motion to Connected TV on the high finish of the market, progress of alternate leisure choices & digital platforms, in addition to availability of a sizeable content material bouquet for Hindi-speaking markets on free tv (DD FreeDish), which remained secure in 2023 and offered a aggressive providing to the bottom pack on Pay TV, the report mentioned.

According to the report, Pay TV will see a downfall, and by 2026, the variety of its subscriptions is more likely to fall by 5 million. However, Free TV or DD FreeDish will achieve audiences with estimated 50 million free TV connections by 2026 and 57 million by 2030 from the present 45 million.

As per the statistics, whereas DD FreeDish, the one FTA service within the nation, is seeing a secure market with 45 million subscribers in 2023, the tv combine is altering considerably in favour of Connected TV with 19 million CTV houses in 2023, up from 15 million in 2022.

As per the newest India’s M&E report, CTV connections are projected to witness double the expansion by 2026 when it’s anticipated to have 40 million subscriptions in comparison with the present 19 million. The CTV subscriptions have grown over threefold since 2020, when it was simply 5 million.

It mentioned that the state of affairs post-2026 might be fairly completely different, as soon as wired broadband crosses 60 million to 70 million houses and 5G connections scale considerably. At this level, we anticipate Connected TV to begin scaling extra rapidly, and attain 100 million by 2030, whereas linear TV houses drop to 140 million, of which 57 million could be free TV houses.

Some business consultants, nonetheless, really feel that Pay TV could decline every year however is not going to go away fully and whereas FTA is rising at an honest fee, Connected TV will take over in an enormous method.

“I don’t foresee a free fall in Pay TV numbers, but as per my assessment, a consistent 3% decline each year can happen. It is a shift happening from linear TV to Connected TV,” mentioned Karan Taurani, Senior Vice President, Elara Capital.

He mentioned that Pay TV and FTA will co-exist because the distinction of their sizes is big.

“In terms of FTA, I would not say it is the future but it will be a complimentary system with Pay TV. It cannot scale up as much as Pay TV is today. Pay TV households are about 120 million. Even if they decline by 3-4%, they won’t go below 100 million in a big manner. FTA is a small number today at around 35-40 million households. Even if they grow at about 10% every year, they won’t reach above 50 million households (anytime soon). Both Pay and FTA will co-exist. There is no proper way to measure FTA homes as these are mere unencrypted set-top boxes. It is growing because it is free and offers close to 200 channels,” he mentioned.

According to a different senior business knowledgeable, linear TV goes down and Connected TV is gaining extra households and whereas FTA is getting common it isn’t the way forward for tv.

“The linear TV is going down and the Connected TV is going up. The overall ecosystem around FTA is also growing but it is not the future as it is not a proper model. It is meant to cater only to the lower section of the society. People can come back from FTA to Connected TV as well. Anyway, there is no proper mechanism to measure the free TV service,” mentioned the business veteran.

According to consultants, innovation is required in Pay TV content material to make sure the autumn in viewers isn’t increased, an space the place many broadcasters have lowered focus in recent times, as they focussed on gaining OTT audiences with in another way created content material.

There is a have to create customized viewing merchandise for related tv customers who want extra than simply linear feeds, significantly in genres like information and infotainment, mentioned the FICCI-EY report.

“The decline (in Pay TV) should not be articulated to the viewership for shows because that is moving from TV to digital so a lot of Pay TV companies need to build a strong model on digital in terms of advertising and monetising the content. That is how things will shape up,” Taurani mentioned.

Experts additionally really feel that Pay TV subscription is more likely to see an enormous decline in 2024 because of the absence of value hike, the constructive affect of which was seen in 2023.

Free tv, alternatively, continued at an estimated 45 million subscribers on the again of cheaper tv units, financial points, and as an add-on connection to pay TV.