Tata Play-Airtel DTH: Stability for operators but fewer choices for consumers?

The broadcast industry is undergoing a transformative phase marked by rapid mergers and consolidations, driven by shifting consumer preferences and financial challenges. As audiences increasingly migrate to digital platforms, traditional broadcast services, especially the Direct-to-Home (DTH) sector, are grappling with dwindling revenues and declining subscriber bases. Following a wave of mergers in the Over-The-Top (OTT) space, the DTH sector now appears to be next in line for significant consolidation.

Among the most anticipated developments in the Indian DTH landscape is the potential merger between Tata Play and Airtel DTH.

Industry experts believe that this alliance could dramatically reshape the satellite television sector. The merger, estimated to be worth $1.6 billion, would result in Bharti Airtel obtaining a majority stake of over 50%, while Tata Play’s existing shareholders, including Walt Disney, would retain the remaining shares. The consolidation is expected to bring financial stability to both operators, although it may also reduce competition and limit choices for consumers.

“Bharti Airtel is in talks with the Tata Group to explore a potential merger of Tata Play’s DTH business with its subsidiary, Bharti Telemedia Ltd. This industry is under pressure. The merger could be beneficial for the parties involved but reduce choices for customers and reduce the market size. It may adversely impact the DTH industry,” said a senior broadcast expert.

The DTH industry has been experiencing a consistent decline in subscribers, with the Telecom Regulatory Authority of India (TRAI) reporting a drop of 2.26 million active subscribers in Q3 2024 alone. The total subscriber base fell from 62.17 million in June to 59.91 million in September. Over the course of a year, from September 30, 2023, to September 30, 2024, the industry witnessed a loss of 4.27 million subscribers. This trend highlights the ongoing shift in viewer preferences, as more audiences transition from traditional television to digital streaming platforms.

As the subscriber base shrinks and revenue growth stagnates, DTH operators are actively exploring mergers to stay competitive. Rajiv Khattar, a broadcast expert, explains the rationale behind these mergers, stating, “The distribution sector is likely to see companies merging or teaming up to form larger entities. This consolidation helps them cut costs and operate more efficiently, which is important because their customer base is shrinking as people move to alternative platforms, and the average revenue per user (ARPU) isn’t increasing.”

He said fewer but larger distribution companies could gain increased bargaining power during negotiations, placing additional pressure on broadcasters whose subscription revenues are already under strain.

“For broadcasters, this means they’ll have to deal with fewer but much larger distribution companies that will have more power when negotiating deals. As a result, broadcasters could face even more pressure on their subscription revenue, which is already taking a hit due to declining subscriber numbers,” Khattar said.

Dish TV CEO Manoj Dhobal also weighed in on the merger talks, reflecting on past consolidations within the industry.

“Dish TV acquired Videocon D2H around 7–8 years ago, and although the D2H brand has been maintained for a long time, efforts are now underway to maximize synergy between the two. Regarding a potential merger between Airtel and Tata, it’s unclear whether it will happen, but if it does, it may take a year or more. Consolidation is generally seen as a positive move, as it helps reduce unnecessary expenses related to sales, marketing, and customer service, ultimately reflecting positively in the financial records of both operators,” Dhobal said. Dish TV India and Videocon d2h merged on March 22, 2018.

Whether this DTH merger will ultimately benefit consumers and the industry as a whole remains to be seen, but one thing is clear: the broadcast landscape is evolving rapidly, and players must be agile to survive.

The Big Mergers

Reliance and Walt Disney merger: In November 2024, Reliance Industries and Walt Disney merged their Indian media assets to form an $8.5 billion entity, creating India's largest entertainment conglomerate. This new company encompasses over 100 TV channels and combines two streaming platforms, JioCinema and Hotstar into JioHotstar.

Prior to that, in 2023, the merger of OTT apps JioCinema and Voot came through. Viacom18 launched Voot in 2014, and later its paid premium service Voot Select entered the streaming business. Later, Reliance moved JioCinema, which was launched under its telecommunications business, “Jio” to Viacom18 in 2022.

Amazon's acquisition of MX Player: In October 2024, Amazon acquired MX Player, a leading free ad-supported streaming service with over 250 million users, and merged it with Amazon's miniTV. This move aimed to consolidate India's competitive streaming market and expand Amazon's regional and mass audiences.