Dish TV India Limited Investor Presentation Stock Code: BSE - 532839 NSE- DISHTV LSE: DTVL 2
Disclaimer Some of the statements made in this presentation are forward-looking statements and are based on the current beliefs, assumptions, expectations, estimates, objectives and projections of the directors and management of Dish TV India Limited about its business and the industry and markets in which it operates. These forward-looking statements include, without limitation, statements relating to revenues and earnings. The words “believe”, “anticipate”, “expect”, “estimate", "intend”, “project” and similar expressions are also intended to identify forward looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the Company and are difficult to predict. Consequently, actual results could differ materially from those expressed or forecast in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, changes in the regulatory environment and other business and operational risks. Dish TV India Limited does not undertake to update these forward-looking statements to reflect events or circumstances that may arise after publication. 3
Investment rationale 01 Ai Aimin ing g to o be be the the lar argest Poised to be the largest media company in India 02 Syn ynergies Significant merger synergies realised. Merged co. to target further synergies 03 Gr Growt wth On course to deliver strong growth and margins Str Stron onghol old ma markets 04 Buffered from alternate technologies; supremacy in semi-urban and rural areas 05 Ann Annuit ity bus busin iness Annuity business with significant Free Cash Flow potential 4
Poised to be the largest media company in India Tot otal Re Revenues (Rs Rs Bn. n.) Year ending 31 March 2019 79.3 75 61.7 57.2 51.2 50 41.0 36.6 31.2 24.6 23.6 25 16.2 12.1 0 Zee Dish TV India Ltd Tata Sky Network 18 Airtel Sun TV PVR D.B.Corp Jagran Hathway Den Networks Entertainment Media & Digital TV Network Prakashan Cable & Enterprises Investments Datacom EB EBITDA (Rs Rs Bn.) Year ending 31 March 2019 25.6 25.6 28 20.4 18.2 20 15.7 12 6.2 5.0 4.1 3.7 1.8 4 2.1 (4) Zee Sun TV Dish TV India Ltd Tata Sky Airtel PVR D.B.Corp Jagran Hathway Network18 Den Networks Entertainment Network Digital TV Prakashan Cable & Media & Enterprises Datacom Investments 5 Source: Annual Report & company filings ; Tata Sky revenue & EBITDA number is for year ending 31 March 2018
Supremacy amongst semi-urban and rural consumers DTH - easiest to reach / most economical for TV Inconvenient- viewing watching Distributed linear TV on row houses mobile screens India outside Growing big cities Large penetration of wireless family size broadband Negligible Unfeasible requirement to lay fibre/ for wired wired broadband broadband Dish TV Di V India India has has majo ajority of of its ts sub subscribers outs outside top op-towns and and cit ities 6
Indian TV Industry 7
The Indian TV industry TV Industry Size (INR Bn.) 2018 018 2020 020 INR 551 INR 551 Bn. Bn. 2021P 551 403 2021 2021 TV subscription revenues 298 m 29 311 m Total l ho house usehold lds s (i (in n Mn. n.) 2019P 481 333 CAGR of 9% (2018-2021P) 2018 435 305 Total l TV TV ho house usehold lds s (i (in n Mn. n.) 0 200 400 600 800 1000 197 7 m 220 0 m Subscription revenues Advertising revenues Broadcas asting Ind ndustry Mar arket shar share - Dis Distribution Ind ndustry 66% 66% 71% 71% TV penetration (of total HH’s) Analog Multiple broadcasters, having 328 Digital Cable Cable pay channels, 574 FTA channels, 17% 48% producing content in more than 16 163 185 18 15 languages DTH C&S HH’s (in Mn Mn.) .) m m 35% TV Indu ndustry to o gain gain fr from om increasing TV incr V and Pay y -TV Televisio ion will ll main aintain pole pole pos posit ition as as the lar argest se segment wit ithin the In India dian M&E &E se sector penetration pen on 8 Source: TV industry size: FICCI-E&Y 2019; Households: BARC India Universe Update 2018; Distribution Industry: MPA Report 2018; Pay & FTA channels :TRAI Mar 2019
TV viewing HHs - Pay & FTA TV V hou households 197 Mn. Pay -TV TV Non on - Pay 163 Mn. 34 Mn. Cab Cable Sub Subs DTH Su Subs Fr Free Di Dish 105 Mn. 58 Mn. 30 Mn. 9 Source: TV & Pay – TV HH: BARC Universe Update 2018; Distribution by platform: MPA Report 2018; Free Dish subscriber base: Prasar Bharti website
TV viewing in India Share of TV viewership universe across age groups TV continues to remain the most popular form of entertainment Senior Avg.daily (>50 years) Kids Dail Daily tune in in on on TV: tim ime spe spent 16% (2-14 years) 566 Mn 566 Mn. . Ind ndividuals pe per 20% individual ind al 03:46 03 :46:21 14% (hh hh:mm:ss ss) Youth (15-30 years) Adults (31-40 yrs) 33% 17% Percentage of single TV households 79% of Indian households still 98% 98% 97% 97% have CRT TV’s 95% 95% All India Urban Rural 77% large and affluent joint families have single TV’s, implying co -viewing as as a a con onsumption pa pattern 10 Source: Percentage of single TV households: BARC ; Daily time spent: FICCI-E&Y 2019
Popular across age groups despite rising internet penetration Share of TV viewership universe by age groups All India internet penetration- 48% (in Mn. impressions) Broadband subscribers (in Mn.) 600 2-14 yrs 22% gr 22 growth th 507 Senior Kids 500 (>50 years) (2-14 years) 15-30 yrs 400 345 Mature 31-40 yrs 41-50 years 300 218 Youth 200 41-50 yrs (15-30 120 years) 100 70 41 51+ yrs 17 18 18 18 15 15 0 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 2017 2016 Wireless Broadband Subs (mn) Fixed Broadband(mn) Con Contrary to o popu popular perc percepti tion, the you youth con ontrib ibutes s a a mass assiv ive 33% 33% shar share of of TV V vie viewership, , and and has has se seen a a gro growth th of of 22% 22% in n impressio ions ove ver the ye year 11 Source: Share of TV viewership by, and across age groups: BARC; Broadband subscribers : TRAI Dec 2018
Emergence of OTT The glob Th obal OTT T phenom omenon on Annual cost of Netflix 1/10th of Pay -TV cost in the US Low cost of OTT vs Pay -TV drove adoption 80 1,439 1,131 1,064 54 997 30 11 11 8 8 8 7 6 103 DirecTV Charter Dish Comcast Netflix USA Australia Sweden Mexico Nigeria Annual ARPU (USD) -2016 Pay TV monthly ARPU (USD) OTT monthly fee (USD) Low OTT costs compared to Lo to tra radit itio ional l Pay ay -TV pl platf tforms, led to to hi high gher r ad adoptio ion of OTT content gl globall lly The India exceptio Th ion Pricing (p.m.) of Popular Packages in OTT, cable and DTH in India Pay TV monthly ARPU (USD) Cost of OTT vs Pay -TV per month (in USD) 80 ₹ 649 54 OTT monthly fee (USD) ₹ 275 30 ₹ 233 11 11 9 8 8 8 7 6 4 Netflix Cable Pack DTH popular packs USA Australia Sweden Mexico Nigeria India Ind ndia ia is s an an exceptio ion to to the e gl global l OTT ph phen enomenon, wi with th hi high gher cos ost t of of OTT vs s Pay ay -TV TV 12 Source: Cost of OTT vs Pay – TV: Digital TV Research; Annual cost of Netflix : Marymaker Internet Trends Report 2017, : Cost of OTT vs Pay – TV: Digital TV Research & internal est.; Pricing of OTT services : Market Estimates
IPTV Typ ypic ical IP IPTV ecosystem High rise High speed Smart devices broadband Infr frastructure Affor Af ordabili lity Co Cons nsumer Co Content & & High spee Hi eed wi wired broa oadband con onnec ected ed read eadin iness ser ervic ices devic ices Densely populated cities Last mile high speed Penetration of smart & high-rise housing wired broadband devices penetration (smart TV, laptop etc ) IP IPTV - use use of of internet to o de deli liver TV prog programs and and vid videos s tha hat are are eit ither liv ive or or on on de demand to o hi high-ris ise hous housin ing and and den densely popu popula lated metro cit cities 13
IPTV - Reality check Win inning IP IPTV su subscri ribers. Is Is it it as as eas easy as as ga gain inin ing tel elecom cus ustomers? Telecom IPTV Capex requirement Low Front loaded Physical Infrastructure requirement Low High Ground Task force Negligible Huge Overall cost of delivery Low Extremely high per home Distribution/reaching the last Through local shops/ retail stores Through existing operators having mile access to homes Pricing High existing data and voice costs Traditional C&S prices are too low to be supported aggressive undercutting susceptible to undercutting by new entrant Consumer experience/ novelty in Free voice and cheap data Nil ( change in pipes only) offering as compared to existing service Potential reach of new technology Pan India Densely populated tier 1 cities Potential consumers Data starved & aspiring mobile Select consumers having extremely customers high data requirements 14
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