Because this meeting

is not about discussing another clever campaign with a smart strap line!

Aviation has an interesting analogy

The Importance of the 3rd Dimension

One fun aspect of becoming an aviator is that while most people on terra firma witness only breadth and length,

Charles Lindbergh Aviator, Author, Inventor, Explorer Time Magazine January 2 1928

One fun aspect of becoming an aviator is that while most people on terra firma witness only breadth and length,

the flier up there witnesses the third dimension of height & depth that completes the human story

Charles Lindbergh Aviator, Author, Inventor, Explorer Time Magazine January 2 1928

Therefore

from an aerial view if we were to put the key task for DEN - in one word

 it would be

Bust the old and create some new

PERCEPTIONS

To that end Communication will play a dual role

PERCEPTIONS
Bust the old
Primarily will happen through a new & enhanced product and service experience Communication will play a supporting role

To that end Communication will play a dual role

PERCEPTIONS
Bust the old
Primarily will happen through a new & enhanced product and service experience Communication will play a supporting role

Create the New

Communication to play a key awareness & image building role Product and service experience to substantiate the Brand promise

The task looks

SIMPLE
But then , why did we take some

TIME

We surmise basis our Consumer Understanding

What DEN faces is not another

CAMPAIGN OR ADVERTISING ISSUE

Instead, we face a handful of issues, the first one being

Complete lack of

IDENTITY
Are we a content business or a content delivery business for the consumer? Do we have tech connotations or connotations of being just another commodity biz? Are we deemed as future facing or a relic of the past ?

No clear cut

POSITIONING
What is the kind of mental space we have in the consumers mind?

A hyper active , over aggressive

COMPETITION
Cable fights with a variety of platforms who have a far more aggressive and consciously cultivated consumer face for years as we shall deal later in this discussion They are purposefully poaching on our urban consumer base and acquiring customers faster in the rural areas

CONSUMER

SEGMENTATION
We need to tailor our tone of voice and offering to differing consumer sets something that our competitors have learnt to do very well

OUR

BUSINESS MODEL
We need to up the ARPUs / leverage our installed base of 10 million - Revenue / Growth challenge We need to counter the competition / up grade the present consumer commmunity Retention challenge We need to acquire more customers Acquisition challenge

As an Agency, we constantly undertake across categories

Usage & Attitude surveys

Brands and Categories Tracking Studies

Qualitative Explorations

All this makes us believe

That for commodified and generic categories that have not cultivated a consumer face & a stance- like Cable
Product desire and Brand choice are driven by the consumer mindset in relation to the technology and its perceived modernity For example if I deem LCD to be the latest technology over CRT I will be positively disposed to all the Brands in the LCD category Or if I deem DTH or other competitive platforms to be advanced to Cable I will always have more affinity to those Brand (s)

This is why we undertook a deeper analysis

An aerial view of what will define & drive your business apart from the forces you appreciate

This is why we undertook a deeper analysis

An aerial view of what will define & drive your business apart from the forces you appreciate User/consumer centric point of view

This is why we undertook a deeper analysis

An aerial view of what will define & drive your business apart from the forces you already appreciate User/consumer centric point of view Lessons from other markets

We have used all this to leave you with

POSITIONING PLATFORMS
That will tackle the Perception Issues Will ensure connect with a variety of target audience as you mentioned in your brief Will build the right image & credentials for Cable as a Brand Identity Issues

Through these Positioning Platforms we seek to

Start a dialogue with you to co script the brief for an year round Marketing Program not just another campaign Transform DEN to the stature of a Comcast in the long term something that you brief is so effusive about!

This is the structure we will follow

Context & Direction

What is the state of play? Drivers/Influencers/Forces defining the business Competitive Dynamics

This is the structure we will follow

Context & Direction Issues & Opportunities

Elements of the product consumer relationship Consumer living room dynamics

This is the structure we will follow

Context & Direction Issues & Opportunities Upshots & Recommendations

Our hypothesis & suggestions what should be our go to market stance Way forward for communication development

And this is what all we leaned upon

Industry Researches we could lay our hands on

Cross category competition especially from Sat Pay TV platforms India & abroad

Cable players and their offerings

Other digital media widgets/enhancements/platforms/devices/applications

Consumer families interaction across SEC classes Where we used Projective Techniques like Brand Obituaries / Personification/Analogies etc

Consumption patterns Behavioral mapping Response & adoption rates

And our experience of working with Tata Sky

We were especially impressed by

Echostars experience in US, Mexico and Taiwan

We were especially impressed by

Evolution of Taiwan as a Cable Market Cable players like TBC, CNS and Kbro

We were especially impressed by

Bell TV in Canada Comcast in US

We were especially impressed by

Bsky B in the UK Direc in Latin America

Some of these learnings we will try to incorporate

What we wished we had for a better depth

Database of your consumers DENs own U&A Any specific researches Any learnings that the senior management is privy to Your plans for enhancing your product offering

Context & Direction

Section I What is the state of play ?

This business is clearly about scale and rightfully will be the next opportunity post telecom

Broadly..

Disposable incomes are increasing

Disposable incomes are increasing

Surge in HD capable platforms has accentuated entertainment consumption

Disposable incomes are increasing

Sociological changes in family as a unit and lifestyles in general more number of TVs Surge in HD capable per household platforms has accentuated entertainment consumption

Specifically

The most promising media and entertainment economy fastest growing pay tv market

Up to 191 million TV owning HHs with120 pay tv services HHs by 2013

Digitization and interactivity adoption the fastest every third digital addition globally is from India 20% of installed base already digital

Rural leading the digitization movement Rural & Urban markets growing parallely

But still
One of the toughest trading environments
ARPUs under pressure High customer acquisition costs High Capex/Opex Aggressive competition

The end users are getting savvier

Media & Entertainment consumption Delivery Platforms

They are segmenting their in a variety of ways

Multiple Delivery Platforms

Cable Platform
The incumbent architecture so to say Large installed base 85 million No consolidation large and fragmented players Holders of the last-mile connectivity to the consumer

Multiple Delivery Platforms

Cable Platforms

>

DTH Platform

Has seen much interest of late Sustained corporate presence Consistent Branding efforts Are driving the top line acquisitions Deemed as modern

Multiple Delivery Platforms

Cable Platforms

>

DTH Platforms

>

IP platform

Maturing fast Led by telecom players Most of the global cable firms are already running their applications and delivery architecture on an IP core Bound to happen in India as well Aggressive representation from two players Airtel and Reliance

Cable Platform

DTH Platform

IP Platform

Mobile & Interactive Devices Platform Use other technologies like wi-fi/3G and wi-max to hook up to and deliver content Are becoming access agnostic The device flips between different technologies to deliver the content to the consumer wi-fi/wi-max/ 3Gtechnologies and as Nokia has what they call DTT

The New York Times /January 18 - 2010

Gaming consoles like xbox are already saying that their services should be thought of as a cable channel This is bound to happen in our country as well

Cable Platform

DTH Platform

IP Platform Digital

Mobile & Interactive Devices Platform

Terrestrial Platforms

Will include primarily Doordarshan once HITS and the change over to Digital transmission takes place

Barring Cable
All these platforms
Have better tech credentials Have a clearly defined consumer face Better Top of mind recall Better service levels at least perceptually Not better but competitive pricing

Which platform is likely to have a dominant consumer share? Are there any learnings?

So, what does it mean for India and for Den ?

Two ways of looking at it

Learnings from similar markets around the world

Trying to forecast India basis local observations always a tricky question anyways

Learnings from other Markets

Global experience suggests that in markets where cable had a dominant share of the market other pay tv services (DTH/IPTV etc) stabilize around 30% or so

Learnings from other Markets

It also depends on who sets the agenda Comcast (essentially a cable company) did it in US BskyB (essentially a Sat company) did it in UKand so did Direc in Latin America

Learnings from other Markets

The dominant trend seems to be that different companies invest in their respective platforms and there is an overall synergy in that case it becomes pretty much like telecoms standards

In India too, some players are more bullish on DTH

We expect our DTH Business to contribute more than our Cable business in the next four quarters
Punit Goenka CEO Zee Entertainment Enterprises CNBC TV 18 October 12 2009

Some players are more bullish on Cable

We believe that Cable is going to be the driving force once it gets its act together

K Jayaraman MD & CEO Hathway Cable & Datacom http://www.nds.com/press_releases/Hathway_DVR_120359.html

Some players are more bullish on IP

The whole world is shifting to an IP centric delivery model and this is the way to go

Sunil Mittal Chairman & CEO Bharti Airtel Davos 2008

We believe
Fairly aggressive DTH and IPTV competition Consolidation and strong market focus on their side fragmentation and lack of consumer focus on our side Probably this explains that despite having similar digital households ( 16 million) than overall DTH base (close to 18 million) the Cable industry allowed the DTH purveyors to take away the Digital positioning

Lack of consumer focus on the cable operators side has led to these players attacking the industry on two sides ARPU & Value Added Services Side
They are trying to up their ARPUs by aggressively communicating their value added services to the urban consumer direct poaching on the cable guys customer base

ARPU & Value Added Services Side

>

Customer Acquisition side

They are more aggressively picking the rural consumer (the segment driving market growth)

May be that is why

There is a strong debate that cable will be a second fiddle technology to these players Boo Hoo!

This provoked us to ask

What is the Identity of the Cable Industry?

What are the savviest investors/players in the industry saying?

Honestly for an industry going to be in excess of USD 30 billiion revenue across Asia Pac, there are varied view points on the business model. There is scant clarity.
Marcel Fenez Global Leader Media & Entertainment PwC Chairman Cable & Satellite Broadcasting Association of Asia

Over optimistic , over hyped & over sold!

Cable is a de growing business. That is why I got out of Direc and used the stake to buy Dow Jones. My hunch is that content rather than content delivery is where the profits are
Rupert Murdoch Chairman & CEO News Corp Ad:Tech New York August 2009

Being present in 25 million homes, being the countrys largest ISP and the largest purchaser of content how can you call us content delivery boys?
Brian Berger VP Strategy & Development (North America) Comcast Interactive Media Ad:Tech New York August 2009

One consumer we met had an interesting take

Cable is the delivery platform that I have fond memories of. It exposed me to the world for the first time. But it never talked to me like a DTH or an IPTV talks to me now a days And when it did, it managed to infuriate than endear. I would miss my humble cable if it were to die. It is so much like my 1984 Maruti 800

Putting all of it together there can be eight dimensions of Consumer Engagement

Eight key dimensions of consumer engagement

Perceptual Space How is the business viewed by the consumer? Legacy or Future ready?

Perceptual Space

Product Interface Picture & sound quality, receptor technology, encryption standards etc

Perceptual Space

Product Interface

Content Programming rights/unique properties/channel rights The Betamax example

Pricing Tariff structures, packages and value

Perceptual Space

Product Interface

Content

Footprint Distribution strengths, retail points

Pricing

Perceptual Space

Product Interface

Content

Footprint

Pricing

Service Delivery Customer stance, customization like ODV/PPV/PVR and EPG Product Interface

Perceptual Space

Content

Footprint

Pricing

Service Delivery

Perceptual Space

Product Interface

Subscriber Management Billing & collection, pricing and packaging, marketing

Content

Footprint

Pricing

Service Delivery

Perceptual Space

Product Interface

Subscriber Management

Content

Finance Customer leasing and long run marketing costs

There fore key take outs

Cable needs to first win battle of the mind before battle of the wallet Work needs to be done at multiple ends acquisition, retention and enhancing the incumbent consumer ARPU

There fore key take outs

Need to generate consumer pull and buzz Need to build tech credentials Develop a human interface Advertising and Service offering in that hierarchy

Issues & Opportunities

Section II How are the dynamics changing?

How are the consumer living room dynamics changing?

Consumer Choice is a function of
There is a content proposition
This includes aspects of Multi channel universe Choice Digital quality picture

There is a technology proposition

This includes aspects of Interactivity Addressability Consumer Perception PPV/ODV/EPG etc

Also
Two kinds of consumer clusters emerging

Similar to a North American/East Asian/Western Europe

Similar to Latin America/C & E Europe/South Asia

Also
Two kinds of consumer clusters emerging
Similar to a North American/East Asian/Western Europe
Will look forward to Tech propositions like On- Demand Video, EPG, PVR, VAS and PPV etc Will be driven by Branding Will drive up ARPUs Primarily urban

Similar to Latin America/C & E Europe/South Asia

Wil l look forward to Basic entertainment experience Will drive volumes Primarily Rural/Semi-Urban

Also
Two kinds of consumer clusters emerging
Similar to a North American/East Asian/Western Europe Similar to Latin America/C & E Europe/South Asia

Profitability game will be played here

Growth and acquisition game will be played here

A relevant soundbyte
In Metro towns where our average revenue per user is better, as our value-added services are consumed largely. Rural markets are important but competitive when it comes to offering the content, as its largely language-driven, with sharp preferences on what they want to watch
Salil Kapoor COO Dish TV Business Standard Nov 11 2009

What kind of innovation is the consumer witnessing

Pricing Innovation
Exemplified by Sun Aggressive stance Aggressive south and Rural outreach

Branding and Technological Innovation

Exemplified by Tata Sky More focus on the higher MHI HHs

Besides

Competition is poaching from us

A hyper active , over aggressive

COMPETITION
We clearly see Cable consumers the right target to go after
Anshuman Pitale COO Sun Direct

A hyper active , over aggressive

COMPETITION
With the impending IPOs of Hathway and DEN , digitization will gather pace. We are sure to gain as the consumer associates us with digital quality picture
Vikram Kaushik CEO Tata Sky

Key Issues

Core Issues specific to a Cable Business

Relevant Consumer quotes

Cow boy companies putting unseemly, overhead wires and jumping over roofs and then hard selling, low quality multi channel television At best they are operational in their mindsets. Can they even hope to understand consumer marketing?

Relevant Consumer quotes

Cable is certainly not the most effective content delivery platform in India. The service sucks, quality is sketchy. For my family I went in for a DTH connection

Perception is the reality for the consumer

Despite having similar number of digital subscriber base to DTH consumers still associate digital with DTH! DVD quality picture and sound is technically possible, but in reality there's a huge difference

Perception is the reality for the consumer

That's because a typical DVD video stream requires a bandwidth of 4-5 Mbps, whereas DTHoperators use only a fraction of that According to satellite monitoring service Satco DX, Dish TV uses 2.45 Mbps to stream movies on HBO, Tata Sky 1.5 Mbps, while Big TV uses a mere 0.1 Mbps!

There fore key take outs

Demanding consumers aggressive competition Digital , interactive services and multi channel universe attributes being aggressively pursued as positioning pegs by the competition

Upshots & Recommendations

Section III Way forward

Our Suggestions

>

Make consumers re evaluate Cable

What does it mean?

Create an understanding of Cable and its services Address the Awareness Issue Communicate the value, stature and desirability of Cable as a delivery medium Use Advertising to lend an imagery of advanced technology, relevance, quality and credibility

Make consumers re evaluate Cable

Our Suggestions

Make consumers re evaluate Cable

>

Create a unified Cable Brand

What does it mean?

What Cable lacks is a consistent Identity and a uniform face Address the Identity Issue Unlock a Positioning and an Image for Cable Address the Positioning Issue

Create a unified Cable Brand

What does it mean?

Unify the fragmented industry work towards a common goal Address the salience issue Make MSO participate / invest

Create a unified Cable Brand

What does it mean?

Local Marketing & sales activities are key MSOs have to complement here A strong Branding has a direct co relation with average subscriber realizations Tata Sky has the highest ARPUs

Create a unified Cable Brand

A good analogy is VISA

Create a unified Cable Brand

Visa is a unified face of a network of partners While VISA is the endorser Brand the small merchant partners complement VISAs marketing activity at the local level VISA however continues to co-exist alongside all the local financial institution brands

Our Suggestions

Make consumers re evaluate Cable

>

Create a unified Cable Brand

>

Generate a always on interface with the consumer

What does it mean?

Have a dedicated retail presence just like DTH players presently this is sketchy Have a direct national Cable Hotline number Build a strong direct response component to the relationship

Generate a always on interface with the consumer

Our Suggestions

Make Create a unified Cable Consumers re - evaluate Brand

Generate always on interface

Widen the product offering

What does it mean?

We become opportunistic as opportunities present themselves. Today we are present in content creation, content delivery, sports networks and properties and whatever the consumer wants Brian Berger/Comcast 4 to 5% of the DTH revenues for example is straight from VAS

Widen the Product offering

The example of Canoe Ventures Upshots from the worlds most aggressive Cable Market

Coming together of the six big cable networks headed by David Verklin (Comcast, TW,Cox, BrightHouse, Cable vision and Charter)

The example of Canoe Ventures

Pools the TV audiences in to one slice able & dice able platform for addressable advertising the consumer side

The example of Canoe Ventures

Will overlay demographic information over cable zones the advertiser side

But most importantly they are going to leverage their customer base this is their killer app
Canoe has set-top boxes in 32 million television households, and those houses, on average, have 1.8 boxes per house

But most importantly they are going to leverage their customer base this is their killer app
Canoe has set-top boxes in 32 million television households, and those houses, on average, have 1.8 boxes per house

That means that Canoe is sitting on top of 57 million boxes. Compare that with the data provided by Nielsens 17,000 national meters.

But most importantly they are going to leverage their customer base this is their killer app
Canoe has set-top boxes in 32 million television households, and those houses, on average, have 1.8 boxes per house That means that Canoe is sitting on top of 57 million boxes. Compare that with the data provided by Nielsens 17,000 national meters.

They are going to bring more accuracy and more data into the TV ecosystem.

But most importantly they are going to leverage their customer base this is their killer app
Canoe has set-top boxes in 32 million television households, and those houses, on average, have 1.8 boxes per house That means that Canoe is sitting on top of 57 million boxes. Compare that with the data provided by Nielsens 17,000 national meters They are going to bring more accuracy and more data into the TV ecosystem

This means they will understand consumer behavior, motivations, the shows they watch and the Brands they buy!

How does Comcast lead the market?

We believe that we have to take thought leadership in Content, Technology and Service

Example of how your favorite Comcast does it

And finally

Create a discriminator basis your strengths

A human interface always at consumers back and call Leverage the relationship at the local operators area Easy installation and localized content Personalized customer care Value for money No down time in bad or cloudy weather

Positioning Platforms that we table for discussions

Positioning Platforms
Life Unlimited & Uninterrupted

Smarter Choice

Dont underestimate the power of Cable

What does EchoStar say?

If you pause to think for a minute the Cable players have a crucial network asset - the last mile between the switch and the home In a market like India , this last mile is a very powerful tool. Not only can it be used for CATV as is the case today, but also fixed-line voice services and crucially broadband internet access services Charlie Ergen

Founder, CEO EchoStar While on his visit to EchoStars Bangalore Sling Media facility Business Line May 4th 2009