The Tata Group promoted company's revenue from operations declined by more than 4% to Rs 4,304 crore, while expenses increased by 1.47% to Rs 4,761 crore.
Tata Play's DTH business slipped into a net loss of Rs 247 crore in FY24 against a net profit of Rs 20 crore in FY23. Revenue from the DTH segment dropped 7.45% to Rs 3,983 crore.
The company faced heightened competition in its DTH business, which contributed to the widening losses. Despite this, Tata Play's broadband business saw a narrower net loss and a 27% increase in revenue. The decline in DTH revenue is expected to be offset by growth in broadband and over-the-top (OTT) services.
As of now, there are four pay-for-use DTH service providers and one free-to-air service provider in India. The major DTH operators include — Tata Play (formerly Tata Sky), Airtel Digital TV (Bharti Telemedia), Dish TV, and Sun Direct.
Additionally, there's a free-to-air DTH service called DD Free Dish, operated by Prasar Bharati. These providers collectively cover more than 95% of the total pay TV viewing universe in India.
Tata Play's widening losses can be attributed to several factors:
1. Increased Competition: The DTH (direct-to-home) TV distribution market in India has become highly competitive, with multiple players vying for subscribers. This intense competition has led to pricing pressures and reduced margins for Tata Play.
2. Content Costs: Acquiring and broadcasting content (such as TV channels, movies, and sports events) involves significant costs. As Tata Play expands its offerings, content acquisition expenses have risen, impacting profitability.
3. Subscriber Churn: High subscriber churn rates (customers switching to other DTH providers or cord-cutting) affect revenue stability. Retaining existing subscribers and attracting new ones is crucial for sustained growth.
4. Regulatory Changes: Regulatory changes in the broadcasting industry can impact DTH operators. Compliance costs, license fees, and other regulatory requirements can add financial strain.
5. Shift to OTT Services: The rise of over-the-top (OTT) streaming services (like Netflix, Amazon Prime Video, and Disney+ Hotstar) has affected traditional DTH subscriptions. Consumers now have more choices, leading to a decline in DTH viewership.
6. Infrastructure Investments: Tata Play's expansion into broadband services and infrastructure investments (such as upgrading satellite transponders and set-top boxes) require substantial capital expenditure.
In summary, Tata Play faces a challenging landscape with fierce competition, changing consumer preferences, and rising costs. Addressing these issues will be crucial for improving profitability.
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