Personal video recorder pays well for Tata Sky

Vipin Bajaj - Televisionpoint.com | New Delhi
Vikram Kaushik, chief executive officer and managing director, Tata Sky, counts among his favourite recorded programmes - US President Barack Obama's first address to the nation, Sachin Tendulkar hit his 44th one-day century, breaking Brian Lara's record along the way.

What has made these possible for Kaushik is his Personal Video Recorder (PVR), which his company brought into the market a year ago branding it Tata Sky+. "According to a study by NDS in America, it is the third most indispensable household item, after the washing machine and the microwave oven," he said.

His Direct-to-Home (DTH) consumer base has crossed four million in just three years. He added that the numbers are not really the measure of success; rather it is the fact that Tata Sky's average revenue per user is 60 per cent higher than that of its competitors.

A year ago, Tata Sky launched the PVR at Rs 10,000. Price not withstanding, Kaushik said they have logged in over 50,000 users who are as he says "hooked". He added that price was not the hurdle, as users always find budgets to suit what they consider useful.

"A user needs to be re-assured that a new product is useful, has value and has great technology. So advertising does not work as much as demos and actual use works. So the challenge now is to sell the concept further and explain what the recorder can actually do like record live TV and pause and rewind live TV and that it is not a DVD player," says Kaushik.

In a bid to push sales on the first anniversary of the PVR, Tata Sky has slashed prices by 50 per cent on the PVR. In less than ten days, 4,000 new users have come on board, of which a substantial number are going in for the second PVR. The target is to convert 8-10 per cent of their current subscriber base in a year to Tata Sky+.

Meanwhile, Kaushik also explains that Tata Sky will never take its eyes off average revenue per user (ARPU) in a bid to get more subscribers. "The DTH market is not a volume game-it's about getting higher ARPUs (average revenue per user), which in turn helps to cover the subscriber acquisition costs as fast as possible." said Kaushik.

This explains the company's strategy to focus more on Tata Sky+, while continuing to add subscribers for its base service, which is also at a premium over services of other players. It has recently slashed the price of Tata Sky + by Rs 4,000 from Rs 8,999 to Rs 4,999.