Repositioning by Tata Sky

The second largest DTH player is way behind the market leader in subscriptions. But it is pushing value-added services to maintain its leadership in average revenue per user
Just a week back, Tata Sky did something which it has been avoiding so far – the company slashed prices of its value-added offering Tata Sky+ by almost 50 per cent to Rs 4,999.
Though a limited period Diwali offer till October 31, the move surprised many as the second largest Direct-To-Home (DTH) player by subscription has always been focused on the average revenue per user (ARPU) instead of just adding numbers.
That’s the reason why the 80:20 joint venture between the Tata group and Star TV has priced even its base service at a premium over its competitors. So while market leader Dish TV is way ahead with 5.7 million subscribers, Tata Sky and Sun Direct are tied in the second spot with 4 million subscribers each.
But analysts say Tata Sky’s ARPUs are 60 per cent higher than its competitors. So that explains the reasons for the Tata Sky+ price cut. Company executives say it’s a first anniversary gift (the personal video recorder service was launched a year ago) and is in keeping with the company’s strategy to shift as many existing base subscribers as possible to the value-added service so that ARPUs don’t suffer.
That focus is visible in its aggressive brand-building exercise for Tata Sky+. For example, the company has launched almost one creative a month in the last 10 months, all with actor Aamir Khan and Asin, the south Indian actress who is now a national ‘star’ following Gajni.
The creatives were part of a campaign aimed at promoting the premium service. One of the major creatives was an Aamir Khan solo, where the benefits of the service were described, including the recording capabilities and interactive channels like gaming, quizzing and kids’ programs among others.
Tata Sky+ offers a personal video recorder with over 45 hours of recording capabilities.
Prior to Asin, Tata Sky had signed up model Gul Panang who acted with Aamir Khan in a series of campaigns last year that highlighted the digital quality and technology of Tata Sky, with Aamir pausing a match to talk to his in-laws, while Gul Panang explained the technology. The campaigns made the jingle ‘isko laga dala toh life jinga la la’ almost like a national anthem. These creatives were made by Ogilvy & Mather (O&M).
Down south, the Asin magic worked. In one of the ads, she calls up a Tata Sky call centre seeking a replacement for her maid, ‘Kupamma’. The campaign drives home the point that the company replaces set-top boxes during the guarantee period.
Quoting a AC Nielson study, Tata Sky has a “loyal customer” base as users feel the company has met expectations. “We deliver what we promise, and we don’t promise what we cannot deliver.”
Tata Sky has 12 transponders (capacity on a satellite) that permits it to broadcast over 180 channels, compared with just 7-9 transponders of other players.
Industry analysts admit that Tata Sky campaigns have done wonders to boost its premium image, but are quick to add that the industry itself has been growing at a rapid pace and even new entrants like Big TV and Airtel have garnered over a million subscribers already.
Tata Sky also had its part of misses. Not partnering for the Indian Premier League (IPL) last year was a big miss. The company launched ad campaigns 20 days before IPL to make good the loss.
There are other ways too for brand building. Bombay Scottish School, for example, is one among the 850 institutions that uses Tata Sky’s DTH services in class rooms. The company has offered its connection free of cost under what it calls a social responsibility exercise. But social responsibility and brand promotion can often go well together.–