IndianMascot
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“What impressed us was that they were going up against some of the biggest companies in India — Reliance, Airtel, Tata — and winning,” says Jeff Sagansky, the former Sony TV and CBS exec who formed Silver Eagle Acquisition Corp. with Harry Sloan, former MGM chair and founder of Europe’s SBS Broadcasting. In April, Silver Eagle took Videocon d2h onto the Nasdaq, where it raised $325 million.
The influx of cash was welcome to both the highly diversified Videocon parent company (petroleum, manufacturing, retail) and Videocon d2h, which is spending freely to grow both its number of subscribers and channels. Advanced discussions with the Hollywood studios include plans for proprietary content.
In recent presentations to analysts, Videocon, and its 31-year-old executive chairman, Saurabh Dhoot, unveiled net subscriber additions of 1.7 million year over year to March 2015.
The gains come at a price. Deputy CEO Rohit Jain, who oversees the company’s financial and programming strategy, says the cost of acquiring subscribers is about $30 per head, and total capital expenditure is running at $110 million per year. New subs have accounted for 30% of all incoming DTH subs in the past five years.
Jain says cash flow should soon appear as bottom-line profits.
But what gets analysts really excited is the potential for far more growth: Indian consumers are signing on to video services in ever greater numbers, as greater wealth begets more media consumption. (Literacy and newspaper readership levels are growing in India, as are the number of TV households.) Even better for Videocon, such gains are taking place fastest in rural areas, where DTH has an advantage over cable.
Global Investors Bet on India’s Videocon d2h Direct-to-Home Service | Variety