Media sector update - Geojit BNP Paribas Financial Services

- The Ministry of Information and Broadcasting has extended the Phase 1 pay TV digitization deadline by 4 months to 1 November 2012.

- Digitisation statistics show that the extension was inevitable because only 25% of subscribers had digitized by 1 June.

- Digital subscriber additions have picked up in the past few weeks as the deadline in the metros was 1 June.

- There has been significant regulatory push for digitization and hence, it seems that the digitization process is unlikely to get derailed this time.

- Digitisation is a long term structurally positive theme for the TV industry and Sun TV and Zee are good plays on the digitization theme as they are cash generating broadcasters.

- The companies do not have to incur any capex on digitization, but they are well positioned to monetize their content batter in the long term.

- India has about 89 million analog cable TV homes, representing two-third of pay TV market.

- The government has set a pan India analog cable sunset date of 31 December 2014.

- In phase 1, a total of about 13 million subscribers need to be converted to digitization, of which 25% have been converted so far.

- Of the four metros, Mumbai has achieved 40% conversion, Delhi, Kolkatta and Chennai have achieved 20%, 20% and 13% respectively.

- The statistics reveal that the potential is so large.

Source : Equity Bulls

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