|
He began his session by giving a brief outline of the prevailing
scenario of the Indian cable industry, substantiated with
facts and figures of studies conducted over the years. He
stated that--
* In the past 12 years, the Indian cable TV industry has grown
from zero base to approximately 45 million homes.
*The Indian Readership Survey had revealed urban cable penetration
to be approximately 84.7per cent and rural cable penetration
to be about 32.7 per cent.
* For the past 3 years, the Indian Cable TV industry was plagued
with blackouts by broadcasters, protests by customers and
a worsening financial situation due to frequent rises in pay
channel fees by broadcasters.
*The broadcasters, on the other hand, accused cable operators
of under declaration to justify both blackouts and frequent
rises.
Explaining how all these problems will come to an end with
the passage of the Conditional Access System regulations in
the Cable Act, he went on to say that -
- In a revolutionary step, Parliament has passed a crucial
amendment to the Cable Act 1995 in December 2002 mandating
compulsory use of set top boxes by pay channels and restoring
choice of viewing television to 45 million cable homes.
- By this regulation, the viewer will now pay for only those
channels actually watched by him as per norms accepted world
over.
- The present scenario of forced bundling of weak and unwanted
channels with popular channels and arbitrary rate increases
by broadcasters will soon end to the relief of customers.
- The government has opened the way for orderly growth for
the 45 million home cable industry which employs lakhs of
people in this service sector. This industry provides information/education
and entertainment to lakhs of viewers in the convenience
of their homes.
Giving a brief outline of what the CAS Revolution would be
all about is and the technology it would entail , he spoke
about the digital and analog set top box ( STB) and its features
. He stressed on the following special features of Digital
STBs
* Interactive content and data services reach the television
sets
*Advantages of the versatility offered by the digital format
* More Channels
* Better sound quality
* Operators need to protect their revenue stream
Commenting on the quality of transmission he said it would
be --
* Similar to comparison between DVD and VHS
* The viewing experience will be the difference one experiences
between colour TV and digital TV.
*Sharper pictures.
* Clearer sounds
He also added that with the present pay channels number being
32 (many more expected in India), the cable operators will
be left with 29 channels for free to air whereas MSOs like
IMC can give at least 70 free to air channels.
In addition , extra channels capacity will be available for
value added services viz. Internet, Video on demand, email/
SMS, telephone, games on demand, electronic program guide,
pay per view and mobile messaging Internet advertising. Bringing
to light how CAS would benefit the consumers stand to benefit
because --
- He chooses what he wants to watch
- He pays only for what he watches
- Higher quality of Services at International Standards
· Clearer pictures and stereophonic sounds to give a Richer
Experience
- Over 500 potential channels
- He is not faceless anymore
- Needs are heard and attended to
On how Broadcasters would benefit with CAS --
- Full declaration
- Added features like Pay Per View - now consumers can
view sporting events, movies and other hit programs at their
convenience. All they need to do is pay a fee and avail
of the content
- Video on Demand - Now Archived footage of events that
consumer missed / replays will be available for viewing
- Better communication with the consumers
- The needs of the consumers will be easier to map.
- Their needs will be addressed more effectively .
MSOs benefit because:
- Transparent system leading to Full declaration
- Commission for distribution creates a viable business
model
- Build a platform to launch value added services like
Pay per view, Video on demand, Internet telephony, Gaming,
Home-shopping etc
- Data-mining / Harvesting
- Focused Marketing efforts Operators enjoy
- Longevity and security assurance
- Stay in Business
- Cemented relationship with the consumers
- Beneficiary to launch of new services
- Additional revenue streams with new services
The Government Benefits:
1. Under the Cable Act, cable operators are enjoined to carry
out Government directives on sensitive content issues. Under
CAS, this mandate will be easier to implement.
2. Benefits of full declaration will result in higher Income
Tax, Service Tax and Entertainment Tax collection by a huge
margin.
Speaking on contentious issues like consumer concerns he
said that the government and the information and broadcasting
minister have clearly declared their concern to keep customer
concerns paramount in mandating the implementation of CAS.
The Indian cable TV industry is in full agreement with this
intention of the government and promises to take all steps
necessary to ensure that customer interests are kept as the
primary focus.
Regarding the issue of whether the problem of undeclaration
will be resolved by CAS, he said that it is quite clear that
the opponents have not appreciated the stringent provisions
of the new section of the amended Cable Act. The amended provision
mandates the operator to maintain full records and the government
is entitled to verify the records at any time. Any act of
omission will be a cognizable offence. Service tax on cable
industry has been notified with effect from August 16 2002
and the service tax authorities are also entitled to inspect
all records. They have already started surveys in Mumbai and
Delhi.
Talking about the issue of government fixing the rate of
free to air channels he explained that it was actually a consumer
friendly measure to help the consumer get free to air tv channels
at the cheapest possible price. "We expect the average price
to be about Rs. 100 and after deduction of Rs. 30 as entertainment
tax; the balance left will be Rs. 70 for 35 channels which
is the lowest in the world," he added.
Regarding who will bear the cost of the set top box, he stated
that the cable is a service industry like electricity or cellular
mobile. The customer bears the cost of the electricity meter
or the mobile instrument. Obviously the customer will bear
the cost though the MSOs/cable operators can help source them
cheaply through STB suppliers and banks. The cost of the subscriber
management system and conditional access will naturally be
borne by the cable operators/MSOs.
Highlighting the pending action that need to be taken he
stressed on the Indian cable TV industry requests' of an early
action of the Ministry of Information and Broadcasting on
the following issues:
- After the notification by Government for mandating conditional
access in the 4 Metros in January 2003, a couple of meetings
of the implementation task force have been held. Unfortunately
they have not yet resulted in finalization of various contentious
issues specially relating to free to air pricing, genre
based programming. The task force must announce the FTA
price and decide on other related issues latest by March
31.
- Unfortunately the cable industry's logical and reasonable
plea for duty reductions has been ignored despite assurances
from the Ministry of Finance that a sympathetic view would
be taken as the benefit of duty reductions would have resulted
in more acceptable cost of supply of STBs making cost of
delivery of pay channels cheaper to the customers.
- As government has decided to fix a maximum retail price
for free-to-air channels, it should, in fairness have frozen
all current pay channel rates as on 1/1/2002 till CAS comes
into effect in the various cities.This was not done leading
to threats by a major broadcaster to switch off World Cup
transmissions recently.
- In the last two months there has been agitation by consumer
organizations in Mumbai wanting reduction in the total package
from Rs 350 to Rs 150. This matter is subjudice in the Mumbai
high court and hence no direct comments are offered. However
it should be known to the audience that Pay Channel costs
amount to Rs 220 per subscriber and with Rs 45 of taxes
including Entertainment and service tax, it is not possible
for MSO's to provide Pay channel service at Rs 150.
- In a reply to a starred Parliament question, the honourable
minister for Information and Broadcasting on 20/02/2003
stated that subscription disputes were to be decided by
the market place and there was no provision for regulatory
intervention. One cannot disagree with this contention but
at the same time pay channels should exercise restraint
in raising pay channel prices at this stage when customers
have become increasingly resentful of paying higher costs.
- Once CAS comes into force, the broadcasters will have
to persuade the customers to subscribe to pay TV channels
on the strength of attractive content and value for money
pricing.
- Issue of entertainment tax levied by state governments
is another area of concern for the Cable TV industry. Currently
it varies between zero in Himachal Pradesh to Rs 30 per
subscriber in Maharashtra. The CAS regulations give a choice
to a customer to opt for only FTA or some pay channels or
the entire bouquet of pay channels. In near future video
on demand and pay per view will be technically possible.
In such a varied scenario, it would be necessary to link
levy of entertainment duty to the category of service provided
to the customer.
- The CAS regulations have already led to the issue of guidelines
for both analogue and digital set top boxes by the Bureau
of Indian Standards. The Cable TV industry has already started
surveying customer demand and is in readiness to provide
set top boxes as per the need of the customer. The mantra
has to be affordability to the customer. It is not necessary
to mandate either of the two technologies.
He concluded his presentation saying that, " the challenges
of CAS have to be met not only by the cable industry, but
all the stake holders including broadcasters, government and
even the consumer".
|
