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Ø The four metros account for only 15-17 percent of the
total 40 million cable subscribers in India. Since the top three
networks do not derive any significant advertising revenues from
the Chennai market, the effective share of the three metros in total
C&S homes is just 10-12 percent.
However, their implied share of advertising revenues on C&S
television would be closer to 20-24 percent. If one assumes only
40 percent penetration of boxes in the four metros in the initial
phase, about 12-14 percent of the advertising revenues might come
under threat.
Ø Box offtake is likely to be higher than expected, Motilal
Oswal points out. An analogy can be drawn with the Indian cellular
market where the subscriber numbers are growing at about a million
every two months. In fact, the market is expected to add about 10
million subscribers in the next year, the level reached over seven
to eight years.
Ø Broadcasters (including Zee) are open to floating a mass
general entertainment channel to maintain their presence in the
basic tier. A new channel can be packaged, branded and floated (using
library content or second run programming from the pay channel)
in just about a month at a low cost of about Rs 100 million. This
would help avert any loss of advertising revenues because of a drop
in reach due to low box penetration.
This would also ensure that the broadcaster has its brand present
in the basic tier homes to maintain and build recall and to give
viewers a laddering option to graduate to their respective pay offerings
when they upgrade to a pay channel. Broadcasters will in all probability
run teasers on the FTA chanel to lure them to the pay TV service.
Off the record conversations with television professionals have
revealed that most of the entertainment channels are actually looking
at creating a FTA channel, which would have second run programming,
that is, Zee TV could float a Zee Basic which will air shows that
will do the run on Zee Premium first.
Motilal Oswal CAS report:
Cable optrs to be affected
Motilal Oswal report claims
CAS unlikely to affect Zee Telefilms till 3FY04
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