Star looking to reducing bouquet price

MUMBAI: In what could be turn out to be a masterstroke in public perception management, the Star Network is likely to reduce its network rate price from the current Rs 40.50.

Though clarifying that a final decision on this is still to be taken, Star India CEO Peter Mukerjea said Star was seriously examining the modalities of how to manage revenues within a lowered subscription price regime.

Queried as to the reasoning behind such a dramatic shift in strategy from the current norm, Mukerjea said the lead broadcaster was responding to market dynamics. There was a very real perception from within both the government and among consumers that "broadcasters are hiking their subscription rates too frequently and too arbitrarily," Mukerjea said.

Star's opting to only concentrate on increasing declared connectivity will make distribution head Tony D'Silva's target to get declared connectivity up to 9 million by the end of June 2003 a far more realistic proposition than would have been possible if there had been a hike to Rs 50 as was the industry speculation. According to D'Silva, Star is currently at 6.5 million paid subscribers and is aiming to hit 7 million by December-end.

Mukerjea has gone on record earlier as saying he would be willing to drop rates if cable operators significantly increased declarations. If Star does go in for a rate reduction, then Star will be sending out a clear signal that it is literally willing to put its money where its mouth is on the issue.

This move could actually work in Star's favour in more than one way.

Firstly it would pull the bottom out of the argument among cable operators that the reason they are forced to underdeclare is because of the constant price hikes by broadcasters. Secondly it also throws up the possibility that consumers who have "had enough" of increases pressurise their cable operators to opt for particular bouquets rather than the whole basket of channels as is the case currently. Star then becomes the first preference bouquet in all permutation combination calculations, is the reasoning.

It also sends a very positive signal across to the mandarins in the I&B ministry. And with the government clearance for its news channel still awaited, that is certainly an important consideration.

Of course, there is the fact that with nothing new to offer in the near term and with cricket World Cup coming up, it would probably be counter-productive for Star as far as getting declarations up to hike rates at this juncture.

What such a move also does is seriously impact its rivals' plans as far as increasing declarations is concerned.

The SET-Discovery plus HBO price package, at Rs 55, which initially looked extremely well considered, would now be perceived as pretty steep. Still, the addition of HBO to the bouquet may well make the difference now as far as pushing up connectivity at this price at an all-India level is concerned. And the fact that Sony has the biggest television event of them all, the ICC World Cup in March, on the platform, will definitely go a long way towards "convincing" cable operators to cough up more.

What will further convince the trade is if Sony can sew up the deal for a news channel and a music channel that it needs to complete its bouquet. It is still not certain as to whether it will be Aaj Tak or Prannoy Roy's soon to be separate from Star NDTV that will come aboard though.

And as far as the music channel is concerned, MTV looks the most likely bet. MTV's kid sister channel Nickelodeon will continue on the Zee platform though as there is still a contract in place.

Talking about Zee, industry sources assert that what is holding up Zee's announcement on its new rate card is word from Turner whether it is feasible to get HBO's sister channel Cinemax onto the platform. The status on that should be out by the end of this week.

The issue appears to centre around whether there will be enough fresh titles to showcase on the channel. Star Movies and HBO have more or less sewed up the market between them.

If Turner gives the all-clear on Cinemax, then an announcement on subscription rates can be expected from Zee by Monday next. The information available to (reported on Saturday), is that if the Cinemax issue is clarified then the bouquet price of the network for all its channels (which will soon include UK-based Realty TV and CNBC India as well) will be Rs 60.

And what of ESPN Star Sports, the first to announce what can only be termed a seep hike of 33 per cent to Rs 32? Enforcing this in the current scenario looks a tough task to say the least.

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