The benefits of the CAS Bill would be:
a) to ensure transparency of connectivity, which is absent today;
b) to enable consumers the choice of selecting the channels, which
is not possible in the present structure;
c) price the FTA channels uniformly and in an affordable manner
such that consumers are not overcharged, nor does the cable operator
lose out in the process, it is likely to be not more than Rs 50
d) most important, ensure a fair share of consumer spend to broadcasters
and MSOs and cable operators.
With the cable subscription industry growing to more than 70 million
homes and Rs 230 billion by 2007, in line with international trends,
the broadcasters with even 50 per cent penetration of CAS, receive
more than Rs 100 billion of which 80 per cent will come to the broadcasting
industry, and the remaining 20 per cent being distribution margins
(between cable operator - CO - and MSO).
In FY2002, the Zee Turner bouquet of 16 channels received subscription
revenue of approximately Rs 1.3 billion. In five years time, with
50 per cent penetration of CAS, even at the same average price of
Rs 2.6 per channel, the revenue would increase to Rs 18 billion,
representing a more than ten-fold increase in revenues. However
if we project price increase in line with industry trends, the revenue
accruing to Zee could be much higher.
Even in the CAS regime, in line with international practices, the
bouquet concept will prevail with each broadcaster offering different
bouquets of channels on a published price list and giving price
discounts for channels volume subscription.
Besides, in pricing terms today, consumers receive 16 channels
of Zee Turner at an average price of Rs 2.6 per channel, as compared
with Rs 8 per channel for Star, and Rs 6.8 per channel for Sony-Discovery-CNBC.
Therefore in affordability terms, the Zee Turner bouquet on current
pricing would have a significant edge over competing bouquets.
Even though the government has initially specified a six-month
time-frame from the date of gazette notification (not yet notified)
for seeding the set top boxes (STBs) in consumer homes in the four
metros, such time frame depends on the availability of STBs in large
numbers, and can be extended, since it may take anything up to five
years to seed 35 million STBs in a 70 million C&S home market.
Siticable, a wholly owned subsidiary of Zee is the largest MSO
in the country and would present a significant first mover advantage
to Zee in the seeding of STBs compared with other broadcasters and
It is the opinion of Zee Telefilms' management that the consumers
spend has gone up in last 12 months to an average of Rs 350. (The
cable operators smartly increased the prices to the consumer saying
that they have to pay Rs 170 per home to pay channels as per current
a) Zee Turner bouquet: Rs 42
b) *Star bouquet: Rs 40
c) **ESPN Star bouquet: Rs 24
d) ***Sony Discovery bouquet: Rs 40
e) Modi (FTV, DD Sports etc): Rs 24
TOTAL: Rs 170
Actually the cable operator is paying a fraction of the Rs 170
The CAS will be positioned as a money saving device for middle
income households and will be positioned as obtaining value added
services for upper income households.
The cost of analogue STBs is just Rs 1,500 and Digital Boxes will
cost Rs 4,000 each. The cost can be absorbed by the household for
a lease rental of Rs 100 pm.
Since the Cable operator currently is making a net margin of Rs
150 - 200 per month he will have to support the CAS (if Government
allows only Rs 50 for FTA channels)
Some of the pay channels, which are either out-priced or are being
pushed at present with a driver channel (Hindi / Regional language)
are likely to lose out revenues as they may go up in tier 2, 3 or
4 as per demand.
There is hardly any cable market in the world, which does not work
In the short term, Zee's view is that the status-quo will be maintained
as the government have to state the price of FTA channels and the
intent clearly is to implement CAS over a longer period. The first
phase is given as six months in four metro cities. There will not
be any negative impact on advertising or pay revenues but it will
have positive impact in medium and long term.
*The Star bouquet now costs between Rs 30 and Rs 40 depending on
the level of declaration by the cable operator
**ESPN Star Sports has hiked its rates to Rs 32
***Sony-Discovery bouquet is now priced at Rs 55 with the addition
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