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| indiantelevision.com's
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| MANY QUESTIONS
STILL TO BE ANSWERED ON CAS ROLLOUT |
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| (Posted on 12 December
2002 ) |
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Will conditional access prove to be the
one shot medicine for all the ailments that afflict the various constituents
in the Indian television industry and the TV viewer?
Information & broadcasting minister Sushma Swaraj is convinced it
will, and that is why she has been putting all her might behind it,
steamrolling it through the Lower House earlier, and the Upper House
a couple of days ago. Along the way, she brokered peace with the Congress
party and several others who shouted her down whenever she mentioned
the word CAS. |
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A closer inspection of the television industry,
the CATV trade and the CAS bill, and you will realise that conditional
access will not heal the business of its ills overnight like most
magic medical bullets are expected to. Many biological pathogens will
have to be got rid of with their individual medicines.
Analogue or Digital?
For one, there is the question of technology: should India tread the
analogue or the digital path? Digital set top boxes internationally
are incorporating hard disks and in the process storage capability
and they are beginning to do jobs like Internet surfing, organising
the household and the utilities that go with it. In the Indian context,
there is talk of how steep the cost of digital set tops that have
the capacity to incorporate interactive features and the possible
required security (at least Rs 10,000). This huge burden would make
CAS unaffordable to a large part of the 40 million cable TV populace.
Hence the government has decide to wish them away and instead opted
for analogue as the standard which is much cheaper. Expensive digital
set tops will probably make their way in, but only with the crème
de la crème, who can afford the fancy gizmos that digital set-tops
have morphed into.
The "aam juntaa" will have to make do with an analogue set-top which
is expected to cost below Rs 3,000. The government believes that cost
of the box can be brought down even further to as low as Rs 1,500
due to the sheer volumes that will be achieved once demand starts
gathering pace. The size of the set-top manufacture market is estimated
to be worth anywhere between Rs 120 - 280 billion. Manufacturers will
come out of the woodwork; India has entrepreneurs quite skilled in
reverse engineering to make the boxes. Among the names which one has
heard of include: HFCL, Philips, Videocon, Samsung, LG, Catvision,
Scientific Atlanta....
What the government has glossed over though is the point raised more
than once by broadcasters that the analogue STB can easily be hacked
into. It is not clear whether the government doesn't agree with the
broadcasters on this and genuinely believes that analogue boxes can
have safety mechanisms built in or whether it has chosen to deal with
this later. Additionally, the government believes that the common
consumers will continue to stay contented with analogue boxes and
will not upgrade to a digital regime as the services provided around
the digital boxes increase and costs fall. Who will bear the cost
for this upgrade, which will benefit manufacturers: of course the
poor sucker consumer.
As to who would bear the cost of the analogue STB itself, the government
has indicated that various financing plans would have to worked out
so that the entire cost of the STB is not borne by the subscriber
upfront. Coming from the minister, there is more than a hint that
options like renting out of set-tops if a subscriber cannot afford
to buy it outright are to be considered. Will cable TV ops be up to
this, is a question only time will answer.
All systems go?
Then there is the question of what exactly is the encryption system
that will be put in place? Will the consumer be able to use the same
box if he shifts to a new location or will he have to buy a new one?
It is to be hoped that the Bureau of Indian Standards, which has been
given the task of mandating the technical specifications of the STBs,
will ensure that there will be one standardised system. Or at least
have several systems with interoperability without hurting the consumer's
pocket.
As far as the monthly tab the viewer will have to bear for his/her
television fix, the government has envisaged at the very basic level
a two-tier system. It will decide the monthly rates for the free-to-air
channel package. This in itself is no easy task because the government
has indicated that the rates will not be uniform across the country.
Though a lot of talk has centred around the cost being Rs 100, there
is also speculation that the average monthly subscription fee could
be as low as Rs 70. Out of this, Rs 30 will go to the government as
tax.
Regarding the composition of the basic tier, what the government is
saying is that it will only decide the maximum number of FTA channels
in the basic tier and also the genre of channels. An example cited
by Swaraj is that the government will only see that in the basic tier
no specific genre of channels like news or infotainment channels dominates.
That there is a proper mixture of all available channels.
If there is a lot of pay channel operators who would clearly welcome
CAS entry sooner rather than later, it is the quality niche channels.
An HBO, a Discovery or National Geographic; or even a CNBC India or
Star News among the news channels, can really extract their true worth
on the price coefficient if CAS comes into play. And of course the
sports channels. The world over, quality sports has a premium attached
to it like nothing else and that will hold true even in a "sports-dud"
country like India. All these channels provide compelling and focussed
content to their audiences and it is in the CAS regime that their
true worth will clearly be shown up.
Will the viewer bite?
Having said that, even as the industry is talking of individual pricing
of pay channels under CAS, it is highly unlikely that the customer
will be taking his pick from the 100-odd channels that there are to
choose from and making a list that he wants. Bouquets and packages
will certainly be very much in play. A single in demand or premium
channel may well send the cost of a viewer's package soaring. And
there will be many of the latter on offer. At the end of the day,
the success of a broadcaster will depend on how it packages its channels
to the consumer.
But even here, the government has decreed that the price of each channel
will have to be displayed by broadcasters and weaker channels cannot
ride piggyback on stronger channels in a bouquet. Hence if in the
Star bouquet, Adventure One is the weakest channel, then it cannot
hide behind Rs 40 or whatever the price of the package may be but
will have to have a clear price value attached.
What is clearly of worry to the broadcasters is really the general
entertainment channels. One view is that at the end of the day, there
is not that much to choose from between a Star Plus, Sony Entertainment
and Zee TV. And if that were the case the consumer would certainly
take a tough look at pricing. Between paying for a Star Plus or a
Sony, and getting two FTA channels like Sahara and SABe TV instead,
the latter choice would be quite attractive if the pricing of the
pay channels was not kept at an affordable rate. Obviously, while
some may go for the FTA package, the diehard viewers will not allow
pricing to prove a hurdle to their viewing fix.
Will advertisers zero in?
Advertisers have already been playing hardball for sometime now trying
to stretch their not so expansive budgets to the maximum. Complaints
have been aired by broadcasters, advertisers and agencies on the sanctity
of the viewership ratings, depending on whose numbers are looking
bad. A poor and insecure sample, fudging are some of the allegations
that have been hurled against the ratings. With addressability, the
peoplemeters will not disappear, in fact they will adapt to the new
addressable scenario, supporting some of the data that the channels
will provide on penetration and subscriber numbers.
With viewership numbers quantifiable since set top boxes will tell
exactly how many households are accessing each channel across markets,
its is quite likely that advertisers will look at spends and budgets
with even stronger magnifying glasses and demand an even better value
for money equation. On the flip side, advertising in the quality niche
channels will better reflect their real value, as the audiences accessing
them will be easier to qualify.
As a straight fallout of this, expect the entry sooner rather than
later, of international channels like the History Channel and the
Technology Channel. Then there are other channels like Vogue, Fox
Movies and even a channel dedicated exclusively to golf, for instance,
that are likely to look at entering the Indian market.
Who will monitor the cable ops?
The Amendments to the 1995 Act has taken stern measures against irregularities
in the broadcast industry and stipulates that illegal distribution
(read under declaration) of channels will constitute a cognisable
offence.
Each cable operator is supposed to publicise in the prescribed format,
the subscription rates and the periodic intervals after which they
are payable for receiving each pay channel. The bill makes it compulsory
for cable operators to declare details of the total numbers of subscribers
and subscription rates not only to the state government, but also
the Central government. Any offence is a cognisable offence as per
the amendments made. All this is of course just so much words if there
is not a rigorous policing mechanism in place. How this will be managed
has not been spelt out as yet. Will it be through the local post office
or will a special mechanism/infrastructure have to be set up to ensure
that quarterly subscriber figures are given out by both cable TV ops
and broadcasters? If there are transgressions, who will be ensure
the errant are brought to book? Who will decide the penalty?
What is needed really is stringent enforcement and close scrutiny
of the subscriber management systems that the MSOs put in place. Because
if the cable trade is allowed to get away with fudging the number
of set tops they have seeded and who is accessing what channels, then
we would be back to square one.
What's in it for the government really? That there will be a quantum
improvement in revenue collection of entertainment tax and the five
per cent service tax on cable TV where addressability is built into
the system is something everyone agrees to. But for this to really
benefit the government in value terms, accountability will need to
be brought in as to the revenue collections vis-à-vis what is owed
to the government.
All in all, whatever the critics may say, it must be admitted that
Swaraj is trying to bring in a system which she believes in the long
run is the most fair to the consumer and also the industry as the
shakeout will take care of smaller irritants in the form of smaller
cable ops.
As far as the actual rollout is concerned, the government would like
it to happen at the earliest. But the specific rules for the new way
of showing, or watching cable television are yet to be formed. That
according to industry observers should take between 14 days to a month.
Once that has been done the notification will go out and then it should
take between 12 to 18 months for the metros and bigger cities. And
for CAS to become the norm across the country? At the most optimistic
reckoning, twice that time frame. Zee Group chairman Subhash Chandra
has said though he expects the whole process to take between five
to six years.
The CAS road is certainly one with a whole load of ifs and buts for
all the players involved. In the long run though, everyone accepts
that this is probably the best way to bring order into what still
is a very chaotic business. |
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