Will the Indian consumer bear the brunt of CAS?

MUMBAI: Will the Indian consumer get a raw deal after the implementation of the conditional access system (CAS) Experts, who beg to differ with the popular positive perceptions, claim that the passage of the Cable TV (Networks) Regulation Amendment Bill 2002 is actually punishing the Indian consumer and viewer. They have raised questions about the implementation of CAS in India and add that it is very different from what happened in the developed markets.

During the implementation of CAS in the developed markets such as the US, the consumer was never asked to invest in the set-top boxes (STBs) as the cable operators bore the burden. Also, the consumers were treated to superior content offerings post CAS. The pay TV channels that showed the premium content did not air any advertisements and avoided commercial interruptions. None of this seem to be happening in India, say experts.

Cable TV consultant Harsh Deshpande, who worked in the United States as a cable TV executive with AOL-Time-Warner, says: "CAS was conceived in the US as a way in which incremental revenues could be created for the cable operators and the producers of content. The consumer never paid for the consumer premises equipment and the cable operators bore the burden." Deshpande is a consultant to, a video-on-demand company in Atlanta, and is exploring entreprenuerial opportunities.

The Indian cable operators however haven't considered bearing the brunt of the investing in set-top boxes on behalf of the consumer. Their issues are primarily related to providing the required number of STBs; and other technology aspects such as Head-end in the Sky (HITS) or head-end on the ground.

Zee Turner chief executive Sunil Khanna says: "The duty on STBs is as high as 58 per cent at the moment. Though, the I&B minister has assured us that she will take the issue up with the finance minister. The price of digital STBs will be around US $ 40. In digital mode, the quality of viewing will make lot of difference and more number of channels will also be available to consumer in the basic tier and pay mode."

Questions are also raised about the willingness of the consumer to invest in the above amount. Several merchant bankers have already predicted that consumer financing of the STBs would be a great opportunity for banks and financial institutions. However, other analysts have rejected the theory as they believe that STBs don't have a resale value, unlike other consumer goods.

Cutting Edge Media MD Rohinton Maloo adds: "If the government is saying that the consumer is under threat of rising cable subscription rates, which are still much low in India compared to other countries, then how is it being assumed that the same consumer will fork out more money for STBs?"

Maloo may have a point - the instance of a posh colony in Delhi's Vasant Kunj can be cited in this regard. Last week, the residents' welfare associations decided to oppose the raising of the monthly cable subscription fee to Rs 360 per month. With the cricket World Cup round the corner, the VK Cable service providers thought it a fit time to raise the subscription money much to the chagrin of the consumers. The residents went without cable for a few days as mark of protest. They demanded that the monthly fee should be in the range of Rs 200 as some other areas in Delhi; other areas are paying anything between Rs 75-150 per month.

JP Morgan India's report on the Indian cable industry titled: "CAS: The Medicine for a chronic ailment" points out that the consumer opting for pay channels would have to pay more if they don't make an outright purchase of set-top boxes. It also envisages that the consumer in North India who is paying Rs 200 could end up paying Rs 275. It adds that broadcasters could have to eventually reduce bundling and the individual channel rates.

Khanna adds: "Customers could decide what they wish to see on their TV sets and could plan their spend on cable in line with their budget." But will the price-conscious customer be willing to pay for the STB as well as the recurring monthly expenses is something that no one knows.

AC Neilsen ORG-MARG's consumer study reveals that some channels will find easy acceptance into homes even at high prices, but others may need to turn free to air. This theory is being supported by I&B minister Sushma Swaraj.

AC Nilesen ORG Marg's team arrived at a brand equity index, BEI, for each channel. The index reflects channel awareness, availability, appeal and value for money.

With no surprises - Star Plus tops the list, with the 'sabse tez' Hindi news channel Aaj Tak following suit. Special interest channels like Discovery and sports channels also got an impressive BEI too.

The quality of content in the post-CAS scenario is also an important point for consideration.

"In the US, broadcasters actually offered a solution to the cable operators who wanted to increase their revenue streams by creating a premium tier that wasn't under the US government's purview. In India, the same fare that was offered earlier will be given in the post-CAS period," adds Deshpande.

Zee's business head (Zee Cinema and Music) and part of the group's core management team Yogesh Radhakrishnan feels that the charges for premium content could actually be in the range of Rs 1500-2000. Several Indian broadcasters have already started thinking of creating premium content and charging the discerning consumers higher rates.

In the US, the cable operators are keen to split revenues with the producers in an effort to improve the quality of content. The large studios such as Time Warner, Sony, Fox and MGM, many of which have cable assets, are able to extract a good revenue-sharing bargain from the broadcasters and the cable operators.

In India, the cable operators are unwilling to share revenues with the broadcasters and the producers. Also, there are no large studios that own a massive library of programmes. The Indian cable operators have nothing to do with the content offered by the broadcasters or the producers.

Eventually it all boils down to the cost as the Indian consumer is always going to be concerned about costs.

Zee Turner's Khanna reasons: "The scene of prime band & non-prime band will also be eliminated. Those who cannot afford the pay channels will be able to get free to air (FTA) channels at Rs 40-50 per month, plus entertainment tax and service charges that totals up to between Rs 90 to Rs 100 per month."

Also read

Interview with Harsh Deshpande-media specialist

Latest Reads
US$ 4.5 bn expected from IPL rights; SC recommends accounts scrutiny

The Supreme Court on Friday froze all financial transactions between the BCCI and state cricket associations by directing the apex body not to disburse any funds till it resolves to abide by the Justice RM Lodha panel recommendations on reforms by 3 December . The top court ordered that none of...

Television TV Channels Sports
TVS Tyres is co-presenter for Asian Champions Trophy 2016

Continuing its strong connect with sports, TVS Tyres has associated with Asian Champions Trophy 2016 by becoming the co-presenter. The Asian Champions Trophy is one of the premier hockey tournaments, a much sought after annual international competition promising some great hockey action. This...

Television TV Channels Sports
Q2-17: Zee Learn declares maiden interim dividend

The board of directors of the Essel group’s education company Zee Learn Limited (ZLL) have declared a first time ever dividend of 5 percent per equity share of Re 1 each for the quarter ended 30 September 2016 (Q2-17, current quarter).

Television TV Channels Factual & Documentary
Whether BARC action can stop unethical practices?

MUMBAI: Can businesses and industries practise their art of selling fairly although they have 'Fair Practices' training during academic courses, workshops and several ISO and other certifications? There seems to be the fear of the lawman, and not the law in India. If the traffic cop is watching,...

Television TV Channels Viewership
TV Superhighway: beIN, Yaddo, AfricaXP have joined us, says Magine CEO Ambuj Goyal

CANNES; Magine has secured partnerships with four of the industry’s most exciting sports, documentary and entertainment content providers. Partnerships with beIN, the international media group and owner of MIRAMAX; Yaddo, the new documentary streaming service headed up by former head of The BBC’s...

Television TV Channels Factual & Documentary
Colors emerges strong on strength of Naagin I & II

MUMBAI: One of the top rated shows Naagin Season 2 helped Colors reach a top-ranking position.

Television TV Channels GECs
Pakistan Broadcasters Association to oppose PEMRA Indian content ban

MUMBAI: The Pakistan Electronic Media Regulatory Authority (PEMRA) shocked both Pakistan and Indian broadcasters when it issued an order blanking out  all Indian content from Pakistan’s television channels on 19 October.

Television TV Channels GECs
Sony Pix to telecast 'Jurassic World' on 22 October

Sony Pix will take the viewers on a thrilling, adventurous journey with cloned dinosaurs in their Billion Dollar Premiere property. The channel plans to air Jurassic World on 22 October at 1 pm and 9 pm.

Television TV Channels English Entertainment
Sony AXN scripts deal with Pinewood; buys stake in SVOD service Hopster

Folks at Sony Pictures Television (SPT) are in a celebratory mood. Not only has it signed a six-series deal with Pinewood Television but has also acquired a minority stake in the London-based video subscription service for kids content - Hopster.

Television TV Channels English Entertainment

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories