CAS to sound death knell for bundled bouquets?

MUMBAI: Post-CAS, will bundled bouquets become a no-no? That is what what the future holds, at least in the big cities, say some industry veterans. 

Negotiation-based revenue models will give way to rationality and reasonable pricing following the implementation of the conditional access system (CAS) in India, Fifth Avenue Media Services chairman Achal Mehra and his partner Gaurav Kohli aver. They also envisage the evolution of new business models wherein the pricing of the channels will depend on the target audience in addition to the content.

Mehra believes CAS will also herald in an era wherein the future will belong to low-cost and reasonably priced relevant programming or content. Distribution - not advertising - strategies will be the key and different specialisation skills will be required for distributing channels in CAS and non-CAS areas, says Mehra.

Mehra, who has a decade of related experience, says: "The Indian market is entering a crucial phase where it will mature and grow. The cable trade has realised the need for options other than the unviable high-priced existing bouquets. There is stiff resistance to the bundled approach."

Kohli, meanwhile, feels that CAS will deliver some kind of a blow to the bundled approach at least in the metros and bigger cities. Kohli also believes that there are several lacunae in the content being currently offered by broadcasters and there is tremendous scope for new broadcasters and special interest niche channels to enter the market.

"Consider the possibility of a broadcaster offering a 24-hour specialised golf channel. If it is targeted at the upper classes, the broadcaster has the liberty to price it at a premium. The propensity of the audience to pay the premium is high in this case. However, mass entertainment offerings which target the lowest common denominator will be forced to keep their pricing low," says Mehra.

Mehra adds that the entire country will be divided into CAS and non-CAS zones: "The skills required to distribute content in these areas will differ. That is where specialists like us will be required!"

Will cable operators and MSOs make the requisite investment in building robust systems in the post-CAS scenario? Mehra states that it will depend on the density of population which will avail of the broadcasting services - the cable-density in Malabar Hill or Cuffe Parade in Mumbai will be different from that in Patna or a Bhopal or a Goa or Kerala. He also adds that maintenance-related issues and charges will also depend on these aspects of the business.

"Even within metros, there are cases of 'early bird adopter' MSOs - who cater to posh areas - entering into joint technological ventures with foreign firms. These MSOs and their cable operators are confident that they will be able to increase revenue streams."

What about non-metros? "Outside of metros, there are some markets in India such as Kerala and Pune where the systems are in place. The cable rates are also pretty high as compared to other places because the trade has convinced the consumers that they must pay more for better quality. In such cases, the rollout of CAS will be fast," Kohli adds.

Will stealing of signals be a possibility in the post-CAS scenario? "It is a possibility but adoption of digital technology can minimise it. The issue of pilferage and piracy can be tackled only by investments in robust systems," says Kohli.

Referring to the fact that broadcasters demand 100 per cent declaration from cable trade, Mehra highlights what he considers to be a moot point: "No broadcaster can guarantee 100 per cent TRPs. CAS will also ensure that we move away from TRP to connectivity!" Is the rationale valid? Only time and the progress of CAS will tell!

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