"CAS is just a dream" : Rohinton Maloo Cutting Edge Media managing director

The debate over conditional access system continues in India even as the government has set July 14, 2003 as the deadline for completing implementation of CAS in the four metros as part of the first phase.

At a time when most people have hailed the government initiative on CAS as good for the industry which is preparing for a life after CAS, there are people like Rohinton Maloo, managing director of Cutting Edge Media (a division of Mediascope Associates, created to focus on the television broadcasting industry) who think otherwise. Maloo not only feels that CAS is just a flight of fancy - "a dream" which is unlikely to come true, to be precise - but also believes that if the government is really out to protect the interests of the consumers, then a different approach has to be adopted.

Mediascope was formed in the early 1990s and has been instrumental in the launch of Star channels in India, starting off with Prime Sports (which later became Star Sports), as also the likes of Cartoon Network and HBO. Cutting Edge Media was carved out of Mediascope Associates about eight months back to look at the needs of TV broadcasting in a more focussed manner and, at present, handles the ad sales of channels like Zee MGM, Zee English and Hallmark.

In this interview with's Anjan Mitra, Maloo presents the other side of the CAS story.

The industry is hailing CAS as an initiative that will change the TV broadcasting industry in India. Do you also feel so?

Conditional access has the potential of changing the industry in India. It may turn out to be good for the industry where people who deserve revenue would get them deservedly. But CAS will not happen. At least in the present format.

What is the basis of your premise that CAS would be a non-starter?

I cannot understand how one city will have a different price mechanism in a state, while a neighbouring city will have a different mechanism. For example, you mean to say that in a city like Mumbai, people will pay a different price for cable services, while in Pune, people will pay another price for the same type of service. It is bizarre.

Then there is the issue of availability of set-top boxes and the price. I gather, there are about 15 million cable and satellite homes in the four metros where CAS is being sought to be implemented in the first phase. I also gather that no way can the price of STBs be as cheap as Rs. 1,500. Now all the 15-odd million C&S homes in the metros won't go in for STBs. The volumes being promised are inadequate to for manufacturers to make available cheap STBs. That means the cost of STBs would continue to be high.

Now, in India about 40 per cent TV sets are capable of receiving about 14 channels only. Though such TV sets can be upgraded to receive 80-odd channels by buying a box that now costs approximately RS 1,500. Have all the TV sets been upgraded at a low cost? No. If that has not happened, then I don't foresee a sizeable C&S homes in the metros also going in for STBs for CAS at a higher price.

"If CAS happens and cable operators' declaration increases suddenly, it would mean that they have been cheating the government also of entertainment taxes for so many years."

What you are saying that Indians would not cough up anything extra for conditional access. Right?

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? Those who will, anyway have the purchasing power to pay a monthly cable fee of RS 400, for example.

Moreover, you cannot draw out conditional access based on geographical conditions where a Delhi subscriber will pay one price and neighbouring Gurgaon will pay another price just because CAS is not to be implemented there. I also don't see any reason for the government pushing CAS. Why is it doing so?

"If there is no uniformity, what is the incentive for the government to push through CAS?"

The government's stand is that it had to step in because the consumer was feeling cheated because of the rising cable subscription fee. Don't you feel that government ought to play such a role?

I have always maintained that government should not control prices. And if it has to do that, it should be done uniformly all over the country. For instance, in a bid to make drugs affordable to the masses, the government has the drug price control order applicable all over the country which aims at compelling multinational pharmaceutical companies to have different and lower pricing schemes for the Indian masses (compared to other parts of the world). This is because it is the government's view that they do not have adequate purchasing power to buy expensive drugs. But in the case of CAS, it is not so. There is no uniformity.

By seeking to implement CAS, does the government want to say it cares for the cable TV consumers of Kolkata and Delhi and not for those living in other cities like Pune? You cannot have different rights for people in different parts of the country. If there is no uniformity, tell me what is the incentive for the government to push through CAS? Again, if the government is going in for some price control in one industry, why isn't it doing so in, say, the auto sector? Such things are best left to market forces and the market should determine pricing, not the government.

"I have always maintained that government should not control prices. If it has to do that, it should be done uniformly all over the country."

But if that is so, why has the industry hailed CAS as revolutionary?

Every involved party of the industry has its own reasons to do such things. The broadcasters have hailed this, because they feel the cable operators are not giving them the due share of subscription money. Similarly, others stakeholders like MSOs and cable operators too have their own reasons to support CAS. Moreover, if CAS happens and cable operators' declaration increases suddenly, then that would mean that they have been cheating the government also of entertainment taxes for so many years. Would cable operators, in such a scenario, get general amnesty? It may not happen, but sudden increase in declaration by cable operators does increase their chances of being prosecuted by the government also. So, this talk about CAS is all but sexy talk, a dream. And nothing else, I feel.

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