with ETC Networks executive director and Broadband Pacenet India chairman
Jagjit Singh Kohli
and media planning business will become creatively integrated
on 30 June 2003
Networks director and Broadband Pacenet India chairman Jagjit Singh
Kohli is a man doing a tight-rope balancing act as far as the conditional
access system (CAS) is concerned. Donning multiple hats - in his capacity
as a broadcaster; as a MSO; a friend philosopher and guide to last
mile operators who seek his counsel - Kohli is making every move cautiously
as he has to consider every aspect and dimension.
is one person whose counsel is sought not just by the cable trade
but also by government officials. Even today, Kohli is looking at
the next frontier in cable television revolution (or should we say
evolution) as he refuses to accept that the ideal equilibrium situation
in cable television has arrived as yet.
Networks recently organised a CAS seminar for the advertising fraternity
at Mumbai's Mayfair Rooms. Kohli (and Broadband Pacenet India CEO
S Ravindran) answered posers thrown at them by media planners and
following are excerpts of comments Kohli made during that seminar
as well as viewpoints on various issues related to the current CAS
chaos, impact of CAS on advertising and Broadband Pacenet India
plans, as recounted to indiantelevision.com's Ashwin
have mentioned that the media has been highlighted issues of lesser
significance? What are the real issues about the conditional access
system (CAS) implementation that have been ignored?
of all, I must say that the term "CAS" itself is wrongly
used in India and not understood in entirety - cable is one of the
ways to deliver content to the consumer in addition to others such
as DTH or broadband. Also, it is important to mention that India's
late adoption ensures that it ends up getting the best technology
- consider examples such as telecom or colour TV technology. In
India, CAS roll out will definitely be sophisticated and 90 per
cent of it will be digital.
has carried a lot of rubbish and has blown irrelevant issues because
the journalists have been speaking to the same group of people over
and over again. Real issues pertaining to the technology and business
aspects of CAS have been totally ignored.
implementation of the conditional access system (CAS) rollout could
have created several opportunities for the cable trade and made
life easier for the consumers.
fallouts of the current policies could have been avoided and these
issues affecting the Indian consumer and entrepreneur has been totally
ignored by the decision makers.
two examples: As per current CAS guidelines, consumers who shift
their houses have to surrender their set top boxes (STBs) if they
move to an area that is serviced by another multi system operator
(MSO). Secondly, the government has wasted a wonderful opportunity
to give a stimulus to local manufacturers who could indigenously
manufacture set top boxes (STBs) and sell them in the global markets.
problems could have been averted and newer opportunities could have
been created by adopting remedial measures.
government should have allowed open source or open standards rather
than permitting MSOs to have proprietary technology in the set top
boxes. Rather than treating it merely as a box, the government should
have treated it as an appliance. Due to this fallacy, it is possible
that CAS might not spread as fast as the Internet did!
say that governments have some reservations about open architecture.
Consider the recent example wherein it was alleged that broadcaster
Al Jazeera was sending hidden cryptic messages to terrorist
networks. Agreed that the government had some issues about open
end architecture. But If you allow free import of hardware, you
should also allow open source and open standards. Linux has become
so popular due to its open-ended nature. When China adopted CAS
some years back, it asked the CAS solution providers and encryption
companies to open up. This was the origin of China Crypt.
was a great opportunity for local manufacturers to indigenously
manufacture STBs with open source or open standards and sell them
in the world markets. If the government is not careful, what could
happen is that most of the boxes that come in will be containing
technology that has become outdated in many developed countries.
India could become a dumping ground for boxes that have been discarded
by those countries.
Indian MSOs have fallen prey to the nexus of the major CAS companies
who support the major headend providers and the five-six major subscriber
management system (SMS) providers. Indian
MSOs have partnered foreign companies that are hand in glove and
the boxes that will enter India will be plain vanilla entry level
Indian consumer shouldn't be made to pay for outdated technology.
None of these above mentioned companies offer guarantees against
hacking. If the MSO wants any changes or replacements, this nexus
will ensure that the MSO will have to pay each link in the CAS chain.
The MSOs will eventually have to pass on the brunt to the consumers.
government should also have allowed last mile operators (LMOs) to
obtain feeds from different MSOs at the same time. The need of the
hour is open connectivity agreements between the LMOs with the MSOs;
and open content distribution deals between the MSOs and the broadcasters.
there be fragmentation or consolidation in the MSO space post 14
Contrary to the initial perceptions that the conditional access
system regime (CAS) will benefit multi-system operators (MSOs),
the ground reality seems to indicate something totally different.
Yes, the MSOs will certainly become more powerful in the broadcasting
and advertising stakes - but the MSO space will no longer be dominated
by a select few. Several cable operators are grouping together and
exploring possibilities of forming cooperatives with independent
headends not affiliated to any of the current dominant players.
Some of these groups will be keen on making the necessary investments.
A free-to-air headend requires an investment of anything between
Rs 1 million to Rs 1.5 million whereas the investment in a digital
headend varies between Rs 200 million to Rs 300 million. If the
digital headend is really state-of-the-art the price tag can even
go up to Rs 100 million.
The local cable operators (LCOs) and last mile operators (LMOs)
are harbouring feelings of antipathy against the existing MSOs and
the incumbency level is high right now. The impending implementation
of CAS has given them an opportunity. Earlier they couldn't protest
due to various reasons: peace and tacit understanding between MSOs;
rigidly defined territories; broadcasters' rigid stance of not dealing
directly with cable operators. All these issues are a thing of the
past. But yes, those broadcasters who have quality content will
wield some influence.
CAS, MSOs will hold the key to provide data that will supplement
the statistics provided by the rating agencies as well as the
broadcaster sales teams"
you feel that MSOs will become more powerful post CAS?
The post-CAS MSOs will definitely become more powerful from the
advertising point of view; eventually LCOs will bargain from multiple
feeds from several MSOs at any point of time; MSOs will provide
multiple revenue streams to LCOs; agreements with MSOs and LCOs
will keep broadcasters on their toes.
stakes point of view:
Ad media planning business will become creatively integrated post
CAS. Advertisers will get a chance to blend interactivity with content.
Ad agencies will have to develop creative content that is more focussed.
agencies and media planners will have to keep in touch with the
MSOs as distribution-related knowledge will play a large role in
media planning and buying. This is an aspect that has been totally
ignored by media planners and buyers who have been depending on
ratings. Post CAS, MSOs will hold the key to provide data that will
supplement the statistics provided by the rating agencies as well
as the broadcaster sales teams.
in turn, will bring privacy related issues to the fore. Privacy
is a tricky situation and it is somewhat similar to the situation
wherein mobile telephony operators can pinpoint the location of
an individual. The MSOs and LMOs will have to weigh the pros and
cons of sharing consumer information with those that seek this information.
However, in the long run the advantages of sharing this data will
far outweigh the negatives - the consumer will get lots of benefits.
Further complications will occur due to the impending arrival of
MPEG 4 - that provides object level rather than frame level (MPEG
2) that is currently available. MPEG 2 involves merely compression
techniques whereas MPEG 4 is more advanced. Even the US government
has mandated the use of advanced versions of MPEG by the year 2006.
ability to develop and deliver messages in a certain context gives
an advantage to advertisers and offers challenges to ad agencies.
For instance, it would be possible to change the on-screen hoardings
in different households based on the profiles of these households
- irrespective of the actual hoardings in the stadium. Broadcasters
as well as advertisers will need the help of MSOs and LCOs to make
this a reality.
The cost of the backend support for activating such services will
be humungous. There are few instances of broadcasters adopting and
implementing MPEG 4 at present. It is being used primarily by the
LCOs could take feed from multiple MSOs and HITS operators:
LMOs must be eventually given a chance to have open connectivity
agreements with MSOs and open content distribution deals with broadcasters.
However, for this to happen, the LMOs should be given permission
to connect to two or three MSOs (and HITS operators) who will have
to be flexible from the frequency point of view. To deliver a digital
package of 36 pay channels, only three cable frequencies are required
(S-21, S-22, S-23). If the MSOs implementing CAS through Headend
in the ground (HITG) model have different frequencies, the LCOs
and smaller MSOs can take feed from two or more MSOs or HITS operators.
In the case of HITS, it is easier to implement as the transmodulators
in HITS are agile. Beyond S-21, there is greater flexibility due
to bandwidths more than 7Mhz and 8 Mhz.
Pressure on pay broadcasters to continue status quo:
Another way in which the post-CAS MSOs and LMOs will become powerful
is due to the pressure they can apply on broadcasters. Pay channel
broadcasters have an agreement or understanding with MSOs that their
channels will compulsorily remain pay for a fixed duration of time.
If they retrace their path and convert some of the channels into
free to air, there is a chance that MSOs or LCOs might initiate
legal proceedings against the broadcasters.
MSOs will provide immediate earning avenues to LCOs irrespective
of how many people adopt STBs:
Consider the fact the LMO will earn Rs 72 post CAS from
the FTA channels. In order to earn an equivalent amount through
commissions from pay broadcasters, the LMO will have to ensure that
the consumer buys Rs 300 worth of pay channels (considering a 25
per cent margin). Value added services such as Internet Access,
subscriber databases, fulfillment services will be the primary revenue
earners for LMOs from day one.
us about piracy related issues post CAS?
In the post CAS scenario, wooing the MSOs and cable operators will
be very important for the broadcasters. The piracy can occur at
various levels - STBs, MSO level or at the LMO level.
the latest version of STBs (128-bit), it would take hackers decades
to crack the system. The 1024-bit STBs are virtually impossible
to crack. The 64-bit STBs are comparatively easier to hack as compared
to 128-bit or the 1024-bit ones, even though the keys change in
a matter of seconds. Ideally, the chosen STBs should have a public
key, a private key and other complex identification elements. Companies
need to constantly update these identification elements.
foolproof methods have to chosen. For instance, in several countries
that have adopted CAS, one notices that piracy is an issue - for
instance, LMOs can place a pirated box obtained without the knowledge
of the MSO and continue to charge the consumer who wouldn't know
the difference; or MSOs can continue to under declare by using pirated
boxes or illegally obtaining codes from the HITS or HITG. Therefore,
it is important to note that MSOs and LMOs are the key to successful
implementation of CAS.
are chances that several households will woo cable operators encourage
piracy of signals - at least for their secondary TV sets. It would
be virtually impossible to steal signals for the primary TV set.
As CAS progresses throughout the country, cable operators from smaller
towns and cities will definitely consult the metro cable operators
for piracy related tips. Abroad, the codes for the popular conditional
access systems are easily available on the web or Internet sites.
This could be a scenario at a later stage even in India.
The post-CAS MSO and LCOs/LMOs cannot be ignored after 14 July.
Broadcasters, consumers and advertisers can ignore them at their
if consumers take time to adopt STBs, services such as Zero
will empower cable operators to earn more during the interim
are the ways in which MSOs can offer opportunities to LMOs to earn
revenues from day one?
The implementation of the conditional access system (CAS) has definitely
ushered in an era of new business opportunities for the trade constituents.
Pacenet India (BPI) is forging an alliance with a consortium of
12 international promoters who are in the process of launching a
smart card based payment mode for cable consumers and others who
wish to avail of the service.
promoters have decided to brand India's first domestic indigenous
payment gateway as "Zero". Zero will be available to all
those cable subscribers who invest in a set top box (STB). The launch
of Zero will coincide with the launch of CAS services and its implementation
service will be offered and publicised through a network of cable
will earn monies for the same. They can also get incentives as the
consumer (who has been sold the card by any particular LMO) spends
more - just like the commissions in an insurance business.
have obtained the requisite Reserve Bank of India (RBI) clearances
and The State Bank of India will be the participating bank. Zero
will be positioned as India's first multi-application card that
will provide consumers with access to a wide array of financial
will have the potential to threaten global players such as Visa,
MasterCard and AMEX. Zero will offer much more than the traditional
companies such as VISA, Mastercard and Amex at no extra costs. The
services include financial applications, loyalty programmes, debit
card services, credit card services, e-purse facilities, access
card facilities and entitlement card facilities. More importantly,
merchant establishments won't be charged extra transactions costs.
At present, global players such as Visa and Amex charge anything
between 2.5 to four per cent.
is also slated to be an interoperable card and users won't have
to pay anything extra if they conduct transactions in banks who
have an agreement with member banks. The promoters plan to increase
the network to 63 cities in the country.
will offer an added revenue stream to cable operators in the post-CAS
scenario. Even if consumers take time to adopt STBs, services such
as Zero will empower cable operators to earn more during the interim
us about Broadband Pacenet India set-top boxes?
Pacenet India set-top boxes are highly sophisticated indigenous
"home genies" that include features such as a peoplemeter
and ethernet output (to enable Internet surfing).
advanced STBs (rather 'home genies') will be economically priced
around the same level of Rs 3,500. I expect penetration to touch
50-60 per cent levels if the current "pay channels" remain
primary issue will relate to the smart-card user identification
elements such as the public and private keys. "Pacenet's STBs
have RSA data security for enhanced security. Pacenet has gone for
the 1024-bit configuration that is almost impossible to crack.
is the only company to produce and supply Indian made STBs. Our
'home genies' will have elements such as RSA 1024-bit; DES (Digital
Encryption System) and AES (advanced encryption systems); with peoplemeter
facilities. We have plans to get these STBs certified by companies
such as Business Proton and Tata Consultancy Services and then sell
them in the global markets.
Pacenet boxes will have the ability to provide value added services
and can be upgraded at low costs and will also offer exchange facilities
that several other MSOs have promised.
do you feel about the recent move by the finance ministry has, along
with abolishing excise duty on set-top boxes (STBs), notified a
reduction in customs duty from 25 per cent to 5 per cent on key
components of a set-top box -- tuners, remote control units and
It is definitely a welcome move - especially in the case of the
tuner that costs around $12 (comparatively RF modulators and remote
control units are cheaper). Earlier, if you had to pay Rs 100, one
paid Rs 16 (basic customs duty, CVD and 4 per cent); now with the
provision for value additions of say Rs 10, one would end up paying
Rs 17.10 (not much). The point to remember is that one can claim
this through MODVAT. The benefit should have been given to manufacturers.
only way the government can effectively boost Indian industry's
demand for the 40 million boxes, only if the IPR for the design
of the box and CAS is held in India. Otherwise, if import is cheaper,
the government will only play into the hands of foreign manufacturers
- please note the box and CAS are integral units. That is why STBs
can be rented (avoiding sales tax) because the box is part of the
plant controlled by CAS. In China, the government has made Chinacrypt
as standard--so consumer gets flexibility and the government gets
on CAS can be calculated at $10/box and smart cards are replaced
every year (cost $4)---these will be continuous outflows and the
subscriber will have to bear this cost. Certainly, the government
has to endeavour to make it consumer friendly as other countries
broadcasters will have to take a decision about converting pay
channels into FTA and vice versa. It entirely depends on the
business model that the broadcaster adopts"
ETC Networks channels remain free to air or go pay at a later stage?
Although ETC Networks had earlier announced that its channels etc
and etc Punjabi would become free-to-air after 14 July 2003, there
is a possibility that etc Channel Punjabi will go pay.
decision would depend on the business/revenue model of the channel.
Our research indicates that etc Punjabi has exclusive content that
is not available with competitors - for instance, the Gurbani (live
renditions from the Sikh holy book relayed from the Golden Temple,
Amritsar). Moreover, our internal research indicates that large
chunks of viewers in North India are hooked on to the channel and
will definitely pay the monthly charges.
flagship Hindi music channel etc would remain FTA. etc music channel
has substantial reach, penetration and distribution. In fact, it
gets advertising revenues due to these strengths. Moreover, it also
earns monies due to sponsored trailors and music videos amongst
others. There is no question that etc Hindi would remain free.
broadcasters will have to take a decision about converting pay channels
into FTA and vice versa. It entirely depends on the business model
that the broadcaster adopts.
some of the MSOs are asking pay channels for commitments that they
would remain pay for a certain specified duration. However, the
government notifications don't specify any such commitments. As
far as the government is concerned, the more the number of FTA channels,
the better it is. The government can then claim that CAS is a success.
do you feel about the broadcasters' proposal to have differential
Some broadcasters have proposed to have different MRPs (market retail
prices) for channels in different cities. In their meeting with
MSOs on 18 June, broadcasters had given MSOs a chance to add their
margins to the pay channel rates specified by the broadcasters.
However, I feel that the differential pricing regime should not
be allowed as the government wants standardised rates across the
country. However, the fact remains that most of the LCOs are demanding
25 per cent of the 50:50 break of revenues between the MSOs and
agencies would still provide data on the non-CAS homes. Rating
agencies and media agencies will have to eventually coordinate
with MSOs for research findings and consumer insights."
will the post CAS scenario make life for media planners and buyers?
The implementation of the conditional access system (CAS) will definitely
make life difficult for media planners and buyers. The opportunities
available for advertisers will increase dramatically. In fact, media
independents and ad agencies will have to create specialised teams
that will deal with the post-CAS scenario. Moreover, they will have
to analyse data from the rating agencies such as TAM as well as data
compiled by the MSOs.
will provide ample opportunities for branding. The opportunities
will include options such as EPG (electronic programme guide) and
OSD (on screen display) that will become a part and parcel of every
household that owns/invests in a set top box (STB).
plain vanilla STBs that are being offered to consumers in the initial
stages of CAS implementation can provide opportunities such as:
* On screen display while the STB is in the process of booting or
* Messaging service including targetted OSD (on screen display)
depending on the profile of the household or the subscriber.
* EPG (electronic programme guide).
will be a great opportunity for media planners and even the cable
trade constituents. Consider a scenario where a cigarette ad will
be displayed on the TV screen of a subscriber who smokes. Pharma
companies can target the households of doctors. Selective dissemination
of messages is a distinct possibility as the MSOs/cable operators
have the expertise to collect data about consumers.
will be a greater opportunity for education based shows or channels.
rating agencies become redundant?
The rating agencies would still provide data on the non-CAS homes
(those households that don't invest in an STB). Rating agencies
and media agencies will have to eventually coordinate with MSOs
for research findings and consumer insights. MSOs have started thinking
seriously about data collation and mining.
there are STBs that are empowered to act as peoplemeters. In India,
the basic boxes that are being currently offered by several MSOs
don't have this facility. But all Broadband Pacenet India manufactured
STBs will have the peoplemeter facility as well as Ethernet output.
BPI is the only MSO that won't be importing STBs but will be indigenously
manufacturing STBs and providing it to Indian consumers.
would the consumer pay for a costlier STB that can act as peoplemeter?
Eventually, broadcasters will lure consumers with loyalty programmes.
For instance, Zee TV can coax consumers to buy STBs with peoplemeter
facility; urge them to watch Zee TV for 'X' hours a week; offer
them discounts on the Zee bouquet package rates for the subsequent
CAS will empower several households that couldn't afford to buy
a computer earlier as the STB will give them a chance to surf the
net through their TV sets.
to you, who should be blamed for the current state of confusion?
The point remains that every constituent of the cable trade is in
favour of CAS. All of them have taken some steps forward. The MSOs
are caught in a trap - they have made quite a few investments and
they are unsure of the future developments. Broadcasters are playing
a cautious game. The LMOs are all in favour of CAS. The government
is going ahead despite scares of "probable backlash" from
currently there seems to be some kind of a Catch 22 situation. One
must realise that there can never be an ideal situation. I am confident
that CAS will eventually be a great success in India.
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