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Only subscription regime can allow for multiple channels: Dasgupta

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Legislation is required but at the end of the day the protagonists (read cable operators and broadcasters) have to come together at the table. This point came out loud and clear in the session on Broadcasting  The Importance of Change as Ficci Frames 2002 got underway yesterday.

One issue that seemed clear from the discourses through the day as well as conversations with delegates was that legislation on this issue is a given and can be expected any time now. It should be kept in mind though the uncertain political climate may mitigate against any movement on this at this juncture. But as I&B minister Sushma Swaraj saidThe committee which was constituted for this addressability issue has to give final touches to its recommendations. The objective should be that all stake holders get their legitimate due and the consumer also does not suffer.

The session was chaired by Anil Baijal, additional secretary, ministry of information and broadcasting. Baijal made it a point to declare he should be addressed in this capacity rather than as CEO Prasar Bharati (KS Sarma has officially replaced Baijal as of Thursday).

Sony Entertainment Television CEO, Kunal Dasgupta, one of the speakers at the session, harped on the key point raised by James Murdoch, chairman & CEO, Star Group, at the inauguration of the convention earlier in the day, namely that it was imperative that the cable industry increased declarations.

Pointing to the future, Dasgupta said advertiser supported programming is not viable across the board. Especially in the case of niche channels, the only way they would be able to survive in the long run is through a subscription model, Dasgupta said. He further said that innovations in programming can only happen in a subscription driven regime.

Addressability is the key Dasgupta said, while pointing out that revenues were completely skewed in favour of cable operators. Giving a revenue breakup, Dasgupta said in the present scenario broadcasters got only 10 per cent, MSOs 20 per cent and cable ops pocketed the remaining amount. In no other business does the distributor earn twice that of the content creator, Dasgupta said.

One issue that Dasgupta raised was how the broadcast fraternity appeared to have failed to convincingly present its case to the government. This was not the case with cable associations who had successfully lobbied with the government that advertising was also an income source for broadcasters and therefore there should be a ceiling placed on pay TV subscription rates. And it is not as if the MSOs are having a great time of it. Dasgupta pointed out that Hathway (in which Star has a stake) was making losses to the tune of $ 1 million a month.

Some suggestions that Dasgupta offered:

*The introduction of a two-tier system where there is a basic tier and a premium tier.

*Copyright must be protected and piracy made a punishable offence (in the US it is a major crime). *Government needs to legislate on this.

Allow for DTH and DTT to take off to create a climate where there is a viable alternative to cable. Government policies on both these was inadequate, Dasgupta said. The restrictions on DTH broadcast need to be eased and the input for government support of Rs 50,000 million in the 10th Five Year Plan to push DTT for national broadcaster Doordarshan was inadequate.

*Addressability  Enact a new conditional access code. Leave manufacturers the option to freely make set tops.

*Broadcasters and MSOs need to work together to educate consumers and create joint channel distribution companies.

*In all this the local cable operator needs a defined role. And that is to act as an agent for pushing new value added services like Internet over cable, PPV (pay par view), VoD (video on demand, streaming, etc. His incentive is that he earns a commission on all transactions.

Dasguptas last suggestion seems to be the most difficult to implement and even if the government were to step in as is being expected, it looks like being a protracted battle.

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