can get more complex than this. It is not only the pay-TV
broadcasters and the government who are wanting to take
time out for implementation of conditional access system
(CAS). Opposition is coming from within the value chain
of the cable TV industry itself with the distributors
and the last mile operators (LMOs) expressing concern
operators' fear of CAS is grounded in the fact
that they will lose control of their subscribers
to the multi-system operators
is not good for consumers, distributors and last mile
operators. It will lead to too much of confusion in
the market. Besides, broadcasters are not providing
a la carte rates," says Cable Operators and Distributors
Association (Coda) vice president Ravi Singh.
the mood among the cable operators is not to rush with
CAS. They would rather wait to see if direct-to-home
(DTH) picks up once Tata Sky launches its service later
in the year. Their fear of CAS is grounded in the fact
that they will lose control of their subscribers to
the multi-system operators (MSOs). And in the transparent
system of digital cable, they will have to open up the
unreported subscribers to the MSOs.
counter this "two-way defeat," the distributors
and last mile operators are willing to vote CAS out.
So how do they plan to compete with DTH? By dropping
prices of analogue cable while throwing the offer open
for digital service without CAS.
a miserable situation to be in if you are a MSO as you
will be hurt both ways. In the scenario of a price drop,
the MSOs will have to absorb the slippage. And in case
of digital cable without CAS, they will have to invest
while facing the uphill task of luring subscribers away
from analogue. Particularly in a market that has grown
a spoilt breed of over 52 million (NRS says its 61 million)
cable TV consumers who are used to a large menu of channels
on a comparatively low monthly subscription fee.
LMOs, in fact, have an open-ended strategy. If DTH starts
pocketing cable TV subscribers, the gameplan is up for
change. They will bend and cooperate with the MSOs,
becoming a part of an organised distribution system
with margins well-defined and structured.
broadcasters have been dilly-dallying on CAS.
But MSOs have not made it any easier for them
with such statements as "the true value of
pay channels has come to the surface in Chennai
where consumers have thrown them out."
wait. Having enjoyed the spoils of a long grown unorganised
industry, the distributors and LMOs do not want to let
go so soon. Coda, an association of cable operators
and distributors in Mumbai, is even talking of setting
up a digital headend in a CAS regime. This is nothing
new. In 2003, when the CAS topic was hot, Coda made
similar rumblings that threatened but sounded empty.
But this time, there is a significant change. There
are around 50 distributors in Mumbai and they have invested
in fibre. What this means is that they are connected
by fibre with each other, except in small patches where
work is going on, and have the infrastructure to put
up a digital network.
will jointly invest in a headend and run it as partners,"
says Coda president Ganesh Naidu.
Talk is easier than action. Investments on setting up
a digital infrastructure is not all; a sizeable chunk
of money needs to be set aside for subsidising set-top
boxes (STBs). Then there is the issue of professionalising
customer care services like a call centre and technical
team for maintenance. Besides, negotiations with broadcasters
can be a tedious process. And who can forget management
issues between as wide a body as the distributors and
the garb of an entrepreneurial spirit may lie the hidden
agenda of bargaining for a "pound of flesh."
The distributors, who feel insecure of their role in
a CAS system, want to ensure that their place is protected
as a bridge between the MSOs and the LMOs. They, along
with the MSOs, have been asking for more, as share in
terms of commission from conversions into digital consumers.
MSOs can take the blame for not ironing out differences
with their distributors and LMOs. Even as the time frame
for implementation of CAS is set for delay, there is
no effort to fix the margins. The argument on offer:
such margins can be settled only after the broadcasters
come out with their proposals.
broadcasters have been dilly-dallying on CAS. But MSOs
have not made it any easier for them with such statements
as "the true value of pay channels has come to
the surface in Chennai where consumers have thrown them
out." Perhaps, MSOs went overboard thinking that
this would win them support from the consumers and,
hence, the government as it would imply cheaper cable
subscription fees. The sad fate of CAS is that consumers
didn't quite agree with this.