CAS seems to be the talk of the town. Almost everybody seems to have some or other view on the conditional access system and its implications. The directly involved parties (Broadcasters, Cable Operators, MSOs, Information & Broadcasting Ministry) have already geared up their communication to the final decision-maker - the consumer. This newsletter aims to throw some light on the following four key areas:

a) The present viewer preference to Pay vs FTA vs Terrestrial Channels
b) A possible potential for Set Top Box acceptance
c) Implication of CAS pricing on C&S penetration
d) Gauging levels of advertising pressures in addressing CAS to consumers by pay channels.

What does the present viewer preference look like?

The pie chart below summarises the split of viewership across Pay, Free-to-air (FTA), and Terrestrial (Doordarshan) channels at the four Metro-level.

With the latest indications given out by the I&B minister on allowing dual illumination (a C&S home would have a choice to receive pay channels via STB or cable) for a "window period", it becomes difficult to predict the movement of eyeballs from one pie to another. One can be assured though, that FTA and terrestrial channels will either gain or hold on to their existing viewership base post-14 July.

Will different markets respond differently?

The viewership scenarios are drastically different in the four metros. The extent of response from these markets would be determined by the dependence that the viewers have on Pay channels.

The following chart compares the viewership split (in CS 4+ Years viewers) in four metros individually into FTA, Terrestrial and Pay channels.

It is quite apparent from the above chart that, share of pay channels in the four metros varies starkly. Contribution of pay channels in Chennai is as low as 32 per cent. This can be the determining factor in estimating response from this market to CAS. However, situation reverses in case of Mumbai and Delhi where pay channels control more than 70 per cent of viewership.

The above chart clearly indicates that CAS would have negligible impact in Chennai and relatively insignificant impact in Kolkata. It is worth mentioning here, that only 35 per cent of kolkata homes fall inside the city limits.

Mumbai and Delhi seem to be markets that will get impacted the most. Even in these markets the effect would not be uniform across SECs (socio-economic classification). TAM S group analysed the viewership split across SEC in these markets (i.e. Mumbai and Delhi) for Pay, FTA and Terrestrial channels.

Will different sections on society respond in the same way?

The response to CAS would surely vary across different SEC strata. This would largely be a function of their purchasing power parity (affordability to buy STB and Pay channel costs). The following chart presents the viewership split for Mumbai and Delhi markets across SECs (Socio-economic Classification) in Cable and Satellite homes.

 

As is quite clear from the above chart, viewership share of pay channels across SECs does not differ drastically. Therefore the amount of pull by the pay channels is quite similar across SECs. However, the segments would vary starkly in terms of their price elasticity. TAM Sgroup analysed the information presented in the above two charts to estimate the incidence of STBs in the two markets.

How many homes would buy into CAS?

The following construct is an attempt to estimate the number of homes in Mumbai and Delhi that would get into CAS. The incidence of CAS across SEC would depend also on the new content on FTA channels, the pricing points that broadcasters freeze-in on and STB costs.

Would CAS affect CS Penetration?

The information & broadcasting ministry in the recent weeks has been putting its act together to get the prices of STB and Cable down. If the price points promised by the government come into effect on ground too, one can surely expect significant changes in Cable & Satellite incidence in the long run.

A price point of Rs 72 /= + Taxes (Approx. Rs 110/-) would mean almost 40-50 per cent drop in cable prices from the current level. Therefore it becomes all the more affordable for a non-C&S (NCS) home to become a cable home at a minimal cost and get access to almost 70 FTA channels.

The chart below indicates the potential for cable channels in various markets. Delhi & Kolkata alone have around 1.57 million NCS homes. The viewership in these homes is totally dominated by terrestrial channels. In the event of CAS bringing the price of cable down, there are strong chances of a lot of NCS homes changing to cable homes. It therefore becomes imperative for terrestrial channels to get their act together to stop the transition of NCS homes to C&S by improving content.

 

CAS Promo on Pay Channels
While most of these questions and estimations would only get validated in the picture that emerges post-CAS, TAM Sgroup analysed the effort that pay channels have put in to spread awareness of CAS amongst 4 Metro viewers.

All the major pay channels in the four metros in the last few weeks have been showing on-air promos to spread awareness amongst viewers about the new system. The key pay channels that have been promoting CAS on their network are Zee, Star , Sony, Discovery, etc. On an average around 383 Spots have been aired across channels for the last nine weeks.
TAM Sgroup analysed the promo plan deliveries at a four metro level to roughly estimate the percentage of audiences that have been communicated with this message. The table below presents the percentage of audiences reached through the CAS Promotions across various channels.

Chennai seems to be the lowest on awareness of the new system as far as the delivery via television goes. Therefore there is a strong need for government and the pay channels to effective communicate the message to the consumers. In the other metros, pay channels have been able to reach more than 80 per cent of the audiences.

Parting thought...
As the D-day comes closer and closer, more and more aspects of CAS would keep coming to the fore. TAM Sgroup will keep you updated with the latest in Television Viewing environment.

A TAM S-Group Release
(Sources used - TAM Peoplemeter data & TAM TV ADEX)