On September 1st 2003, a month back, Chennai
city gave its residents the option of watching television via
a set top box. It was the launch of conditional access system,
whereby, a viewer wanting to watch a Pay TV channel will have
to forcibly purchase a set top box. Although it was a law that
emanated from our Parliament for execution in the four large metro
markets, it was only Chennai that took the road towards implementation.
Now, a month after the rollout, the time has come for a reality
check.
The initial response from TV homes to purchase
of the set top box has been very lukewarm. Chennai city has nearly
8 lakh (800,000) homes having access to Cable & Satellite
TV channels. But, industry estimates say, only 8,000 to 10,000
homes have come forward to acquire a set top box. What this means
is that overnight, the market size for Pay TV channels (approx
8 lakh homes) has collapsed to just 1% to 1.25% of the earlier
size post August 31st 2003. This could mean an enormous loss in
subscription revenue for the Pay TV channels (assuming that the
cable operators were declaring the right number of homes accessing
Pay TV channels before CAS rollout).
Reality is slowly dawning on the industry that it is not going
to be a cake walk to induce consumers to purchase set top boxes
and pay the subscription fees for Pay TV channels. Past data analysis
had shown that Chennai is going to be the most difficult market
for CAS to penetrate. This was because; over 70% of viewership
was garnered by Free-to-Air Tamil & other Regional language
channels.
In a post CAS era, all Tamil & other Regional language channels
continue to remain Free-to Air and popular among the Chennai TV
audience. The viewership for Hindi & English Pay TV channels
has dropped to negligible numbers.
Audience
Share Prior (Aug 1st to 31st 2003) & Post (Sep 1st to 20th
2003) CAS
Source
: TAM MEDIA RESEARCH, Chennai, C&S 4Yrs+
(P=Pay TV channel, F=Free to Air TV channel, Eng=English, Hin=Hindi,
Tam=Tamil, Reg=Other Regional Languages)
Their viewers have shifted to Free-to-Air English,
Tamil & other regional language channels. The biggest gainer
has been the Free-to-Air English channels with over 100% jump
in their share of viewing. This is primarily led by NDTV 24x7,
BBC, Fashion TV and DD-sports (which has turned from Pay TV channel
to Free-to-Air channel). Interestingly, since cable operators
are no longer able to give viewers access to Pay TV English Movie
channels in non set-top box homes, they have substituted some
of these channels with other international channels like Hollywood
& Arirang English Movies.
The learning from this experience should be used to make strategic
decisions for future rollout of CAS & subscription drive for
Pay TV channels. In this dynamic market, the success of CAS will
depend on how well the different constituents of CAS work with
the ground distribution in trying to woo back consumers to not
only buy a set top box, but also to subscribe to various Pay TV
channels. The potential does exist, what remains to be done for
the task to be achieved is hard work!
(A TAM analysis using TAM Viewership data)
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