Will conditional access prove to be the one shot medicine for all the ailments that afflict the various constituents in the Indian television industry and the TV viewer?

Information & broadcasting minister Sushma Swaraj is convinced it will, and that is why she has been putting all her might behind it, steamrolling it through the Lower House earlier, and the Upper House a couple of days ago. Along the way, she brokered peace with the Congress party and several others who shouted her down whenever she mentioned the word CAS.


A closer inspection of the television industry, the CATV trade and the CAS bill, and you will realise that conditional access will not heal the business of its ills overnight like most magic medical bullets are expected to. Many biological pathogens will have to be got rid of with their individual medicines.

Analogue or Digital?

For one, there is the question of technology: should India tread the analogue or the digital path? Digital set top boxes internationally are incorporating hard disks and in the process storage capability and they are beginning to do jobs like Internet surfing, organising the household and the utilities that go with it. In the Indian context, there is talk of how steep the cost of digital set tops that have the capacity to incorporate interactive features and the possible required security (at least Rs 10,000). This huge burden would make CAS unaffordable to a large part of the 40 million cable TV populace. Hence the government has decide to wish them away and instead opted for analogue as the standard which is much cheaper. Expensive digital set tops will probably make their way in, but only with the cr?me de la cr?me, who can afford the fancy gizmos that digital set-tops have morphed into.

The "aam juntaa" will have to make do with an analogue set-top which is expected to cost below Rs 3,000. The government believes that cost of the box can be brought down even further to as low as Rs 1,500 due to the sheer volumes that will be achieved once demand starts gathering pace. The size of the set-top manufacture market is estimated to be worth anywhere between Rs 120 - 280 billion. Manufacturers will come out of the woodwork; India has entrepreneurs quite skilled in reverse engineering to make the boxes. Among the names which one has heard of include: HFCL, Philips, Videocon, Samsung, LG, Catvision, Scientific Atlanta....

What the government has glossed over though is the point raised more than once by broadcasters that the analogue STB can easily be hacked into. It is not clear whether the government doesn't agree with the broadcasters on this and genuinely believes that analogue boxes can have safety mechanisms built in or whether it has chosen to deal with this later. Additionally, the government believes that the common consumers will continue to stay contented with analogue boxes and will not upgrade to a digital regime as the services provided around the digital boxes increase and costs fall. Who will bear the cost for this upgrade, which will benefit manufacturers: of course the poor sucker consumer.

As to who would bear the cost of the analogue STB itself, the government has indicated that various financing plans would have to worked out so that the entire cost of the STB is not borne by the subscriber upfront. Coming from the minister, there is more than a hint that options like renting out of set-tops if a subscriber cannot afford to buy it outright are to be considered. Will cable TV ops be up to this, is a question only time will answer.

All systems go?

Then there is the question of what exactly is the encryption system that will be put in place? Will the consumer be able to use the same box if he shifts to a new location or will he have to buy a new one? It is to be hoped that the Bureau of Indian Standards, which has been given the task of mandating the technical specifications of the STBs, will ensure that there will be one standardised system. Or at least have several systems with interoperability without hurting the consumer's pocket.

As far as the monthly tab the viewer will have to bear for his/her television fix, the government has envisaged at the very basic level a two-tier system. It will decide the monthly rates for the free-to-air channel package. This in itself is no easy task because the government has indicated that the rates will not be uniform across the country. Though a lot of talk has centred around the cost being Rs 100, there is also speculation that the average monthly subscription fee could be as low as Rs 70. Out of this, Rs 30 will go to the government as tax.

Regarding the composition of the basic tier, what the government is saying is that it will only decide the maximum number of FTA channels in the basic tier and also the genre of channels. An example cited by Swaraj is that the government will only see that in the basic tier no specific genre of channels like news or infotainment channels dominates. That there is a proper mixture of all available channels.

If there is a lot of pay channel operators who would clearly welcome CAS entry sooner rather than later, it is the quality niche channels. An HBO, a Discovery or National Geographic; or even a CNBC India or Star News among the news channels, can really extract their true worth on the price coefficient if CAS comes into play. And of course the sports channels. The world over, quality sports has a premium attached to it like nothing else and that will hold true even in a "sports-dud" country like India. All these channels provide compelling and focussed content to their audiences and it is in the CAS regime that their true worth will clearly be shown up.

Will the viewer bite?

Having said that, even as the industry is talking of individual pricing of pay channels under CAS, it is highly unlikely that the customer will be taking his pick from the 100-odd channels that there are to choose from and making a list that he wants. Bouquets and packages will certainly be very much in play. A single in demand or premium channel may well send the cost of a viewer's package soaring. And there will be many of the latter on offer. At the end of the day, the success of a broadcaster will depend on how it packages its channels to the consumer.

But even here, the government has decreed that the price of each channel will have to be displayed by broadcasters and weaker channels cannot ride piggyback on stronger channels in a bouquet. Hence if in the Star bouquet, Adventure One is the weakest channel, then it cannot hide behind Rs 40 or whatever the price of the package may be but will have to have a clear price value attached.

What is clearly of worry to the broadcasters is really the general entertainment channels. One view is that at the end of the day, there is not that much to choose from between a Star Plus, Sony Entertainment and Zee TV. And if that were the case the consumer would certainly take a tough look at pricing. Between paying for a Star Plus or a Sony, and getting two FTA channels like Sahara and SABe TV instead, the latter choice would be quite attractive if the pricing of the pay channels was not kept at an affordable rate. Obviously, while some may go for the FTA package, the diehard viewers will not allow pricing to prove a hurdle to their viewing fix.

Will advertisers zero in?

Advertisers have already been playing hardball for sometime now trying to stretch their not so expansive budgets to the maximum. Complaints have been aired by broadcasters, advertisers and agencies on the sanctity of the viewership ratings, depending on whose numbers are looking bad. A poor and insecure sample, fudging are some of the allegations that have been hurled against the ratings. With addressability, the peoplemeters will not disappear, in fact they will adapt to the new addressable scenario, supporting some of the data that the channels will provide on penetration and subscriber numbers.

With viewership numbers quantifiable since set top boxes will tell exactly how many households are accessing each channel across markets, its is quite likely that advertisers will look at spends and budgets with even stronger magnifying glasses and demand an even better value for money equation. On the flip side, advertising in the quality niche channels will better reflect their real value, as the audiences accessing them will be easier to qualify.

As a straight fallout of this, expect the entry sooner rather than later, of international channels like the History Channel and the Technology Channel. Then there are other channels like Vogue, Fox Movies and even a channel dedicated exclusively to golf, for instance, that are likely to look at entering the Indian market.

Who will monitor the cable ops?

The Amendments to the 1995 Act has taken stern measures against irregularities in the broadcast industry and stipulates that illegal distribution (read under declaration) of channels will constitute a cognisable offence.

Each cable operator is supposed to publicise in the prescribed format, the subscription rates and the periodic intervals after which they are payable for receiving each pay channel. The bill makes it compulsory for cable operators to declare details of the total numbers of subscribers and subscription rates not only to the state government, but also the Central government. Any offence is a cognisable offence as per the amendments made. All this is of course just so much words if there is not a rigorous policing mechanism in place. How this will be managed has not been spelt out as yet. Will it be through the local post office or will a special mechanism/infrastructure have to be set up to ensure that quarterly subscriber figures are given out by both cable TV ops and broadcasters? If there are transgressions, who will be ensure the errant are brought to book? Who will decide the penalty?

What is needed really is stringent enforcement and close scrutiny of the subscriber management systems that the MSOs put in place. Because if the cable trade is allowed to get away with fudging the number of set tops they have seeded and who is accessing what channels, then we would be back to square one.

What's in it for the government really? That there will be a quantum improvement in revenue collection of entertainment tax and the five per cent service tax on cable TV where addressability is built into the system is something everyone agrees to. But for this to really benefit the government in value terms, accountability will need to be brought in as to the revenue collections vis-?-vis what is owed to the government.

All in all, whatever the critics may say, it must be admitted that Swaraj is trying to bring in a system which she believes in the long run is the most fair to the consumer and also the industry as the shakeout will take care of smaller irritants in the form of smaller cable ops.

As far as the actual rollout is concerned, the government would like it to happen at the earliest. But the specific rules for the new way of showing, or watching cable television are yet to be formed. That according to industry observers should take between 14 days to a month.

Once that has been done the notification will go out and then it should take between 12 to 18 months for the metros and bigger cities. And for CAS to become the norm across the country? At the most optimistic reckoning, twice that time frame. Zee Group chairman Subhash Chandra has said though he expects the whole process to take between five to six years.

The CAS road is certainly one with a whole load of ifs and buts for all the players involved. In the long run though, everyone accepts that this is probably the best way to bring order into what still is a very chaotic business.

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