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'As an industry, we should support unregulated Cas'

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SET Discovery president Anuj Gandhi offers his take on how the distribution scenario would shape up in 2007 in the wake of digital cable and direct-to-home (DTH) penetration.

The year 2006 was when broadcasters consolidated their businesses and made money on the second bouquet. The incremental increase in revenues for distribution companies largely came from this.

The combined growth in pay TV revenues was in the region of Rs 2.5-3 billion. This included the southern channels and later in the year Sun TV, the most popular channel in the region, also turned pay. Star One, which had problems in Mumbai and Kolkata, got established. We also made money from our second bouquet.

Direct-to-home (DTH) also became a reality in the year. Though it took time, Star India and SET Discovery bouquets were available on DTH as rates became realistic.

On the cable TV front, progress was made towards implementation of Cas (conditional access system). The Telecom Regulatory Authority of India (Trai) came out with more definite regulations and there was intervention from the various courts. Unlike 2003, Cas definitely is more structured and planned this time. It, however, remains to be seen in 2007 whether it turns out to be a success or not.

The big story in 2007 would be DTHccccccccccccccccccccccccccccccccccccccccccccccccccc and digital cable. Pay broadcasters would expect to net Rs 3.5-4 billion from DTH and the bulk of it would be incremental without eating into cable TV.

We should see deals being struck on all addressable platforms. Digital cable, voluntary Cas, Headend-In-The-Sky (HITS) should all become a reality and make economic sense to distribution companies like us. As an industry, we should support unregulated Cas. Things will take time to settle down till digital gets in mass volumes.

The big problem area should be a la carte pricing, but I don't see channels deciding to price themselves individually below Rs 5. We would also see bouquets emerging in the Cas areas. It won't be easy for consumers to forget the channels that they were receiving for so long. Family packages, properly priced, should take off. Pricing and a lot of other things, though, will depend on volumes.

Equations will change in carriage payouts to multi-system operators (MSOs). As ratings towns get added, carriage will move there. And these towns would not have a digital story. But I don't see budgets of broadcasters towards carriage really jumping. What would happen is that they would be picking and choosing the places where they want better placement and carriage.

IPTV will see trial runs in 2007 but the commercial launches should happen only a year after that. All in all, there will be lot of changes in the marketplace in 2007.

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