MUMBAI / NEW DELHI: It can only be termed a calculated gamble. ESPN Star Sports today announced a 33 per cent hike in its monthly package rate from Rs 24 to Rs 32 per subscriber, effective 1 December.
How the cable fraternity responds to this latest increase remains to be seen but if a big ruckus is raised over the rate increase, it could well add some momentum to I&B minister Sushma Swaraj's attempts to push through the conditional access systems (CAS) Bill in the Rajya Sabha, Indian Parliament's Upper House, next week.
Surprisingly Hinduja Group cable MSO IN CableNet took the increased rates as a matter of course. COO Rajiv Vyas said: "The increase does not impact us. We've got a two-year revenue outflow contract in place which was signed in March and is valid till 2004. Our payments to ESS are based on this agreement. These are the kind of deals we've entered into in most places."
It needs noting that IN CableNet has an exit clause in the event of CAS coming in. Vyas said: "As far as CAS is concerned there are exit clauses in place since the revenue dynamics would change in such a scenario."
When contacted, Shamim Shaikh, one of the promoters of the 7 Star Cable Networks MSO that is dominant in the Andheri-Juhu area of west Mumbai, stated that he had yet to receive an official notification from ESS on the matter. He was however, quite categorical that he would be passing on the increase to the subscribers.
ESPN Software managing director Manu Sawhney was quoted in an official release as saying: "We are committed to providing top quality sports content to viewers on our networks. The ever increasing cost of creating and acquiring compelling content and the issue of under declaration, which mars our industry compels us to revise our prices on a periodic basis."
The price hike seems to be timed just ahead of the upcoming cricket series where India tours New Zealand in December, for which ESS has exclusive telecast rights. However, two things may go against ESS as far as a negotiating ploy is concerned. One is that New Zealand is not a side that gets the adrenaline flowing among the Indian public to the extent that an England or Australia might and secondly the match timings are not favourable. Matches that start at 4 am in the morning are the worst possible as far as viewing choices are concerned.
How the trade responds to this hike will be closely watched by the likes of Star and Sony Entertainment which are expected to make their own announcements as to whether the new year will see them increasing rates or maintaining status quo as the cable industry has been demanding pending the CAS legislation.
It is learnt from industry sources that Star India is also likely to make an announcement within the next two weeks regarding subscription rates for its bouquet of channels. However, it is not known at present whether Star will announce an increase in its bouquet price from Rs 40 per month per subscriber or go in for a freeze of subscription rates.
