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A couple of
years from now, cable television households will not be paying a
flat monthly subscription for getting (though not necessarily watching)
as many as 100 channels. They will instead be getting a bouquet
of free-to-air channels, for which they will pay the cable operator
a small monthly fee. Households that choose to watch subscription
or pay channels, on the other hand, will be billed ‘by the
minute’ depending on the time spent on viewing a particular
channel. This will be enabled by a digital set top box in homes
wanting to watch pay channels and a subscriber management system
at the cable operators end.
But, first
steps first. The country has embarked on the first step in that
direction by deciding to mandate what is being called a conditional
access system (CAS). Keeping in mind the high cost of digital set-top
boxes, India’s initial steps towards CAS are likely to be with
analogue set top boxes. CAS may become a reality in the country
in the next 12-24 months, according to industry experts. The CAS
roadmap and its impact on the industry players:
The background:
There are about
40 million cable television households in India. Broadcasters, cable
operators and the subscribers all have their own set of problems
with the current system. Broadcasters say that the cable operators
are under-reporting the number of households connected and denying
them their rightful share of revenue. Cable operators are peeved
at the arbitrary hikes in subscription rates by the pay channels.
Subscribers are meanwhile being forced to pay for channels which
they do not even watch.
The Transparency
Argument:
CAS, mandated
by law, would ensure that the complaints of all the protagonists
of the industry are addressed. Since, cheating on the number of
subscribers is almost impossible under CAS, the broadcasters would
get their due share of subscription revenue. The subscribers are
likely to end up with a lower bill, since they will only have to
pay for those channels they care to watch.
Investment
required:
The addressable
set top box, which will be analogue to begin with, would cost upwards
of Rs 3,500. Even if a quarter of the roughly 40 million cable TV
households want pay-channels, we are looking at an investment of
a whopping Rs 3,500 crore or more. The cable TV household will have
to bear a major chunk of this with subscription channels subsidising
some part of the cost. The Consumer Electronics and TV Manufacturers’
Association has sought a reduction in the import duty on set top
boxes (currently 35 per cent) to make them affordable.
At the cable
operators end, investment in the subscriber management system will
be required, in addition to head-end equipment costs of about Rs
50,000-100,000 per channel. Some industry players feel that the
investments required for managing a CAS would drive the smaller,
independent cable operators out of business.
The Time
Factors:
Mandating the
CAS would require an amendment to the Cable Act. There has been
talk of an ordinance to effect that. However, there can never be
much clarity on the time period these, or any other legislative
changes, could take. Another time-guzzler is likely to be the Bureau
of Indian Standards (BIS), which will be entrusted with the task
of setting out the technical parameters of the addressable set top
boxes. The government is committed to ensuring that adequate time
would be allowed for the procurement through import or local manufacture
of the set top boxes before making CAS mandatory. "We do not
want a repeat of the CNG chaos," information and broadcasting
minister Sushma Swaraj said recently, referring to the crises caused
by Delhi government’s decision to make CNG mandatory for public
transport vehicle without ensuring adequate CNG supply.
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