Meeting on CAS to finalise rates of pay channels ends in failure

New Delhi: There was no concrete result out of the meeting between television broadcasters and cable operators to finalise the rates of pay channels under the conditional access system (CAS).

Even though the broadcasters were expected to announce individual prices of pay channels as well as prices for various bundles and discuss the issue of distribution margins with service providers, multiple system operators and last-mile operators, only a 'discussion paper' was circulated.

"According to the discussion paper, the wholesale prices of various bundles of channels work out to about Rs 175. If the distribution margins are added to the basic tier fee, the set-top box rental and taxes, the consumer will end up paying over Rs 500 per month," says a Cable Operators' Federation of India spokesperson.

Hence the cable operators have rejected the proposals laid out by the broadcasters. In frustration, the government has threatened to crack the whip on the broadcasters saying that it will consider changes in the Cable Television Act to regulate them in order to ensure a smooth rollout of CAS.

Information and broadcasting ministry secretary Pawan Chopra says the pay broadcasters do not seem serious about the rollout of CAS. "In fact, they are trying to protect their own individual turf rather than looking at the larger objective of CAS. The government will consider coercive measures if the pay broadcasters do not fall in line."

Also there seems to emerge a clear split between the homegrown Zee Telefilms and the 'foreign' ones — Star, Sony and ESPN. The former one led by Zee Telefilms vice-chairman Jawahar Goel quickly spelt out that his organisation was consulted for deciding the rates. "Zee will announce its rates in the next 48 hours."

The central government's stand on the rates to be fixed for the channels is that it expects the prices to be low and it wants broadcasters to stick to their initial rates — at least during the rollout phase since it is a transition period. The government has also asked the broadcasters to work out the various discount schemes they propose to offer to the consumers.

The broadcasters have proposed to the government that they will offer bouquets of channels based on genres, instead of grouping channels according to broadcasters. The government recently decided to postpone the 14 June 2003 deadline for working out the pricing of pay channels to 18 June 2003 after a meeting with broadcasters like Star, ESPN Star Sports, CNBC and Zee, bouquets like OneAlliance and multi-system operators like Siti Cable.

Leading cable operators across the country have already announced a list of free-to-air channels for which there will be a basic tier fee of Rs 72, for which a set top box (STB) will not be required.

Broadcasters are said to be considering making a number of channels free to air in efforts to make CAS easy to digest for the consumers. Star TV has indicated that Star News is likely to be free to air and all its other channels will be pay while the two NDTV news channels, distributed by Sony-Discovery's OneAlliance without any extra cost to the bouquet, will also be available as free channels.

Hallmark Channel, which is priced at Rs 4 a month per subscriber, is planning to increase its price as it is a niche channel. Entertainment channels on the free-to-air list include Sahara Network and SABe TV.

Broadcasters believe the tiering of channel services will not be possible in the initial stages, so they are working out plans on how to put the bundle of pay channels at a lower price to drive penetration.

However, on the consumers' front there may be bad news for the broadcasters. According to a recent survey conducted by television channel CNBC, consumers in metros have doubts about the benefits of CAS, which could translate into unwillingness to buy an STB.

Surprisingly, the highest percentage of TV viewers willing to buy a STB are in Chennai, the city with the highest cable rates, while Mumbai, though ranked as having the highest number of TV viewers, are not convinced about the benefits of CAS and might not buy an STB.