Channel burping
By Venkatachari Jagannathan | 18 Mar 2002
Curiously, consumer organisations that often fight against government schemes like dams and bridges have so far observed a studied silence on the issue. Not any more, says Consumers Association of India (CAI) managing trustee R Desikan. We are taking up the matter seriously.
The Chennai-based CAI has decided to take up the cable TV subscriber issues by forming a separate wing. The cable TV user is compelled to pay more every year towards subscription, while in fact he should be paying a lesser amount as every year passes, says Desikan. After the Star group of channels, which hiked the subscription rates to Rs 40 from Rs 24 over a period of nine months, its rival, the Zee-Turner combine, has also decided to raise its subscription rates.
The cable operators opposed this on the ground that they will not be able to pass on the second hike in a quick succession to their subscribers. And Sun Cable Vision (SCV), the sole multi-services operator (MSO) in Chennai, decided to switch off the Zee-Turner group of channels, like Zee Movies, Cartoon Network and others, till the issue is sorted out.
For SCV, part of the Sun TV network, switching off the Zee channels is sort of a sweet revenge. Years back, when the Sun TV head honcho Kalanithi Maran approached the Zee group for using their transponders to beam Tamil programmes, he was snubbed by a junior Zee official.
The sudden withdrawal of popular channels and the forcing of unwanted pay channels on them by way of packaging have forced many a subscriber to approach CAI for an immediate solution. We carried out a detailed investigation into the entire cable television business in Chennai and found that the consumers are getting a raw deal, while the local body is cheated of its legitimate dues, says Desikan.
For those who did not know, the cable TV industry is a three-layered structure. The top slot is occupied by channels and broadcasters. They who are of two kinds - pay and free-to-air channels. Then comes MSOs, who relay the channel signals to the last layer - the cable operators - for onward transmission to individual households through cables. In small towns and rural areas, where the demand is only for free-to-air channels, it is the cable operator who receives the signals directly from the channels.
In Chennai there are two MSOs - SCV and Hathway Cable. But for all practical purposes it is SCV that calls the shots as the two had signed a non-compete deal sometime back. A CAI study says there are around 15 lakh cable TV subscribers/points in Chennai. And the total amount collected by the 900-odd cable operators every month is around Rs 12. 25 crore. The non-refundable deposit on these connections totals around Rs 35 crore.
Out of their total collections, the cable operators have to pay the MSO - SCV (Rs 75) or Hathway Cable (Rs 85) - per connection for receiving channel signals. While at an average each cable operator connects around 500 houses, he declares only a miniscule figure to MSOs, and pockets the balance, says Desikan.
Also, the cable operators declare a different figure to municipal authorities, as they have to pay Rs 20 as tax per connection. As per our estimates, the Chennai Municipal Corporation should be getting around Rs 1.8 crore as tax. But it gets a mere Rs 25 lakh, says Desikan.
The claims made by each channel owner while declaring the viewership of their channel to get advertisements are several times more than the actual money he receives from his viewers. This means, either the viewership claims are highly inflated or the money paid by the cable operators to the channel is merely 1 per cent of the total collected from consumers, he says.
The truth is, however, not so obvious. Under-declarations and over-declarations are common practices in this business. A band of bandits is an apt term to describe cable operators, MSOs and pay channels, as the trio makes a fast buck in the whole messy scenario. The first two categories under-declare their subscriber-base, while the third one resort to over-declaration to charge fancy advertisement rates. This in turn increases the prices of advertised products - and the consumers have to bear the brunt for that, too.
Desikan is upset. The competition among the channels to get advertisements is so high that they think it is legitimate to demand more and more from their subscribers. In fact, exactly the opposite should take place. If the MSOs and broadcasters are to get more money from the operators then they have to systematise their functioning. If that happens the subscription charges for households will even come down by half.
While that can only happen when a conditional access system is in place ,Desikan is advising the subscribers to follow a few simple procedures to bring in some sort of accountability on the cable operators part. Individual households should demand receipts for all payments made to the operators; they should not pay for more than one months subscription in advance.
One should also demand from the operator a written contract and the list of channels he will offer, says Desikan. It is obligatory on the part of the broadcaster not to package channels. We are convinced of the need for the cable TV consumers to get together and seek and demand value for the money they pay as subscription.
CAI will soon file several cases against erring cable operators in consumer courts.
