Star TV plans to hike cable subscription rates from Rs 30 to Rs 42 per connection from January 2002. As a result, cable subscription rate across the country will go up by at least Rs 25 to Rs 40 per cable home. This move is expected to spark off yet another war between cable operators and Star TV.
Recently Sony TV became a pay channel charging Rs 20 and Zee bouquet costing Rs 30 to the cable operators. Turner package costs Rs 11 and ESPN-Star Sports Rs 16 in addition to the Rs 15 entertainment tax levied by the government.
According to Star India CEO Peter Mukerjea, “We have 38 million cable homes across the country and we receive payment for just 6 million cable homes. Because of the under declaration of subscribers by the cable operators, we have not option but to increase prices.”
The industry was expecting Star to cut its cable subscription rates. The reason behind the hike is Star’s confidence in its market share. Star Plus has 34 per cent market share among the Hindi entertainment channel compared to Zee’s 12 per cent and Sony’s 16.
According to the company sources, they are charging the cable operators and not the end subscribers. It is sad that just 6 million subscribers in the country share the cost of 38 million cable homes. Cable operators and MSOs have to declare true figures. Broadcasters argue that 35 million cable homes pay an average of Rs 150 to 30,000 cable operators generating an annual revenue of Rs 6,500 crore. Broadcaster claim that they realise around Rs 750 crore from pay revenues.
Mukerjea said that Star is ready to cut down its subscription cost once they get a reasonable declaration from the cable operators. But a large section of cable operators are fuming.
Industry observers said that already Hindujas’ InCable, Zee’s SitiCable and Raheja’s Hathaway are bleeding. Cable operators have already taken up the issue to the I&B ministry that broadcasters should pay entertainment tax as they are the content providers.