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All pay TV channels to gradually turn into free-to-air: Sushma Swaraj

24-December-2002
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All pay TV channels to gradually turn into free-to-air: Sushma Swaraj

All pay television channels are likely to gradually turn into free-to-air broadcasters once conditional access system (CAS) is implemented, according to Information & Broadcasting Minister Sushma Swaraj. And, when pay channels become free-to-air, there won’t be any need for CAS any longer, said the minister. Significantly, this is for the first time that the minister is on record on the transition of channels, from pay to free-to-air regime.

On whether there were any plans to make the Indian TV broadcasting market either subscription-based or advertising-based, Ms Swaraj said so far there was no such move. There are some countries, which follow one-source revenue model, though.

The fact that Star India recently cut its cable subscription rates for its bouquet of channels, is an indicator that gradually pay channels will opt for only ad-based revenue model, the minister said. Although Star’s rate cuts had riders attached, it sent out a signal to the industry.

Ultimately, broadcasters will want credibility, viewership and revenues, which will be possible only if pay channels turn free-to-air under CAS, the minister said. Under CAS, viewers will have access to pay channels only through set-top box, and will be able to watch the channels of their choice and pay for only them. For free-to-air channels, however, viewers don’t need set-top box. Also, a monthly fee will be fixed by the government, most likely at a sub-Rs 100 level, for around 25 to 30 free-to-air channels.

As CAS is likely to restrict pay channels’ entry into cable homes, it might make sense for broadcasters to opt for only ad revenues. So far, the ratio between ad revenues and subscription revenues in the industry is at around 80:20. Overall, revenues in the Indian television industry stand at around Rs 5,000 crore.

But, as a recent research points out, even if all channels go free-to-air, there will still be a limitation on how many one can watch. For, under CAS, there will be a cap on the number of free-to-air channels.

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