According to a report released by DSP Merrill Lynch, in a post-CAS scenario, a customer would have to pay more to watch less than what he/she is currently watching. The broadcasters and multi-system operators (MSOs) would be most benefited as the former could increase revenues by about 30.7 per cent while the latter could have better business models, as they would have virtual control over the last mile through control of set-top boxes.
Currently, the cable subscription rate per household in the metros is anything between Rs 200-250 per month. However, once CAS is put in place this would go up due to additional expenditure on set-top box and the basic tier fee, besides the overall increase in subscription rates.
The consumer would either have to make an initial investment in purchasing a set-top box, which could be around Rs 2,000 or else pay a monthly rental. Market estimates the monthly instalment (EMI) for the set-top box (STB) to be around Rs 100 and the basic tier fee for free-to-air channels to be around Rs 75. Add to this the monthly bouquet rates and the total subscription could go up to Rs 357 (on the prevailing rates) and Rs 378 (on the revised rates effective January 1, 2003).
According to market estimates if a household were to subscribe individually to about 13 pay channels comprising Star Plus, Star Movies, Zee TV, Sony and SET Max, it would have to shell out close to Rs 260 per month (excluding basic tier fee and STB charges).
The Morgan Stanley report on the media sector has pegged the subscription revenues at Rs 6,000 crore. However, industry analysts say that the broadcasters would have to rethink their pricing strategy.