Parliament, yesterday, paved way for introduction of conditional access regime when the Rajya Sabha passed the amendments to the Cable TV Regulation Act, 1995. Since the Lok Sabha had earlier approved the Bill in May, it will now become law. The new CAS regime is expected to reshape the television broadcasting landscape with viewers exercising their right to choose before they pay up.
Aggressive channel marketing and promotion, like any other FMCG or service, and subscription-price wars will become the order of the day. Advertisers are also expected to revisit their current media budget allocation practice since the viewership universe will be further spit up.
But first about the smooth passage of the Bill in Rajya Sabha yesterday and I&B Minister’s viewpoint. Moving the Bill, Mrs Sushma Swaraj said that it addresses the consumer’s resentment over the rising subscription prices since in the new regime they will pay for what they view. With little dissent in the Upper House, with a notable exception on CPI M’s Nolitpal Basu, the Bill was approved with a voice vote.
The Bill would spilt the cable and satellite television universe into two part – those who access only ‘free-to-air’ channels and others who also access ‘pay-channels.’ In an official release last night, the Ministry has stated that “The Government will prescribe (thru the provisions of this Bill), from time to time, the maximum amount to be paid by the subscriber to the cable service provider for the ‘basic service tier’ consisting of the bouquet of notified ‘free-to-air’ channels and to determine the number of channels to be included in this ‘tier’ and the maximum cost for the same in different States/cities/areas of the country, from time to time.” The pricing of pay channels remains at the discretion of broadcasters.
Commenting on the crucial issue of the cost of Set-top-box, needed to regulate the access, Mrs Swaraj said - “As per Cetma's estimates, if one lakh STBs are manufactured, then the cost would be around Rs 2,500, while if 10 lakh STBs are being manufactured, then the cost would be Rs 1,500. "
It is notable that the Bill mandates a phased implementation with metros getting wired in next 6 months.
Clearly Broadcasters were expecting this. As reported, Broadcaster’s nodal body IBF had expressed supported to the Bill – turning around on their reservations expressed earlier. Star Network had yesterday announced a substantial 25% rate cut signaling the mood.
Speaking with exchange4media last night, Star COO Samir Nair said, “We welcome Conditional Access System. Hopefully it will address the fundamental problem of under-declaration and bring in more transparency. It would also provide consumers more value and they will be able to exercise choice.”
Cable Operators, who have been pushing for CAS for long, have expressed their satisfaction. Said Jawahar Goyal of Siti Cable, “We have supported CAS for long and happy with its passage.” Other leading MSOs have shared similar opinion.
Moving on to the impact on advertising budget allocations and broadcasting practices, the Bill will split the C&S universe into two part – those that access only Free-to-air channels and once who access pay channels also. This will call for a closer look at viewership and channel subscription data, specific data for which will be available with Broadcasters thru their Subscription Management Systems. And given that consumer might exercise frequent choices of programming amongst the pay channels, Broadcasters are expected to take channel marketing and promotions with gusto.
Says TAM CEO LV Krishnan, “One positive fall out of CAS is that serious marketing of TV channels will start happening. Till now the game plan was distribution led. Now with CAS coming in – primary war in marketing will begin for getting to the end consumers.”
In this new competitive regime, are the current subscription prices set to fall? It is a cautious Yes. “Subscription rates will go down – but it would not happen in a hurry. Once under declaration is stopped and channels get their fair due, subscription rates will go down,” explains Jawahar Goyal. Samir Nair of Star is in unison. Says he, “We have been planning reduction in subscription fee for a long time. I believe yesterdays reduction is in sync with what CAS attempts to do. Good value in terms of content and price would definitely prove to be an advantage.”
So after months of wait, CAS regime has finally arrived. While the changes it ushers will be gradual, make no mistake. It is slated to change the rules of the game. In next few days one expects series of announcements and perspectives. exchange4media will keep a close track of this development and keep you posted.