Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

TODAY´S NEWS

Rising subscription prices: Changing dynamics of television access business - Part 2

Rising subscription prices: Changing dynamics of television access business - Part 2

Author | Nikhil Gupta | Tuesday, Dec 10,2002 6:32 AM

A+
AA
A-
Rising subscription prices: Changing dynamics of television access business -  Part 2

There are three factors that will collectively change the cable TV distribution landscape in India firstly the CAS bill, which is pending in Rajya Sabha, Television on- fibre- optics and the Direct -To- Home (DTH).

CAS Bill: The bill was listed in Rajya Sabha on 26th November 2002, but it's occupies a lower place on the list, so, the approval seems to be a matter of few days. The bill aims at bringing about addressability in the conundrum of Cable TV distribution in India. It would segregate the channels and thus 'viewership' into two categories. First category will consist of free-to- air channels, which will be a kind of vanilla pack, then there will be the paid channels. Few experts say, that the broadcaster may loose advertising revenues in the short run, due to fall in viewership figures, as a few pay channels will be getting out of the package. But in the long run it stands to gain from increase in the declaration of subscribers. It's possible that for the broadcasters, the decline in subscriber base is compensated by increase in the declaration levels, in the short run. According to exchange4media estimates, the current declaration levels are close to 20%, if the declaration levels go up only to 50% in just the top 4 metros, the broadcasters can expect to gain as much as Rs.2.5 billion in revenues.

Sometime back TAM, in a presentation said, "There would be intense marketing activity in metros where there are multiple MSOs operating." So, we can expect some fire in the metros with multiple MSOs. Bouquets would possibly cease to exist as the viewer will get selective about the content. The niche channels with unique content would try to occupy their market segments, and benefit from premium pricing and focused ad spends.

In the long run however all the players in the industry are likely to be benefited through the organized operational structure of the industry.

Television-on-optical-fibre: With players like Reliance Infocom, Hughes Tele, Tata and Zee working on broadband projects, the country is expected to get wired very soon. Broadband means any high capacity data communication system that can carry communication in more than one form-voice, video and data. Reliance Infocom has been setting up 60,000 km fibre optic cable network, which is expected to cover more than 1,500 cities, it also plans to set up retail outlets to sell broadband. Though, the optical fibre cable can be used for carrying any kind of communication (voice, video or data), its ways of usage is yet to be determined by the market. However, local cable operators are a huge market as they can use the lines to offer high-speed Internet connections to their subscribers. Few players have already started moving in that direction. Like, In2cable, backed by IndusInd Media and Communications (IMC) is offering Internet access to its 29 million subscribers, in phases, through hybrid fibre-optic coaxial cables.

DTH: This is another option the customer would have possibly in the next two years. Being capital intensive, in addition to the reluctance of government to increase the FDI limits in DTH more than 20%, this service might take time to reach to the end consumer. With Star TV planning to bring in DTH into Indian homes by 2003, as well as pricing it equivalent to the cable charges, the customer is likely to have a range to choose from.

The Indian cable TV industry that was born in year 1991, has reached a level where the debate is between the offerings of different modes of services, all coming up with viewer friendly options, all offering carefully designed after digging into the market research data and the gut feel of the players. At the end, in line with the conclusions of almost every market analysis, finally the 'Consumer is the king'.

Tags: e4m

Write A Comment