Star, INCablenet and Hathway Cable & Datacom intend to conduct a joint survey to identify under-declarations among local cable operators and help increase the paid connectivity. This joint move may have long term ramifications for the cable industry.
The cooperation of a broadcaster with the multi system operator (MSO) to ramp up the declared paid connectivity from local cable operators will be the first experiment of its kind in the country.
A business plan has been prepared and Star and the two MSOs are close to reaching a settlement. The experiment will be conducted in Mumbai, where under-declarations are very high because of the intense competition among the MSOs.
The joint strategy is to coerce local operators into paying for more subscribers, as it will ensure better negotiation power and may have long term ramifications, if the Conditional Access System is not introduced. The broadcaster will improve its subscription earnings and the MSO’s income will increase, while the local operator’s margins will be further squeezed.
The implementation, however, will be difficult. The survey may involve a common agency, hired from outside. The way out is to talk to the operators and pressure them to increase their declarations. The unity among the broadcasters and the MSOs will be crucial. Star can refuse to give decoder boxes to the errant operators who threaten to leave the MSO network.