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Big cable networks fed up with pay channels

22-February-2001
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Big cable networks fed up with pay channels

Big cable networks, or multi-system operators fed up with the 'extortionist' tactics of the pay channels and are hitting back by charging huge 'carriage fees' to new channels wanting instant visibility.

'Carriage fees' or payment by new channels to cable networks for delivery to television homes, was a hush-hush phenomenon earlier. Sony Entertainment Television, when it was first launched four years ago, paid huge amounts to cable operators for immediate connectivity and good positioning. Now it is the norm and is 'legal'.

In a set-up where satellite channels only enter the drawing room (or the bedroom) through the intricate system erected by the country's 30,000 cable operators, the message to the newer channels is clear: "Pay up, or you will remain invisible."

The new Hindi entertainment channels -- SABe TV, B4U and Sahara TV -- have all paid substantial 'carriage fees'. The regional channel 'Tara', promoted by Rathikant Basu, too paid a sizeable levy; and now it is the turn of the recently launched news channels.

The new entrant, the Hindi news channel 'Aaj Tak' from the TV Today stable, says it is resisting the 'carriage fees' culture but claims the market has already been 'spoilt' by channels like SABe TV and B4U who have forked out huge amounts for being on or close to the prime band.

The price varies between Rs eight lakhs to Rs 25 lakhs a month for a city like Mumbai for one big network. There is a secret veil around the quantum of carriage fees being charged by the MSOs. Both channels and cable operators are not willing to speak about it.

Industry sources said for commissioning a new channel, the combined annual start-up rate for Mumbai and Delhi varies between Rs 30 lakh and Rs one crore.

Those who resist find that it becomes tough going. 'Aaj Tak' for instance is virtually inaccessible in Mumbai as both the Hindujas' IN Cable Net as well as the Raheja-STAR network, Hathway Communications, has blacked it out.

Justifying the new 'carriage fees' regime, Ram Hingorani, CEO of the IndusInd Media & Communications, said the increasing burden of payment to pay channels and the inability to get the network's franchisees to cough up a larger percentage of their takings had forced MSOs to search for new revenue sources.

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