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Star stumps rivals. Drops household subscription rate by 25%

10-December-2002
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Star stumps rivals. Drops household subscription rate by 25%

Even as its competitors have announced massive subscription rate hikes, Star Network has decided to drop its price by a hefty 25%. The applicable rate, from January1, 2003, will be Rs 30 for STAR bouquet comprising of 8 channels. The move is expected to create significant rethink amongst players, and might help Star come trumps in the new CAS regime.

The Star Network comprises of 8 channels - STAR Plus, STAR Gold, STAR World, STAR Movies, STAR News, Channel [V], NGC & Adventure 1.

The official release sent out by the channel quotes Peter Mukerjea, CEO, STAR India as saying, "Our focus is to provide even better value to our viewers & cable operators across the country. By reducing our price we believe that cable operators and ourselves can work closer together for the long-term benefit of the households that view our channels every day. It is our policy to continue to offer better value to all our customers. Whilst other broadcasters are increasing their price, we believe, in a reduction in price, in keeping with our policy."

According to the channel sources, the step is being taken to gain complete transparency and declaration from the cable operator community, on subscriber numbers. Reduction in rate, apparently, is an incentive to the cable operators, to curb rampant under-declaration. The channel spokesperson also indicated that 'it would help in putting a stop to increasing rates that the consumers have to pay each time the channels hike the distribution fee'.

All this has to be read in the backdrop of the other key competing channel bouquets - Zee-Turner, Alliance One and ESPN-Star affecting a substantial hike. As has been reported earlier, One Alliance has increased its monthly subscription rates from the current Rs.40 to Rs.55, effective from 1st January 2003. Shantanu Aditya, President of SET Discovery had stated, "The cable operators have welcomed the hike of Rs 15. This modest hike by us is a step in the direction to build-up confidence in each other. This should motivate cable operators to come out with actual figures of their subscribers."

ZEE Turner, is also reportedly hiking the bouquet subscription rate from Rs 42 to Rs 55.

In this backdrop, Star's reduction in subscription rates comes as a surprise.

However, what makes it an intelligent move is that CAS seems to be more of a reality now than it ever did. I&B minister Sushma Swaraj is optimistic that CAS would be approved by the upper house this week, to be more precise today, when it is likely to be tabled in Rajya Sabha. The bill has been already passed in Lok Sabha.

Meanwhile, as is known, Indian Broadcasting Foundation (IBF), has expressed its support for CAS, after its initial reservations. The IBF statement expressing the support for CAS stated, "The IBF board of directors feel that the consumers should be informed that the Pay TV broadcasters are recovering a small percentage of the revenues from cable operators "who are (to be held) responsible for the arbitrary hikes in prices."

Back to Star reducing the distribution cost of its bouquet - When CAS becomes a reality, which it might in near future, at least in big cities, and audience get to pick and choose the channels they want to watch, two things that would matter the most are good programming and good rates. While others would, then, be trying to get the pricing right to lure the cable operators and audience, STAR would be all set. And lesser subscription rate should really pay off in smaller cities and towns where the cable operators are not able to air all the channels due to the cost of equipment.

However, Star spokesperson states that reduction in the subscription rate has been introduced, 'Independent of CAS. The purpose is to stop under-declaration by the cable operators and bring in transparency'.

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