The Telegraph
Since 1st March, 1999
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The operation of a liberalized market economy hinges on individual choice. The individual is free to choose from a range of competing offerings in the market place. This simple almost axiomatic truth has been obfuscated by the needless controversy in which the Conditional Access System is mired. The CAS, once it is introduced and the teething problems are out of the way, will ensure that the consumer will only pay for what he wishes to see. This choice will not be dictated or influenced by what a cable operator has to offer. The consumer will thus become the sole arbiter of his viewing preferences. It is a bizarre situation indeed when those who in the recent past have been the most vocal denouncers of the alleged misdemeanours of cable operators have now become critics of CAS. These critics are now concerned about the drain the CAS will entail on the consumerís purse. There are two rather different points to be underlined here. One is at the intellectual level and the other at the purely empirical level. The former is related to one of the fundamental tenets of a market-driven economy. All things have a price tag attached to them and this price is determined by the laws of demand and supply. Nothing, not even the watching of cable television, can be free. The price of a bouquet on CAS cannot also be arbitrary. If one is priced too high, the demand for it will inevitably fall leading to a fall in prices.

The empirical point, if one follows certain studies, is more easily made. The average price being paid by the consumer in the four major cities varies between Rs 150 and Rs 200. After the introduction of CAS, consumers will have the option of watching around 30 free-to-air channels covering a wide range for an outlay of Rs 72 per month excluding taxes. Those who can afford to pay more can then choose the other channels they want to watch and fit them into their budget. In addition, those opting for particular pay channels can do so when they want to over a specific period. Thus cricket lovers can pay for a sports channel only when cricket matches that they want to watch are being telecast. Both in terms of money and in terms of convenience the CAS is tilted in favour of the consumer. In the present system, the consumer is forced to subscribe to a number of channels which he never bothers to watch.

The principal reason for the opposition to CAS from some of the satellite channels is their perception of a sudden dip in advertisement and subscription revenues. According to one estimate, television advertisement revenue hovers somewhere around the Rs 3,000 crore mark but has remained stagnant there for some time. In a post-CAS situation, there is the danger of a sharp dip in advertisement revenues. But if the model for several developed countries holds for India, the loss of advertising revenue could be compensated over time by a rise in subscription revenues. The time lag is what is worrying most people. But this is not a sufficient ground to oppose CAS. Priorities of business and investment are poised to change as television begins to be driven by market forces.

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