The Telegraph
Since 1st March, 1999
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Whiff of TV box deal

New Delhi, June 11: There is little that is even remotely alluring about a little black box that is at the core of a new cable television regime from July 14, but the government, broadcasters and operators have decided to dress it up so that the viewer thinks of it as an indispensable accessory.

But every way you look at it the set-top box that will decode pay-channel signals for the television is designed to make money pipe its way from the viewer through the innards of the cable industry, distributing largesse among the broadcasters, operators and government.

A day after the government nudged the broadcasters into dropping dissent on the conditional access system, channel owners went into a huddle, working out how best to sell the set-top box. The tone was set by the government, which has slashed customs duty on the set-top box from 50 per cent to 5 per cent.

Over the past four weeks, the Union information and broadcasting ministry has gone about its groundwork for CAS with a gusto rarely exhibited for its other projects.

The ball — or the box — has now shifted to the broadcasters’ court.

As the broadcasters emerged from a scheduled board meeting of the Indian Broadcasting Foundation (IBF) this afternoon, it was clear that talks with the information and broadcasting secretary yesterday had clinched a deal that will not be spelt out aloud. In short, the deal is the broadcasters who run pay channels will not turn their channels free-to-air but will nevertheless price them at a rate that will not be burdensome for the viewer. Alongside, they will work out with multi-system operators a discounting mechanism that will make it easy to sell the set-top boxes. For the first three to six months of the CAS regime, there will also be no “unreasonable hike” in cable TV rates.

The objective of the deal is to soften the impact on the viewership of the additional burden of having to buy set-top boxes. The idea behind the “packaging of the set-top box with channels” is to “seed” as many set-top boxes as quickly as possible. Once a desired level of set-top box penetration in the market has been reached, expect pay channels to up their rates.

Such a deal also suits the government politically because of civic elections in Delhi due later this year and also the Assembly polls. CAS is being rolled out in the four metros in Stage 1 but the intention is the cover the country eventually.

Though the broadcasters will not say it on record, the government urged them to work out a mechanism that will cap cable rates at Rs 200 per subscription at least for the first three months. Information and broadcasting ministry officials describe this as the “rollover period”, the gestation time that CAS is expected to take.

One broadcaster described the strategy being devised as “sweet packaging”. Another illustrated with an example from the print media industry — “subscribe to a magazine for five years and get a digital diary free”. What he did not mention was that a digital diary is not necessary to read a newsmagazine but a set-top box will be necessary to view pay channels.

The discussion on packaging the set-top box was not on the agenda of the IBF board but, since the meeting was attended by those who had talks with the information and broadcasting secretary yesterday, the matter came up and was dissected at some length.

Among those who were at the IBF meeting today were Sameer Nair (STAR), Kunal Dasgupta (Sony), Mahesh Prasad (Sahara), I. Venkat (Eenadu Television), G. Krishnan (TV Today), Markand Adhikary (Sab), Haresh Chawla (CNBC) and S.Y. Quraishi (Doordarshan).

It is likely that the broadcasters and the MSOs will announce pay channel prices early next week.

Whether the cable TV rate can be fixed at Rs 200 per month (at least to start with) — as information and broadcasting minister Ravi Shankar Prasad has wished — will depend, among other things, on the compromise that broadcasters can reach with MSOs on margins and carriage fees.

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