The Telegraph
Friday , October 10 , 2014
 
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STAR turn in big cable bill hike

Be ready to shell out more than double your current cable TV subscription if you want to continue watching the STARs of showbiz, sports and reality shows.

The STAR network, leader of the satellite pack with 30 channels, has pulled out of the package deals offered by multi-system operators to subscribers and gone a la carte with substantially higher pricing for each product.

For the subscriber, it means that a package priced Rs 320 a month could cost more than Rs 600 from November if he or she wants to retain the STAR channels.

The 21st Century Fox-owned network has been off air for a week in three lakh-odd cable homes serviced by Hathway, which had dragged STAR and ZEE to court for pricing packages differently for various MSOs. Hathway customers, who account for 10 per cent of the city’s cable TV subscriber base, are also being denied channels of the ZEE Network.

STAR is likely to disappear from all 27 lakh cable TV homes in town by early next week unless subscribers have opted for a la carte. “As things stand, all 30 channels of STAR India, including STAR Plus, STAR Movies and the four STAR Sports channels along with STAR Jalsa and National Geographic will be pulled out of packages by Monday or Tuesday,” a source said.

To get the channels back, subscribers would need to get in touch with their cable operators or directly with the MSO and subscribe to the individual channels they want to watch, albeit by paying a premium for each.

With the India-West Indies ODI series underway and the Indian Super League starting on Sunday, sports fans would be affected the most if all four STAR Sports channels were to vanish from their opted packages.

The STAR Sports channels have been individually priced such that MSOs would need to pay Rs 66 per subscriber. Given the margins maintained by MSOs, a subscriber would have to pay not less than Rs 120 for those four channels.

All other STAR channels would cost more. “The 30 channels of STAR India would cost an MSO Rs 204 for every subscriber. To that, we will have to add 35 per cent for the cable operator. If an MSO keeps another 10 per cent for itself, the cost for the subscriber just for the STAR channels would be Rs 300,” said the CEO of a city-based MSO.

Industry sources said Hathway’s decision to challenge the two main broadcasters — STAR and ZEE — on differential pricing backfired the moment STAR pledged to the Telecom Disputes Settlement and Appellate Tribunal that it would charge all MSOs the same amount on a la carte basis.

“STAR’s affidavit to introduce a la carte rates was accepted by tribunal and the change took effect on October 1. Effectively, individual MSOs would have to pay the broadcaster (STAR India) a la carte rates for all its channels going to different homes from that date,” an official said.

Siti Cable subscribers have so far been getting 320 channels as part of the highest-priced package of Rs 320, which works out to Re 1 per channel. STAR’s decision to go a la carte will drastically alter the equation.

An official of STAR India said: “The production costs of some of our reality shows are very, very steep, especially with stars like Amitabh Bachchan coming in. For some shows, you have to go to foreign locations. Revenue generated from distribution is unrealistic and has to increase through market adjustments.”

In non-sports channels, 75 per cent of the revenue come from advertisements and 25 per cent from distribution.

The official said MSOs offered “abnormally low rates” to keep subscribers from switching to DTH during the transition from analogue to digital, only to feel the pinch later. Premium packages in DTH are priced between Rs 450 and Rs 500 a month.

By Thursday evening, MSOs seemed to be in agreement on removing the STAR channels from their packages by early next week. “We will have to make people aware of the changed scenario as soon as possible. We will do it through scrolls and newspaper advertisements,” said Suresh Sethia of Siti Cable.