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Skirmishes in the sky
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In the wake of the channel boom, television has taken over most drawing rooms. But with a steep hike in cable charges, it's now subscribers versus cable operators. PRINCE FREDERICK scans the scenario.
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IN RECENT months, the air in Chennai has been thick with charges - cable television operators and subscribers have been trading them against each other. In point of fact, it is "charges" which is the bone of contention. We have been reading reports about this conflict for a couple of months now. But the truth is, the two constituencies have been having a running battle for quite some time; it is only now that the simmering disenchantment has come to a boil.
To all appearances, the bitterness ran deep. The subscriber felt he was paying more than what was fair; and that the hikes in subscription rates had become "frequent" and "militated against reason". The cable operator winced that he was forced to carry the can though he was not the only one responsible for the hikes. He complained that he himself had to pay through the nose, because the pay channels were "effecting arbitrary hikes". Now and then, he raised the banner of revolt by blacking out channels that "put up their price". The cable operator said he was log-jammed between pay channels, multi-system operators (MSOs) and subscribers. "Do not forget the service tax (five per cent) and entertainment tax," he yelled.
If events reflect thoughts, then residents of Chennai do not seem convinced that these reasons justify the hikes. On the other hand, they seem immensely convinced that their demand that operators stick to the December 2002 charges till the introduction of Conditional Access System (CAS) in mid-July, is absolutely reasonable. There hangs a tale.
Residents appear to have launched a "people's movement" against the hikes. Resident welfare associations around the city, under the steam of Exnora International, have joined to give a unified voice to the subscribers' grievances.
"More than the hikes, it was the treatment some of the cable operators meted out to the subscribers that was unpalatable," says M.B. Nirmal, advisor, Confederation of Cable TV Subscribers' Associations of Greater Chennai (CCTSA). "There was an air of intimidation."
"After fruitless requests to cable operators to cut down on subscription rates, we sought the MSOs' intervention. But their attitude was like `it is not our responsibility'," says Sivakumaran, general secretary, CCTSA. "They agreed initially to provide the `feed' to new operators who were offering connections at lesser prices; later, they reneged on the promise."
It is said that in India there are more cable TV connections than telephone connections. Given this fact, Indians probably take the cake when it comes to being "cable-bound". So it must have been no small sacrifice to opt for a "cable-less" life when operators refused to lower service charges. Sivakumaran says this obduracy paid off in certain cases. "Resistance from residents was complete. To cite an example, Residents' Welfare Association, Phase II, Anna Nagar, Western Extension, stood to its guns that the subscription rate, which had been raised to Rs. 230 be reduced. The cable operator severed connections in the area. The residents went without television for a month; the cable operator subsequently fell in line."
In many localities, residents seem to be rolling out the red carpet to operators who are providing free-to-air (FTA) channels for Rs. 60 a month.
"Many localities in Chennai have welcomed FTA service from such operators. When we were on the lookout for such operators, some interesting facts came to light. We learnt that Prakash Cable Vision has been providing such a reasonably-priced service for four years to residents in and around MGR Nagar. Its owner says that he can extend the service up to a radius of 10 km - for example, up to Jairaj Theatre, Saidapet or Vadapalani (in another direction)," says R. Govindaraj, advisor, CCTSA.
"We are receiving calls from many area welfare associations seeking information about such operators," says V. Ramaswami, vice-president, CCTSA.
For the record, this amount is less than the maximum charge (Rs. 72) the Government has stipulated for the basic services package of a minimum of 30 FTA channels, after CAS comes on stream.
That brings us to the talking point - CAS. It has to be conceded that the system remains a "wild card", as we do not know much about how (and how much) it is going to change the fortunes of each stakeholder in the cable TV industry. Much will be known only after it goes critical. Be that as it may, one hears a collective `aye' for it. When cable television entered the country, it was seen as a cash cow and more and more people wanted to get in on the act. All the players seemed to have a free rein, and the lack of a proper regulatory mechanism soon became glaringly evident. Industry watchers shouted from roof-tops that the air had to be cleared of inflated figures of viewership, under-declaration (of subscriber base) and tax evasion. CAS is said to be a big step towards fumigating the industry of these "evils".
"After the introduction of CAS, many channels that are currently "pay" will go "free", as they will not then be able to play the numbers game to woo advertisers," says Govindaraj.
"In the West, pay channels are free of advertisements. In India, the concept of pay channels seems to be skewed. Should one pay to waste one's time watching advertisements?" asks Nirmal.
Post-CAS, the subscriber can call the tune, and the Government can have a whip hand. The subscriber can "choose and reject" channels in a wider sense of the terms; bouquets cannot be thrust down his throat any more. Thanks to the transparency the Cable Television Network (Regulation) Amendment Bill brings in its wake, there will be increase in tax revenue for the Government.
Where cable operators are concerned, CAS is expected to cut both ways. "CAS is a welcome development," says V. Venkatesan, president, Federation of Cable Operators. "But post-CAS, the number of cable operators in the city will be halved; only the big players can survive the changing equations."
He says that already the new tax regime is draining the cable operators dry. And the initial investment and new additional work, post-CAS, will be a hard hoe to row for the operator who has until now run the show on a shoestring.
It is said that the two MSOs - Sumangali Cable Vision and Hathway - will be supplying the set-top boxes (STBs). As the MSOs are keeping their cards close to the chest, STB prices are anybody's guess. Ballmark estimates from industry watchers peg them at somewhere between Rs. 4000 and Rs. 6000.
"A few months after CAS is introduced, STBs are likely to be available in the open market," says Venkatesan.
However, only a section of the subscribers are expected to procure set-top boxes immediately after CAS is introduced. A good number will desist, because they will have to dig deep into their pockets; another good number, because they will prefer to play the waiting game.
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Metro Plus
Bangalore
Chennai
Coimbatore
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