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CAS: Consumers aware, but apprehensive

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MUMBAI, June 8

DESPITE the lobbying by broadcasters and posturing by multi-system operators, it is the consumers' response to the conditional access system (CAS) that will ultimately determine the outcome of this highly contentious initiative.

With July 14 being the deadline for rollout in the four metros, it appears that a majority of consumers are aware of CAS but are very apprehensive of its effect, according to a study by Starcom Worldwide and Hansa Research Group.

About 80 per cent of consumers surveyed in the four metros where CAS will initially be rolled out are aware of CAS and the deadline to install a set-top box (STB), but only one out of four upper-end households is willing to buy an STB immediately.

As for pricing, consumers are not willing to pay more than Rs 625 by way of deposit for an STB, and three out of four consumers think that CAS will increase their monthly cable bill (cost of STB and channel outlay).

"It's amazing to see that the stated intention of the Government in bringing in CAS, and what people themselves perceive are at opposite extremes," Mr Puneet Arora, Media Director (Strategy & Research), Starcom Worldwide, said.

"Viewers are convinced their expenses will go up, both as a result of the spend on the STB and increased monthly outgo."

The study - in which 413 respondents participated - was conducted via telephone among chief wage earners in SEC ABC households in Mumbai, Delhi, Kolkata and Chennai.

As for willingness to buy STBs, a third of the respondents in Mumbai and Chennai said that they would buy immediately, while 70 per cent of respondents in Kolkata were unwilling to do so immediately.

About 57 per cent of respondents in Delhi were still undecided.

When it comes to pricing, 56 per cent of respondents said that they would buy an STB if it costs at Rs 2,000, and only 16 per cent were ready to buy one at Rs 4,000.

The survey was conducted shortly after the Government announced a temporary reduction in customs duty on STBs, resulting in a significant price cut.

Since the price elasticity for STBs is so high, initial penetration would be driven by the price-value equation the Government and the industry can offer, the study said.

Also, respondents in Delhi and Kolkata said they would buy STBs, while respondents in Mumbai and Chennai would rather rent them.

Viewers in Delhi and Kolkata are willing to pay about Rs 870 and Rs 720 respectively as security deposits on STBs, while respondents in Mumbai and Chennai want to pay only about Rs 550.

Over 75 per cent of respondents also said that they would not buy an STB until "things settle down", and more than 50 per cent are concerned about the quality of STBs.

As for its impact on the monthly cable bill, only about 30 per cent of respondents believe that CAS would mean not paying for channels they did not want to watch.

And only respondents in Mumbai expect their monthly cable bill (channel outlay) to go up marginally. In the other metros, the post-CAS cable bill is expected to be lower.

All in all, the viewer is extremely value-conscious and is willing to wait and watch "till the mist clears around CAS" - even if it means losing out on favourite programmes in the interim, the study said.

"Obviously, the industry has not got its act together. The uncertainties of what viewers will get and what they will need to pay is driving most of them into a state of indecision," said Mr Ashok Das, Managing Director, Hansa Research Group. "Acceptance at the consumer level will be slower than what most players seem to expect."

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