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Tuesday, Aug 12, 2003

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Row erupts over incentive schemes for pay channels

Nithya Subramanian

New Delhi , Aug. 11

WITH just a few weeks left for the implementation of the Conditional Access System (CAS), fresh differences have cropped up between the cable industry and the broadcasters. This time round, it is on the issue of who will offer incentive schemes for various pay channels to the consumer.

The broadcasters are of the view that the incentive schemes should be offered by the cable industry, while the latter feels that the broadcasters and the cable service providers should do this jointly.

"It is for the cable operators to offer schemes. We will give them their commissions and it is up to them to ensure that the channels are pushed," said an official from a television channel.

However, a multi-system operator (MSO) said that while it was the duty of the cable operator to come out with schemes to push set-top boxes (STBs) into households and make public the prices of pay channels, pay channel schemes would be devised along with the broadcasters.

The pricing of pay channels has been a matter of controversy, with the Government of the view that the prices announced last month were on the higher-end. "In fact, in the first meeting of the newly set-up Implementation Committee last week, MSOs have indicated to the Government that if pay channels do not come up with new, lower prices, the cable industry would offer these prices to the consumers," said an industry source.

Meanwhile, broadcasters have started negotiations with MSOs and cable operators on the commissions or margins that would be offered to the cable service industry. "On an average, the revenue share split between the broadcasters and the cable industry would be in a 50:50 ratio. However, the share could be anything between 70 per cent and 30 per cent (for the cable industry) depending on the popularity of the channels," said a cable industry source.

According to broadcasters, cable service providers would not have to spend much for marketing popular entertainment channels such as Star Plus, Zee or Sony and hence a lower revenue share. "However, other niche channels would require more promotional effort on the part of the cable operator and hence a higher share," said the official.

Also, the revenue share spilt for various service providers would differ from metro-to-metro. "For instance, in Chennai or Kolkata where regional channels are popular, a higher percentage of the revenue for popular entertainment channels would be given to cable operators," the official added. Higher disclosure of actual households would also be rewarded, he said.

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