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Tuesday, Mar 23, 2004

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Broadcasters have to `address' this fast

Latha Venkatraman
Shyam G. Menon

Mumbai , March 22

CONDITIONAL Access System (CAS) may be off its radar screens, but addressability remains a pressing issue for the Indian broadcast industry.

The main point across discussions during the recent three-day FICCI-Frames convention was that consumer choice would be the determining factor to usher in addressability.

The consumer will be passive if addressability offers no incremental value. This can be tackled through technological offerings such as video on demand and pay per view. Content is another deciding factor. Television viewers (consumers) in the country see value in purchasing a colour television but not a set-top box (STB).

STBs should offer something more than what is already available, Mr A.K Sekhar, Country Sales Manager (Broadband Sector), Motorola, said.

Addressability will be one of the tools for driving increased consumer choice, says Mr Doug Miller, Managing Director, Walt Disney Television International, Asia Pacific.

"Competition between broadcasters and between platforms will be the key to ensuring that the Indian consumer is supplied well by a vibrant TV industry,'' he said.

In India, other delivery platforms - DTH and broadband - are emerging, but cable will continue to be a major portion of the delivery systems, many speakers pointed out.

Mr Shantanu Aditya, President, SET Discovery Pvt Ltd, cited the example of the US where 65 per cent of the delivery continues to be through cable.

For both DTH as well as broadband, pricing will be a critical issue, he said. In the case of broadband, the cost of educating the consumer about its uses and advantages is high. Marketing of a delivery platform is necessary for a large market like India.

According to Ernst & Young, one of the primary reasons for the derailment of CAS was its ineffective marketing. But addressability should not be mandated as it reduces consumer choice.

According to Ms Michelle Guthrie, CEO, Star Group, it is crucial not only to have a market-driven industry but also a long-term strategic vision. "This long-term vision must be shared among the regulator, operators and broadcasters alike. And it must be behind any ambitious platform be it cable, DTH or broadband,'' she said. A short-term approach could curb the industry's growth.

The growth of the pay TV system is driven by three factors - content, scale and customer service, Ms Guthrie said.

The convention endorsed hopes of broadband as a significant delivery platform. This was evident in the fact that Mr Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd was invited for the valedictory address. Notwithstanding Reliance being 12 to 24 months away from the rollout of its broadband network, Mr Ambani outlined how broadband would benefit all stakeholders in the broadcast scenario.

Mr Marcel Fenez, Asia Pacific Leader, Entertainment & Media Practice, PwC, said that an explosion of digital technology and an increased broadband rollout would be among key drivers of the global entertainment industry.

Globally, the broadband universe will expand from 42 million households in 2002 to 400 million households by 2007. In Asia Pacific, broadband households are expected to increase to 169 million households in 2008 from the current level of 13.5 million households.

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