The Hindu Business Line : `Going digital will benefit cable industry, consumers'

``If it does so, the result would be the emergence of FDI and fresh capital infusion in cable TV industry and therefore, the emergence of a multiple and competitive delivery platform scenario,'' said Mr K. Jayaraman, Managing Director & CEO, Hathway Cable and Datacom Pvt Ltd.

With so many channels entering the fray how does the cable industry propose to address distribution?

The cable TV industry especially the Multi System Operators (MSOs) are the only ones who deliver all the channels through their cable TV network, especially in the main metros and towns. Even the MSOs's carrying capacity has reached the maximum possible levels.

As far as the mofussils go, the situation is even grimmer as the capacities are mostly at around 550 MHz, giving about 60 channels or so. There is also a severe customer resistance to hike in subscription consequent to introduction of new pay channels since the previous tariff order. The MSOs are not even able to recoup the pay content costs and hence the question of adding further capacity is not possible due to severe cash losses and lack of capital.

The only way out seems to be to go digital and addressable only for new pay channels. This would not compel all customers to procure a device, as current popular channels are available on a non-addressable mode and hence leads to no deprivation or burden to the common man. The current business model of the pay-broadcasters does not get impaired.

There is a way out for the regulators and Government as the common man does not have to buy a device nor does he have to pay for new pay channels that he does not want. It also paves way for capacity de-bottlenecking as new pay-channels would be on digital mode and capacity is freed.

This would also bring in a gradual order to the cable industry and would dovetail with introduction of DTH and other delivery platforms.

What kind of investment is required for addressing this issue? What is the breakeven time for these investments?

The major MSOs such as Siti Cable, SCV, Incable, Hathway, RPG Netcom and other independent majors have already invested on the addressable platforms including necessary infrastructure, middleware and SMS. The additional investments can be scaled up depending upon a road map to be drawn up by the regulator for a pan-India roll out.

How do you think distribution will play out in the future for the Indian television industry considering that this is a very important issue?

Distribution is an important element in any business and hence cable TV is no different. World over, distribution has been accorded enough importance. US distribution majors such as Comcast and Liberty Media have their content and broadcasting companies. Only in India, due to lack of regulations, there is complete disorder, chaos and complete mutual mistrust among the stakeholders.

Will this result in a shakeout in the cable industry?

The emergence of alternative delivery platforms such as DTH and Telcos under unified regime will present an interesting landscape. But cable TV industry would also have to buck up and meet the challenges. If they do so, it could also see the emergence of FDIs and fresh capital infusion in the cable TV industry and therefore the emergence of a multiple and competitive delivery platform scenario.

However the cable TV industry, especially the MSOs are having trying time today.

How do you see broadband and DTH impacting cable industry?

An average Indian customer including the middle class types are extremely price conscious. According to some authoritative sources, the current cable subscriptions in India rank amongst the lowest in the world, even lower than Bangladesh, and the Indian customers today are getting more than enough as a value for money, when we consider the availability of a diverse genre of channels including several regional channels too.

However, all of them may be reluctant, to pay any further for new pay channels. Hence, the latter can be introduced on a choice basis or under an addressable basis, where only the haves will pay for the device and the content whereas the have-nots continue to see or not see but yet pay the prevailing subscription without any new device. Thus cable TV presents a far better economic proposition to the people at large.

For a DTH or broadband customer, even for them to watch a basic package they need to buy a digital device, which is expensive for a common man, unlike in a cable TV case where none is required.

Also the PC penetration in India is low, for any significant penetration of broadband. There can be only one of a kind in the world such as BSkyB in the UK which gives a DTH box free to a customer.

Thus DTH and broadband presents a good opportunity for cable TV industry for the latter to get their act together and face the challenges to be posed by alternative delivery platforms. But cable TV can still be the most practical and cost-effective option to a large majority of people in India.

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