The Hindu Business Line : Pay channels meet draws a blank — Govt threatens Cable Act changes for smooth CAS rollout

THE over two-hour-long meeting between the broadcasters and the multi-system operators (MSOs) seemed to be straight out of the saas-bahu soaps, with both parties failing to arrive at a consensus on pricing of pay channels. And in exasperation the Government threatened to crack the whip to ensure that the broadcasters fall in line.

The Government, which tried to act as the "facilitator", categorically told the pay broadcasters that it could consider changes in the Cable Television Act to regulate them in order to ensure a smooth rollout of the CAS (conditional access system).

Addressing newspersons, the Mr Pawan Chopra, Secretary, Information and Broadcasting Ministry, said, that the pay broadcasters did not seem serious about the rollout of CAS. "In fact, they were trying to protect their own individual turfs rather than looking at the larger objective of CAS."

The Government had given the broadcasters ample time to finalise individual rates and packages. But now, the Government could consider coercive measures if the pay broadcasters do not fall in line, the Secretary added.

The broadcasters were today expected to announce individual prices of pay channels as well as prices for various bundles and discuss the issue of distribution margins with the service providers - MSOs and last-mile operators (LMOs). However, only a `discussion paper' (as Star India's Chief Executive Officer, Mr Peter Mukherjea, called it) was circulated.

According to the paper, a copy of which is available with Business Line, the wholesale prices of various bundles of channels works out to about Rs 175. "If one added the distribution margin, the basic tier fee, set-top box rental and taxes, the consumer would end up paying over Rs 500 per month," said Ms Roop Sharma, President, Cable Operators Federation of India (Cofi).

This made the split between the so-called `swadeshi' broadcaster Zee Telefilms and the `foreign' ones - Star, Sony and ESPN evident. Mr Jawahar Goel, Vice-Chairman, Zee Telefilms, was quick to distance himself from the rates and said, "We were not consulted. We will announce our rates in the next 48 hours."

The Government is not happy with the pricing structure put out by the broadcasters. "We had suggested to the broadcasters that they should, in order to ensure the rollout of CAS start with low prices," said Mr Chopra. It was also "disappointed" that there was no sufficient dialogue between the stakeholders.

"The Government can step in where there is need for help in policy matters, these are private players and they must negotiate amongst themselves," said Mr Chopra.

Also, there was no consensus on the distribution margin payable to the service provider. The service providers today demanded a 40-60 per cent margin while Star India's Chief Operating Officer (COO) Mr Sameer Nair, said that 15 per cent could be paid as margins.

Meanwhile, the cable industry said that the Government's intention of keeping the monthly cable bill at below Rs 200 was a reasonable one and the broadcasters should price their channels in such a way that there is large penetration of STBs.

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