The CASe of couch potatoes

Updated: Jul 31 2006, 05:30am hrs
Cable television viewing is all set to get a complete makeover at least in some pockets in Delhi, Mumbai and Kolkata when set-top boxes (STBs) start invading the viewers living rooms early next year. This follows the Delhi High Court asking the Centre to implement conditional access system (CAS) in the three metros by December 31. For one, viewers will choose and pay only for those channels they want to see an escape from the arbitrary tariff hikes. And their monthly cable bills will also come down.

This is a breather for the much-harassed viewer, long used to the whims and fancies of the local cable TV operator. At a time when interactivity is fast becoming the order of the day, television continues to remain a medium that is passively viewed when the 60,000-70,000 cable operators spread all over the country, desire to make the programmes available to the viewer. There are around 65 million cable and satellite(C&S) TV homes in India, out of a total 110 million television-owning homes. Indian consumers today are receiving about 100-120 channels without a choice at a fixed price.

Industry analysts say that while cable TV entertainment in the country might probably be one of the cheapest in the world, the continuous tariff hike in monthly cable TV rentals remains an eyesore with the viewers. This has not gone down very well with the middle-income mass market of consumers. Hence, there has always been an equivocal demand and willingness to pay for what you desire.

Enter CAS, a technology platform, which allows the viewers to pay for the content they watch. The idea of viewing pay channels at an affordable pricing led to the introduction of CAS in 2003.

Although it did roll out in some parts of south Delhi at that time, complete chaos prevailed and consumers were not able to watch their favourite TV programmes, not to mention the cricket series between India and Australia. Fearing loss of revenues, the local cable TV operators added to the prevailing confusion. Finally the High Court intervened, calling the entire exercise consumer-unfriendly and put the entire implementation on hold.

Notwithstanding several misconceptions, this time around, CAS implementation appears on track, at least for the time being. Analysts say that in the Indian cable TV scenario, there is an all round need for CAS that makes it possible for consumers to receive and pay only for the content they wish to see. This is beneficial from the point of view of consumers (choice of viewing), cable operators (bundling of services), broadcasters (accurate revenues from actual subscribers), advertisers (more efficient targeting), and the government (revenue tracking).

As a result, it becomes imperative to demystify the entire scenario. As such, a typical conditional access process involves:

The broadcast equipment generates the encrypted programmes that are transmitted to the subscribers

The set-top-box filters out the transmitted signals and checks whether the customer has subscribed to view the channel. The programmes are then decrypted in real-time

At present, cable TV subscribers get both free-to-air and pay channels at a rate fixed by the cable TV operator. In a CAS set up, if subscribers want to view pay channels, STB is a prerequisite. Viewers could either go in for an analog or a digital STB both the versions will be made available by the cable TV operators. The analog STBs cost anywhere between Rs 3,000-3,500. The limitation, however, is that is carries not more than 80-90 channels. Thus, even if the 30-odd free-to-air channels are accommodated, not more than 20-30 pay channels will be left for viewers to watch. Viewers will be left in the lurch as, barring the dozen-odd news channels, all those channels that broadcast Hollywood and Bollywood movies, not to mention the soap operas, will not be accessible to them.

On the other hand, a digital STB is more expensive as it costs Rs 5,500-7,500 with the capacity for a significant upgrade. In fact, in developed markets in the US and UK, high-end digital STBs offer value-added services like access to Internet, viewership tracking for advertisers, options for sending and receiving messages. These services are expected to be costlier and therefore, may not be launched in India in the initial phases of CAS rollout.

Proponents of CAS say that the new system will drive down the monthly cable bills for consumers by half. As per the governments earlier order, all free-to-air channels will be shown under CAS at a monthly rental of Rs 72. For each pay channel viewed, consumers will have to pay additional price over and above Rs 72.

However, in the prevailing scenario, ambiguity remains as the government has been unable to direct the broadcasters to fix a-la-carte prices for their pay channels. This needs to be resolved in the next five months. Moreover, the price of a STB could be an added expense for the consumers. CAS could very well lead to the pay channels like STAR, Zee and Sony turning free-to-air as they would like to reach the maximum viewers in order to continuously command the advertisers premium, says Smita Jha, principal consultant, PricewaterhouseCoopers. Besides, all multi-system operators plan to give out STBs to their subscribers at a nominal rental of Rs 1 per day.

Its also pertinent to throw some light on the DTH phenomenon sweeping the subcontinent. Analysts stress that Cable TV and DTH are two methods of delivery of television content and CAS is integral to both the systems in delivering pay channels. While cable TV is predominantly through copper cable networks, DTH is wireless, reaching directly to the consumer through a small dish and a set-top box. While in a CAS set up, one can still watch free-to-air channels without a set-top box, no DTH signals can be received without the set-top box. Thus, a set-top box is a necessary expense for DTH.

Indias only private DTH operator is Dish TV, a Zee company. It offers 100 channels for Rs 280 a month. The second DTH operator is government-owned DD-Direct Plus. This comes at a one-time cost of Rs 2,000-2,500.

With the Indian DTH market getting competitive in the wake of Tata Sky, a joint venture between Tata Group and STAR India, gearing up for an August-September launch, the consumers can look forward to some eye-catching schemes that might be hard to resist. Be it cable TV or DTH, its market forces that are coming into play.