All that CAS
BEATING THE STREET
| This could be the swing issue that lends an unpredictable twist to voting patterns in an election year. |
| In the longer term, whatever the government does to resolve this, will set the tone for an industry, which generates somewhere over Rs 8,000 crores of revenue. |
| Nobody knows quite how much but it could well be a lot more than that Rs 8,000 crore base-estimate. |
| There are between 60 million and 110 million cable-watching households and another 100-150 million terrestial TV-watching families who will probably be part of the cable brigade by 2005. The wide variations in estimates are indicative of the confusion. |
| There are many stakeholders in this game apart from viewers. The channels say that the cable-operators consistently offer huge under-estimates of subscription base. |
| According to the operators, the channels are heartless entities bent on gouging money. The political establishment has always felt a little upset about ignoring the industry's taxable potential and it would like control over content as well. |
| Operating parameters for the advertising industry could change drastically with CAS implementation. |
| If channels are earning substantial subscription revenue, their dependencies change and if viewership patterns are exactly tracked under CAS, channel pricing power also changes. |
| If CAS is implemented, estimates of subscriber base will converge to a sharper degree and the government might be in a position to pick up meaningful revenues. |
| The channels would like CAS to be implemented since it would reduce the influence of the middle-man and help channels earn realistic subscription income. |
| The cable operators see CAS as both a long-term threat and a possible short-term opportunity. While the confusion persists, there is always a chance of windfalls profits through set-top sales and high subscriptions from early bird subscribers. |
| In the long-term, both opportunities will diminish and in addition, the MSOs will lose some of their monopoly power. |
| Technologically speaking, a significant chunk of the market might migrate from set-tops to satellite direct-to-home (DTH). The economics are interesting "" a set top means an outlay of around Rs 3,000 to Rs 4,000 and possibly, Rs 600-odd per month in subscription fee. |
| A dish option now costs Rs 12,000 to Rs 15,000 and it may mean much lower monthly subscriptions for focussed viewers, who avoid paying for a host of channels they don't watch. |
| If there's serious demand for dishes, prices will drop. Right now, the set-top offers terrible viewing quality and, though that will improve quickly, it creates a demand for dishes. |
| The problem is the lack of standardised DTH platforms "" many popular channels aren't ready to move to that mode yet. |
| Consumers are unhappy and the government would hate that dissatisfaction to translate into votes. |
| But it cannot pullback on CAS implementation, without making channels and cable operators unhappy, who have made investments and plans on the assumption that it will happen. |
| That creates pressure on the government to implement CAS in some form. The format will make a critical difference to revenues for listed channels "" and some of them will be looking to offer DTH services as well. |