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India's Leading Source for Broadcasting & Broadband Information - CableQuest Magazine
HomeArticlesCol KK SharmaDIGITALISATION The Game Changer
Tuesday, 01 January 2013 13:25


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We have entered the second phase of digitalization that includes 38 cities of million plus population. Everyone knows how the government has succeeded in introducing compulsory digitalization in the country, using its powers and clout in every which way. The whole process has worked in favour of the big players and the top 10% of the population.

Although it is well known that in many developed countries digitalization of Terrestrial TV was mandated and implemented as a national agenda for the benefit of the masses and also to save on spectrum that has become very precious resource as wireless is heavily in use in mobile communications, India has made an exception to digitalise cable networks run by private companies, forcing it down the throat of the masses even if they could not afford it.

Digitalisation The Game ChangerWell, that is the way government in India works. Here masses mean the rich and the powerful and not the economically weaker majority of the society. These people who comprise 90% of population are useful only once, before the elections which are held every five years. Government knows how to lure these people before the elections because this part of India has learnt to compromise with everything in life.

There are numerous examples with us now. Price hikes in Diesel and Patrol, Electricity, Water, property, rail fares etc are just a few. Now we can add cable TV rates too in this category.

But this may not affect the government in the next elections in 2014 because it has many schemes up its sleeves like the recent direct cash deposits to keep the poor masses of the country dreaming and hoping for the better times and keep surviving on whatever little they have today. So, digitalization will also be taken with a pinch of salt and if the poor cant afford it, it is just their bad luck. The government show must go on. Without digressing from the subject of digitalization, let me start analyzing some of the current happenings post first phase.


Success of First Phase

I don’t see any big change now except that nothing is happening in Chennai because ARASU, MSO run by the state government still does not have its DAS license given by the I&B Ministry.

In Kolkata, Mamta Banerjee, State Chief Minister is resisting switching off of analogue till all subscribers get their STBs. Although, many MSOs have not received their consignment of STBs from China and Taiwan which are the international manufacturing hubs, I&B Ministry has forced the MSOs in Kolkata and Chennai to switch off all analogue signals.

In Kolkata only 25 analogue channels, mostly Bengali channels are running in analogue to avoid any law and order situation from the complete blackout. 

In Chennai the matter is turning political where Jayalalitha, running the state government wants UPA government to decide soon on the ARASU DAS license and DMK’s Karunanidhi is supporting the UPA government in not issuing it. It is very strange that this issue has come after ARASU has connected the whole state in the last two years and already contracted for laying of 200 Km of fiber for its digital network in Chennai. It is believed that ARASU has also ordered for the STBs and collected advance money from the Cable operators. 

Surprisingly, TRAI’s recommendations on the issue of government entities entering into broadcasting and distribution business were sent to I&B Ministry in 2008. If the matter was so important, why a decision was not taken before DAS was implemented. ARASU’s license is also pending since June 2012. It is the LCOs who will suffer the most as many of them did not have good relations 

In Mumbai and Delhi, market is dominated by the big players like Hathway, DEN, Siticable and Incable. From what we know that the government was in touch with them since long, much before the Digitalisation Ordinance was brought in and they had prepared themselves well. In particular Star Group and Zee Group had the maximum benefit in the first phase as they had their own distribution platforms as MSOs and DTH companies.

So, all these big companies benefitted from the failure of small independent MSOs who could not get their licence from the ministry, install headends, procure STBs, install CAS and SMS within the short time given to them. The biggest hurdle they faced was that Ministry would give them the license only after they had negotiated with the broadcasters for pay channels. Maximum pay channels are under the control of Star and Zee groups who also own their distribution MSOs as well as distribute pay channels through a single content aggregator.

It was obvious that more the aggregator delayed negotiating deals more their own MSOs gained poaching on the Independent MSO subscribers.

Sometimes I wonder if this was also a strategy planned with the Ministry officials who never showed iota of understanding with smaller players and forced cable operators to place STBs in consumer households using all means including Police, local administration and misleading reports in the Media scaring subscribers.


Digitalisation of Cable TV in India

Digitalisation The Game Changer Rajeev Kaushik"Today the TV channels are losing huge money in India, since they don't have any data against the many households that are watching their programs. This is due to the lack of any type of system in place to monitor the number of subscribers.

Since it is the TV channel that is losing money, it should take initiative to push the cable networks to digitalise their networks by offering them a revenue sharing model, which is the same as the business model for Direct-To-Home (DTH).

"The TV channels can partner with cable networks to subsidise the Set-Top-Boxes (STB) with a view to encourage subscribers to buy a box and opt for digitalised service, allowing for better quality and better management of their services/subscriptions. I truly believe that digitalisation will not only help the cable networks but the TV channels as well by enhancing their revenue. Their advertising revenue will also increase as they'll be able to know the exact number of households for each channel."

(SatLink Communications is a leading teleport and HD Playout Center providing global content delivery over satelities, fiber and IP such as major Occasional Use sports and news events to and out of Asia, and DVB-S2 MCPC Platform on the premium AsiaSat 5 satellite)


Addressability and Transparency

Although digitalization is the best thing to happen for the industry because transparency that will come as an outcome will level out many things, I wonder if the big companies will ever let the real transparency come in the industry the way things are going on at present.

So far no MSO in the four Metros is ready with the billing through SMS systems. Consumer data (KYC Forms)  has not yet been fed into the computers and all billing is being done in the same manner as in analogue system. Consumer does not know what is he paying for and how much.

I believe at least for the next  six months this situation will remain. Once the subscribers really get their inflated bills including additional pay channel cost and taxes, many of them many opt out of the cable service and return their STBs. It is very similar to what happens in DTH where after the initial subsidized rates, consumers stop using the service.


India is not a Pay TV Market.

Digitalisation The Game ChangerThere is no pay channel market in India because consumers do not pay for the content. These so called Pay channels were introduced in India in an illegal way in the non-addressable networks by forcing cable operators to pay to receive them, after they became popular as FTA channels. 

Unfortunately, contrary to international trends, our government in order to please these pay channels, has introduced the DAS regulations so as to benefit pay channels the most.

In developed countries only basic tier price is regulated and pay channels are left to market forces but TRAI has fixed a minimum of Rs 150/- for a consumer even if he wishes to have a single pay channel.


A-la-Carte seems a distance dream.

Although a-la-carte has been made a must by the regulator, one has to really see how the MSOs sell the pay channels in a-la-carte mode to consumers. Phase-I is dominated by the big players who are part of the vertically integrated broadcaster companies. Phase-II cities have also been selected in a way that these big MSOs get the maximum benefit.

So a consumer cannot expect a fair deal because these MSOs have put their own pay channels which they wish to push in the market in their cheapest package presuming that the consumer will select the cheapest package considering its affordability and not his choice. In fact a-la-carte rates of rival channels have been made high to discourage their sale.

This is the way the market will be exploited and am sure the government will only be a moot spectator unable to do anything to these big players in the same manner that it keeps insisting on self regulation for broadcasters instead of making strict laws against their content code violations.


TRPs will see great ups and downs.

Digitalisation The Game Changer2In the present scenario of total digitalization where only a few large companies having vertically integrated MSOs, content aggregators and Pay channels will dominate the TRP ratings. In any case at present customer choice has no meaning when the information has neither been collected nor fed into the Billing Systems of the MSOs.

I also wonder how TAM has started giving out changes in the TROs post DAS. The readings are very obvious. For example, if DEN and Hathway have dominating position in Delhi and Mumbai, all Star Group channels will benefit. Siti Cable dominates the Kolkata market, so all Zee Group channels will benefit there. Zee Bangla is No 1 post DAS. Even the Million+ cities of the second phase will see this type of division. In this scene, many channels will experience a washout. English channels have already seen this happen.

DTH Joyride to end Soon DTH has had its days. Now people will have their local cable operator giving the same content and will prefer Cable than DTH. Only 5-10% of consumers are a game for the high-tech channels of DTH. Even PVR and DVRs and interactivity will now be available on cable. It was quite obvious the way DTH operators tried to lure the market in the beginning of DAS implementation. But now they will have a tough time doing that. Already drastic changes have been seen in the market as depicted in this chart.

Well finally, the Digital world is here in India, at least in the urban areas. From what I have seen over the last one year achieving the targets in the second phase may not be that easy. But Ministry knows how to manipulate the figures and show a fantastic winning situation at the end on 31 March. Elections will be held in 2014 and government must do whatever it can to showcase its great achievements. Digitalisation will be one of them. Once the election results are out phase III and VI may never happen but that does not matter because the payment potential there is not very attractive to Big players. Even the government will stop pushing any further. Only the Time will tell what is in store after 2014.

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