NEW DELHI: Siti Cable's franchisee cable operators in Delhi have expressed their initial inability to cough up additional subscription money for new channels and have sought more time to gauge consumers' feedback, hinting that another round of face-off with broadcasters may be round the corner.
At a meeting held here yesterday, Zee Telefilms' cable arm conveyed to its franchisees or joint venture partners that, amongst several issues, the one relating to increased outflow of subscription money (approximately Rs 71 per month per household) because of the launch of new channels and some existing ones turning pay needs to be addressed immediately.
As if on cue, the gaggle of cable operators said it would be "very difficult" to convince the consumer to shell out any additional sum, irrespective of the fact whether new channels are being served or not.
They also sought clarification that if, for example, 100 persons avail a particular pay channel, whether the MSO and broadcaster concerned would accept payment for those 100 households only or not.
Since such a system does not exist yet in India, Siti Cable executives, led by senior vice-president (operations) Subhash Grover, clarified as per "indications received" from broadcasters that such "flexibility" is non-existent. Subscription agreements have to be signed with broadcasters on the basis of existing connectivity of the bouquet as a whole, the cable ops were told.
It is a fact that in the year of price freeze, most broadcasters have managed to squeeze small cable ops to increase their subscription revenue and insisting either on minimum guarantee deals or payments based on an enhanced subscription base.
How has Siti Cable calculated the increased outflow to RS 71?
Zoom Channel (Times Group) Rs 7.50 - One channel
MTV and Nickelodeon (One Alliance) - Rs 6 - Two channels
Star One Rs 10 x 2= Rs 20 (based on existing connectivity) - One channel
Hungama TV Rs 6x2 = Rs 12 (based on existing connectivity) - One channel
Break Free Cinema (Zee Turner) Rs 25 - Four channels*
Total Financial Impact on operators - Rs 70.50
*These four channels are the movie channels being put on the cable network by Dish TV from its DTH platform.
What can cause a wee bit worry for the broadcasters is the fact that the Siti Cable franchisees have requested for some more time to "explore the ground situation and intention of subscribers" to avail these (new) channels.
It has also been pointed out that the pricing structure of the new channels has not been properly communicated to the consumer as also the financial impact on the monthly outgo.
Despite several initiatives of the sector regulator the cable ops also stated that there is no clarity about the distribution margin available to the distribution chain and emphasized the issue needs to be sorted out with respective broadcasters by ascertaining the MRP (maximum retail price) of a pay channel.
The issue of service tax and the draft interconnection regulations too were discussed at yesterday's meeting.
