Solution eludes CAS meet

The mother of all meetings called today to discuss the price of pay channels ended abruptly after Secretary, I&B Ministry, Pawan Chopra said...

The mother of all meetings called today to discuss the price of pay channels ended abruptly after Secretary, I&B Ministry, Pawan Chopra said it had lost sight of core issues. Later, he hinted at retribution if errant stake holders did not help in the smooth rollover of CAS. At the core was the price that the Government had indicated for pay channels — Rs 200 for all channels, including the Rs 30 per month rental for set-top boxes and Rs 94 for the free-to-air channels. But a proposal floated by Star junked promptly by rival Zee who felt their views had not been considered — was rejected as being over-priced and far too expensive.

Star’s proposal, which included ‘‘compulsory’’ sops like Super Saver (must-buy movie channels and sports channels) priced at Rs 43, moving on to a family pack comprising Star Plus, SET, National Geographic, Discovery at Rs 51, then to premium tier comprising Star Movies, HBO, Zee MGM, Zee English, CNBC at Rs 56, found few takers today.

What Govt can do if broadcasters don’t comply

• The law states that channels have to be either free-to-air or pay. After July 14, those who do not declare their prices will not be seen

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• If that sounds harsh, take a look at this. The Government, through a notification or suitable amendments to the Cable Act, can regulate advertising on pay channels. Canada has strictly enforced this. ‘‘We can set limits on advertising on the pay channels,’’ officials said, adding given that 70 per cent of revenue comes from advertising, we can control it

• We can set a cap on the price of channels if they want to rake in both advertising and subscription revenues.

Star COO Sameer Nair said as broadcasters, they had indicated their list which had the nod of Sony, ESPN and possibly Zee! Star had also spelt out the price of the channels individually as per Centre’s wishes. So while a consumer could choose Star Plus for Rs 24, he could opt for Zee TV at Rs 16, SET at Rs 18 individually, movie channels Star Movies at Rs 10 and HBO at Rs 20 and Zee MGM at Rs 12 and so on so forth.

Multi-service operators, including Hathway and Siti Cable, found the prices unrealistic. But their grievance was over the unresolved issue of settling the distribution margin for MSOs and last mile operators for carrying pay channels on their network. While MSOs stuck to their margins of 40 and 60 pc, broadcasters Star and Sony are willing to shell out 15 pc — the normal practice is for the owner of the product to fix the maximum retail price at which the consumer buys — the prices indicated by Star were prices net to broadcasters excluding the MSO margins and local taxes in the metros.

But Ministry officials did not want to get bogged down by what they called details personal to the cable business. ‘‘They were bothered about protecting their own turfs rather than ensuring a smooth rollover of CAS,’’ said Chopra. ‘‘The office of the ministry was being misused to discuss detailed trade-related issues of cable business at the risk of addressing core issues of pricing of channels that would have affected the availability of set-top boxes necessary for viewing pay channels,’’ he added.

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Today’s meeting was called by the I&B Ministry to discuss the price of channels among broadcasters and multi-service operators after the deadline of June 15 was extended as per the broadcasters’ wishes. So, on July 15, when CAS sets to roll in the four metros, what will the Government offer? ‘‘You will get 72 channels and your screen won’t be blank. As for pay channels, I cannot guarantee that,’’ said Chopra.