Cable television viewing is fast becoming an expensive proposition with more and more broadcasters going pay. In the last count, at least 50 channels were pay-based. Also, cable subscription charges have gone up by 7 per cent last year and are expected to rise further.
According to Ashok Mansukhani, director-corporate services of Hinduja TMT, a technology and media company, "Two years ago there were only 36 pay channels. This figure has increased to at least 50."
Interestingly, at least eight channels have converted themselves from free-to-air (FTA) to pay in two years. Channels such as MTV, Udaya TV, NDTV 24X7 and SAB which were initially rolled out as FTAs, later became pay during the last two years. The list of the pay channels also include Zoom, Hungama TV, Animax India, Discovery-Travel and Living, StarOne, Pogo and ESPN.
Ajay Vidyasagar, senior vice-president, marketing and communication-Star Networks, said: "The fundamentals of a pay channel is that it helps a channel recover a part of its manufacturing costs."
Like a customer pays for any service or product that he uses, a channel is also a service for which he has to pay, Vidyasagar added.
Mansukhani said the Telecom Regulatory Authority of India (Trai) had issued an order on October 1, 2004 preventing broadcasters from further hiking subscription rates for existing channels.
He stated the broadcasters had interpreted the order to allow for free pricing of new pay channels launched after December 26, 2003.
According to Mansukhani, the new pay channels, have been mostly bundled under new bouquets wherein one network bundles several under its fold, with a competitive pricing having resulted in a sizeable price increase by broadcasters.
The four bouquets, Star India, SET-Discovery, One Alliance and Zee-Turner, have ensured a lumpsum amount per month to broadcasters, but has left users in the lurch.
K Jayaraman, chief executive officer and managing director of Hathway Cable & Datacom, a multi-systems operator, said: "We are maintaining a tough balance act between broadcasters with newer pay channels and subscribers who are reluctant to pay more. But if the pay channels increase at this rate, we will have to hike the rates."
According to a recent report by management consultancy firm KPMG, the television sector is expected to grow to Rs 37,100 crore (Rs 371 billion) by 2010, with subscription revenues alone comprising over Rs 25,000 crore (Rs 250 billion).
Rajesh Jain, national industry director-ICE at KPMG, said: "At around Rs 150, India has the lowest average revenue per user (ARPU) in the world. Pay channels is what will help broadcasters to create further growth opportunities."
Mansukhani expects new pay channels to face increasing problems, such as difficulty in getting full subscription amounts and customers' non-acceptance of high prices till the choice for pay channels is not implemented.
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