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Confusion
confounded! That roughly describes the current state of the Indian
television industry today as far as implementation of CAS is concerned.
As it happens at such uncertain times, the air is full of predictions
of all kinds. From the price of the set-top-box to the possibility
of pay channels converting to free-to-air to retain viewership.
We decided to deploy the standard scenario based forecasting model
to arrive at the most likely scenarios.
The Scenario Model for Forecasting
Here is how we used the "Scenario Model" for forecasting.
1. Define forecast subject as "State of the Indian television
industry" Period: end-July 2003
2. Identify the prime influencing factors (listed in table below)
3. For each influencing factor, list all possible values (see table
below)
4. Create multiple scenarios, one for each unique combination of
values (exclude all unlikely scenarios)
5. Use experience & discretion to eliminate further improbable scenarios
6. Shortlist the 2 or 3 most-likely scenarios
(After analysing factors in each scenario and probability of it
happening. Along with inter-connections between various influencing
factors.)
Here is the raw data table for building the possible scenarios:
| Major
Influencing Factor |
Possible
Value# 1 |
Possible
Value# 2 |
Possible
Value# 3 |
| GOVT.
|
| CAS
Implementation Deadline |
•Enforce
July 15, 2003 |
Postpone |
|
| STB
Pricing - Duty |
•Stick
to 52% |
Decrease |
Increase |
| STB
Pricing - Ceiling |
No
Govt. Regulation on price of STB |
Define
Max. Price Ceiling for Economy Model |
|
| AD
Regulation on Pay Channels |
•No
Ads on Pay Channels |
Allow
ads on Pay Channels |
|
| Pay
Channel Subscription |
Enforce
single channel 'rationalized' subscription fee |
Loose
enforcement |
No
enforcement |
| FTA
Basic Tier |
•Allow
Viewer to select 30 FTA channels for BASIC TIER (Rs 72/- + tax) |
Allow
MSO to select 30 FTA channels for basic TIER (Rs 72/- + tax) |
|
| FTA
Tier II |
Define
subscription rate for next FTA TIER (beyond 30 channels) |
No
guidelines for subscription rate for next FTA TIER (beyond 30
channels) |
|
| PAY
CHANNELS |
| Status
Change |
•Convert
to FTA |
No
change |
|
| Subscription
Fees/Bouquet |
Accept
single pay channel subscription fee |
Try
to force bouquet subscription fee |
|
| Relations
with MSOs |
By
pass MSOs |
Work
only through MSOs |
|
| FTA
CHANNELS |
| Consolidate
Viewership |
Increase
Viewership |
No
change |
|
| Status
Change |
Convert
to Pay Channel |
No
change |
|
| MSO |
| Investments
in CAS |
Accelerate
investment |
Go
slow |
|
| Finance
schemes for set-top-boxes |
•Soft loans for set-top-boxes |
No
financing schemes |
|
| VIEWER |
| Invest
in set-top-box |
•Wait & watch |
Commit
to STB |
|
| Relations
with MSOs/Cable Operators |
Form
collectives for local Cable Services |
Rely
on MSOs/Cable Operators |
|
•
Events
considered most significant/probable
Most
Likely Scenarios
From the above data, the following seem to be the most probable
scenarios:
Scenario I
Govt. enforces July 15 deadline for CAS implementation with free-to-air
30 channel bouquet priced at Rs 72 + taxes Govt. does not enforce
ad ban on pay channels Prices of set-top-boxes (including Govt.
duties) vary between Rs 3,000/- to Rs 8,000/- : discouraging most
viewers from purchasing the box, at least initially
Regardless of MSOs' investments
in CAS, most viewers may adopt a 'wait & watch' approach (wait for
the CAS dust to settle before investing in a set-top-box & watch
free-to-air channels meanwhile). Some
mass appeal pay channels may convert to free-to-air with immediate
effect (to hold on to viewers as well as ad revenue). While some
existing free-to-air channels may grab viewer eyeballs / vacant
slots of pay channels.
Scenario
II
July 15 CAS Deadline with NO Ad Ban in Pay Channels Govt. enforces
July 15 deadline for CAS implementation with free-to-air 30 channel
bouquet priced at Rs 72 + taxes Govt. enforces ad ban on
pay channels Prices of set-top-boxes (including Govt. duties) vary
between Rs 3,000/- to Rs 8,000/- : discouraging most viewers from
purchasing the box, at least initially.
Most viewers adopt a 'wait & watch' approach.
Most mass appeal pay channels
will convert to free-to-air with immediate effect (to hold on to
viewers as well as ad revenue)
Scenario
III
Status Quo Govt. extends deadline for CAS implementation (with the
upcoming general elections in mind).
Concluding Remarks
The government is the prime driver behind CAS implementation
in India. And the government's vision encompasses 2 points*.
1. Populism - keep the viewer/voter happy. This universally popular
reason takes special significance because general elections are
around the corner!
2. Increase in Revenues - The 52% import duty on set-top boxes is
expected to add approximately Rs 1 billion ($ 22 mn) to the coffers
over the next few years. And CAS implementation will force operators
to 'reveal' the actual number of cable connections (which some say,
is currently under-declared by 30 - 50%) will bring in additional
cable entertainment taxes of another few million every year.
If you acknowledge that the current coalition Government is weak-willed
(as many coalition governments are). And that the geenral elections
are looming large. And it will be no surprise if the CAS deadline
is extended at the last moment as a populist move.
Unless
our politicians see CAS implementation immediately 'forcing' pay
Channels to convert to free-to-air, resulting in overall reduction
in cable subscription rates for the Indian viewer - an even more
desirable situation from the populist angle!
*
A 3rd most important angle has unfortunately not figured in any
government white paper or vision - this pertains to the future of
digital televison & e-governance via TV. This is already under
implementation in Britain.
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