MUMBAI: While other broadcasters are humming and hawing about the pricing mechanism for their pay bouquets in a post-CAS scenario, Subhash Chandra's Zee Telefilms has decided to take the plunge. Zee today became the first to announce its pay bouquet price at Rs 55, which will be its maximum retail price in the post-CAS environment.
The channels would be available on a la carte basis also, a company release says, without providing any details.
What this announcement appears to also indicate is that Zee is telling the market that all its channels will be offered in the pay mode. That may well rule out any Zee channel being pushed into the basic free-to-air (FTA) tier post-CAS.
The Network has also announced that out of the total revenues generated from the consumer price, upto 50 per cent will be shared with the MSOs and cable operators.
Siticable Network Limited, a wholly owned subsidiary of Zee has already become the first company to obtain permission from the information & broadcasting ministry to launch its digital HITS for distributing pay TV signals under the CAS environment.
HITS consists of the downlinking of all pay channels, their re-encryption in a common CAS standard and uplinking of this beam. This would enable the MSO or the cable operator to receive all pay channels from a single dish resulting in low capital expenditure at his end. Further, the consumer would need a single set top box for receiving all the pay channels rather than multiple boxes if each broadcaster delivers to home in individual encryption standard.
Siticable plans to offer its services from May 2003 and has signed an agreement with Indian Space Research Organisation (ISRO) for providing the satellite segment services. Implementation of HITS will ensure timely roll out of CAS in the four metros and provide the platform to roll out CAS on a nationwide basis, the release says.
Zee group CMD Subhash Chandra was quoted as saying: "This is going to redefine (the) cable TV distribution business in the country. Everyone in the value chain - broadcasters, MSOs, cable operators and viewers - will benefit from our HITS model."
"The Zee Turner bouquet will be priced at Rs 55, which is going to be the maximum retail price. 50 per cent of this consumer price would be retained by the distribution chain, which will include MSOs and cable operators. The cable operators may also pass on some percentage out of Rs 55 to the viewers, if they want.
"At Zee, we remain positive about our ability to convert the emerging opportunities into operating profits, especially with CAS now becoming a reality. The company is pursuing with determination its target of driving growth and shareholder value by capitalising on this opportunity."
Zee believes that implementation of CAS, for which the I&B ministry has set a 14 July deadline, will result in a dramatic shift in the way revenues are distributed between various players in the television broadcasting value chain. Broadcasters would be able to capture 40 per cent of the total consumer spend on television (the company estimates it approximately Rs 80 billion), as against the present 8-10 per cent. MSOs would get distribution margin from broadcasters ranging between 20-25 per cent, while cable operators would get a FTA fees and delivery margins from pay channels ranging between 25-30 per cent.
"We are happy that CAS will bring transparency into the television distribution system, and viewers would be able to pick and choose channels they want. Viewers would also be able to enjoy world class value added services like pay-per-view and video-on-demand besides Internet services through the digital set top boxes," Chandra said. "As a company Zee Telefilms Limited will capture additional revenues at Siticable level as it operates HITS as an MSO, which other broadcasters may not be able to capture," Chandra concludes.
