Channel Surfeit

Imagine watching the lover's tiff between Ross and Rachel in Friends only to find the screen going blank just as they are about to part ways. Or trying to catch the remake of Hitchcock's Rear Window on Hallmark to discover your cable operator doesn't know the channel exists.
Want to be a couch potato really in control of what you're watching? Fed up of being at the mercy of your cable operator? For those willing to pay extra, the answer is finally here—in the guise of direct-to-home (dth) television. It's a mode of delivery of satellite channels that circumvents cable operators to directly deliver channels to the viewer. The third frontier of broadcasting—after terrestrial and satellite transmission—dth is familiar technology in Europe, the US and Southeast Asian countries like Singapore, Malaysia and Taiwan.
Its biggest advantage is that dth allows access to a plethora of premium, niche channels, the ones a viewer would want to watch. "It gives people so much choice you can watch a programme of your choice any time of the day. Programmers programme channels for the largest common factor, they don't worry about niche audiences. With dth you cater to individual needs."
These were the brave words of former Star TV head honcho Rathikant Basu three years back when he was desperately trying to push the technology. Political opposition stymied his effort. The UF government imposed a ban on it in 1997. Thankfully dth-friendly Pramod Mahajan decided to delink it from the Broadcast Bill in 1998. And it took two years from then for the Group of Ministers under home minister L.K. Advani to give dth a go-ahead. Last week the Cabinet too gave it a nod.
"It's logical progression of technology," says media analyst Sudheesh Pachauri. No longer does the argument that dth can be a security risk—since the government can't exercise control through an intermediary like the cable operator—hold water. "The security bogey has been overplayed. The Internet and cellphones are already there as risk factors," says Kiran Karnik, managing director of Discovery India.
Nonetheless, there are question marks to the success of dth in India—whether it'll become a reality or remain hogwash. Already futuristic technologies like the broadband—which allow channels to be telecast on the worldwide web—have taken the sheen out of dth.

However, the main worry—whether dth will put the cablewallah out of business—is premature. The decade-old Indian cable industry already boasts a connectivity of 24 million which is expected to reach over 46 million viewers by 2000-end, according to a ficci-Arthur Andersen survey of the Indian entertainment industry. Assurance enough that the cable industry will not be marginalised—it'll remain the cheapest option for multi-channel viewing. dth is estimated to attain not more than 3-5 per cent marketshare in India. While optimists like Karnik peg potential subscribers at 3 million in two years, the Andersen survey projections are 1 million by 2002 and 5 million by 2006 or as former i&b minister Arun Jaitley put it, "10 million in 10 years".
Why is this so? The answer is: huge costs. dth requires viewers to invest about Rs 25,000 in equipment (satellite dish, decoder and smart card). Then there's the high monthly subscription fee of about Rs 500. Initially the operators might subsidise the cost of equipment to some Rs 15,000. They may also offer the basic package at Rs 200 per month plus Rs 50-100 for every extra premium channel.But with Indian viewers used to getting channels for a bitty Rs 150 a month, will they pay extra for a few more exotic add-ons? "dth will make very little difference. The price differential is too huge," avers industry analyst Joydeep Gupta.
Besides, the cable industry has also upgraded, consolidated and professionalised itself in the last three years with operators offering about 70 channels. Value-added services like Internet and telephony will only fuel things further. Big players like Siticable, InCablenet, Asianet, Hathway Cable and Datacom have entered the field. Hathway, for instance, plans to launch internet services via cable and has proposed to invest Rs 500 crore over three years in cable-related ventures.
The government regulations will make the task of dth operators even more difficult. "It's not just another trade, you need to take extra caution and care," argues i&b minister Sushma Swaraj. The foreign equity cap has been kept at 49 per cent in which fdi can't exceed 20 per cent. Given the huge costs involved, technology tie-ups and foreign equity, feels the industry, would've helped. To prevent monopoly, the cross media restrictions specify not more than 20 per cent equity of broadcasting or cable network companies in dth platforms.
The licenses to be issued for 10 years require a Rs 10 crore entry fee besides the 10 per cent of revenues as annual fee. The licensee would also have to execute a bank guarantee of Rs 40 crore. What's worse, he'll need to establish the uplink earth station in India within a year from the date of issue of licence when a more viable option would have been to allow leasing earth stations.
With hurdles galore, why would one want to go dth? For the assured returns. For broadcasters, it'll bring in more revenues. "It opens up one more delivery option, creates new markets," says Karnik. The Andersen survey currently pegs TV accounts at 36 per cent (Rs 2,160 crore) of the Rs 6,000-crore Indian ad business. It's estimated to rise to Rs 8,000 crore by 2005, constituting almost 50 per cent of advertising in the country. But with channels being launched ceaselessly and viewership getting fragmented, what better way to earn more moolah than to get your revenues directly from the viewer?

However, experts believe the dth market will be lucrative for only two players and those who board the ship will enjoy the first mover advantage. Star, Zee, Ispat, Reliance, Modi Entertainment, Hindujas, the Sterling group, DD—besides foreign players like Measat and Loral—had reportedly been in the fray in the past. But most remain tight-lipped about their plans. Star, for instance, was seeking a foothold three years back using dth as the last of its depleting armoury. The picture is brighter now with its kbc-led programming fetching it viewers in droves. So is dth still a compulsion?

For one, the speed with which dth has been pushed through is raising suspicion. "It's a mystery why they're in such a hurry. The Prasar Bharati is languishing, there are other important communications-related issues," says N. Bhaskar Rao, chairman, Centre for Media Studies. Nor is the legislation on broadcasting in place. "Regulation has just become a post-dated cheque," says Akhila Sivadas of the Centre for Advocacy and Research. The Communications Commission of India and the Convergence Bill are still some distance away. "Besides, the receiving-end technology also needs to be put in place," says Rao.
Clearly, it's a long road to dth and there's time still before the remote lands in the viewer's hand.