Thursday, 27 June 2013

No end to Digital Cable Woes

After having failed to pressurize MSOs and LCOs, TRAI is now trying to pressurize the consumers threatening to cut off their cable connections if they don’t submit their consumer application forms (CAF) to their respective cable operators / MSOs. 
25 June was the last date of the warning to 9-10 million subscribers whose forms have not been submitted yet. Now TRAI has extended the last date of CAF submission to 10th July. 

I&B Ministry’s threatening television campaign in which a group of TV serial actresses ask subscribers to fill up these form with their choice of channels and submit to the MSOs or else lose their television connections has also had little effect on the consumers. Earlier, notices were given to MSOs and LCOs by TRAI and in spite of some MSOs having assured TRAI of timely compliance not much could be achieved. 
Eight months have passed after declaration of successful completion of Phase-I by the I&B Ministry and hardly 50% CAF forms have been submitted. According to market sources only a single package with some popular channels has been activated for all consumers irrespective of what choice has been given by them.
I wonder if this is the best way a new technology should be implemented in the country. If facilitating a new technology while the old ones still existed was resorted to, we might have received better results. The problem is that we are dealing with consumers who are already availing these services for the last twenty years. They can well understand the advantages of digital technology but what they don’t understand is why the government is taking so much interest in forcing them to pay more for the same services even if they do not want.
To me the whole business of forcing total digital system on people appears shady where vested interests of a few persons or organizations are being looked after. The persons involved in its implementation are intelligent enough to understand that such strategies do not work anywhere in the world, what to talk of India where consumers are highly price sensitive and more than 70% of population is declared as poor or below poverty line. 
The way digitalization is being implemented in the country today has lead the industry to a chaotic situation where no one appears to be happy, be it broadcasters, MSOs or the LCOs. Only a few stake holders who have managed to increase their monopolies are issuing releases of increased profits. Any way, people in the industry know that these are not the real profits and are the result of forcing subscribers to pay for the low quality STBs and increased subscription without giving them their choice. I am sure this will get leveled once consumers get their choice and MSOs have to pay full service tax entertainment tax and VAT on STBs.
After Effects of Mandated Digitisation
a) Pay TV broadcasters are losing viewership  drastically as packages of MSO choice with only a few popular channels are being  forced on the people, thus making many channels lose their viewership.
b) TAM Media which was strongly being protected by these pay broadcasters earlier when it was criticized by the government, Prasar Bharati or one odd broadcaster who suffered from the inadequate system of rating is being blamed for all the ills now and is being made an escape goat for falling TRPs.
c) When all the consumer choices are entered in SMS system of the MSOs in a truthful manner (This is very unlikely to happen as major MSOs are supported by Pay Broadcasters), many channels will lose their business altogether. Pay channel business in the country thrived only by squeezing revenue from cable operators and not consumers.
d) Even in the next 15 days it is not expected that all consumers will submit their forms as the task is gigantic, involving millions of subscribers. Most of these subscribers are not aware what is in store for them as they do not understand the language of CAF forms nor can they understand TRAI’s package system and a-la-carte choice.
e) If TRAI sticks to its words of switching off these connections, cable operators will lose million of these connections adding further to their woes. This will adversely affect the business of broadcasting impacting the revenue of broadcasters, MSOs as well as LCOs.
f) Because of these uncertain conditions, no foreign investor wants to invest in the industry. Whatever investment is coming, it is from the investment companies owned by foreign broadcasters to increase their monopolies further.
With weakening of the Rupee by 10 to 15 percent in the last one year, all STB imports have become costly. Definitely, this cost will be passed on to the consumers making their life miserable which they will definitely protest. This will impact the implementation of phase 3 and 4 of digitization where price will matter more than the first two phases as the areas comprise mostly of rural and semi-urban India.
To save their skin temporarily, MSOs and LCOs are likely to fill up the forms themselves and submit the report to TRAI. First the government made the MSOs to seed the boxes in every existing subscriber home without their consent, then they forced then to pay increased subscriptions in the name of Law and now forms are being filled up in the shoddiest manner against the choice of the consumers. 
If government had to disconnect the subscribers who do not fill up their choice and submit CAF forms, why couldn’t it start the process this way, by asking subscribers first to accept the conditions of a digital connection and sign the CAF and then gave them the STBs. If not interested, their connection could be cutoff at the first stage rather than force STB on all of them and then force pay channel packages. It would have taken a little more time in the process but could have given better results. In the present scenario TRAI is acting like an agent of Pay TV broadcasters.


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