Monday, April 30, 2012

Cable TV digitisation: Top 10 facts

In December last year, the Lok Sabha passed a Bill to make digitisation of cable television mandatory in India, starting with the top metros on or before June 30, 2012 and pan-India by 2014. Households in the four metros - Delhi, Mumbai, Chennai, and Kolkata - will be the first to benefit from this new rule. Here are the top 10 facts on what this could mean for TV viewers in India;

1. The Cable Television Networks (Regulation) Amendment Bill, 2011 mandates that all cable TV operators will have to transmit TV signals in an encrypted format through a digital addressable system. This will be done through the installation of a set top box in every cable TV home.

2. Consumers will now be able to enjoy better picture and sound quality, enhanced services such as high definition and video on demand content.

3. Viewers will be able to choose and pay for only those channels that they want rather than having to pick from packages with fixed prices. The Bill will prevent Local Cable Operators (LCOs) from bypassing the digital set-top box, and deciding the mix and price of channels according to locality and customer base. The bill will also shift the balance of power away from LCOs to cable service providers and TV broadcasters who will now be able to monitor their subscriber base and control the flow of revenues.

4. Digitisation, experts say, will increase the broadband penetration in India, and will do so at a much lower cost. Analysts suggest a 10 per cent increase in broadband penetration will increase the GDP by 1.5 per cent.

5. Broadcasters will now be relieved from paying huge sums as carriage fee, thereby increasing profitability and enabling them to focus on better content creation.

6. Subscription revenue will increase for the broadcaster and make them less dependent on advertising and drive higher value creation.

7. Niche and specialist channels will now be able to launch and grow since the artificial shortage of bandwidth created by cable operators will no longer hold true.

8. Transparency in the entire system will ensure accurate reporting of subscriber numbers and revenue, thus creating higher value for the exchequer and preventing the fueling of the black economy. Currently, broadcasters claim cable operators and distributors gain disproportionate revenues through under-declaration of subscribers.

9. Higher growth in profitability for the broadcasters and Multiple System Operators (MSOs) will ensure creation of higher value jobs and drive value in the industry.

10. Cable and broadcasting will become a more interesting option for private investment due to the organisation and transparency. Advertisers too will now be able to create targeted campaigns due to higher visibility into the viewership patterns of users.