IndianMascot
Core Member
As the year comes to an end, the multi system operators (MSOs) have finally come out with their packages and the pricing module for the Star India channels, after the broadcaster decided to give its channels only on Reference Interconnect Offer (RIO) basis.
But according to Media Partners Asia (MPA) while Star has the right intent, it has to remain flexible on the incentives offered for better ground adoption. From the operator’s viewpoint, the Star scheme needs to address the following issues:
1. Despite availing of the maximum discount on the scheme, the content cost for operators remains higher than previous CPS deals, exacerbated as operators are not receiving any carriage fees.
2. The scheme does not factor in volume discounts on the basis of an absolute number of subscribers offered through a given operator network.
3. Channel pricing is based on filed RIO rates. These are not reflective of consumer preferences. For instance, Star Plus which enjoys 2x the viewership of Life OK, has a lower price than Life OK.
4. To generate higher discounts, the scheme demands carrying maximum channels with 90 per cent penetration. This will result in a rich basic pack offering which will disincentivise future upselling to an operator’s high value packages.
5. Even if operators are able to pass through content costs to subscribers, MSOs face the risk of paying more and collecting less as the current backend systems for operators are not robust and transparent enough to collect and pass on revenues for channels on an a-la carte basis.
6. The scheme does not factor in HD channels. MSO action plan and execution risk Star has been transparent on rates and discounts for its channels. Some national MSOs have accordingly started to work on their blueprint of tiering channels through a broad revenue share arrangement with local cable operators (LCOs). On the backend, according to MPA, the operators now critically need to have their technology systems in sync with consumer preferences, collected through KYC (Know Your Customer) forms. They will also need to decentralise control by extending their consumer databases to respective LCOs to enable the upgrading and downgrading of packages as per consumer choice. As backend systems get re-engineered, MSOs will need to concurrently conduct roadshows and training programmes for LCOs. MSOs will also need to undertake marketing campaigns to create awareness on a consumer’s need to make choices on revised cable packages.
Indian Television Dot Com | DTH could push HD penetration in next one year: MPA
