Star India has completed signing 90-95 per cent of the agreements for its reference interconnect offer (RIO) with multi-system operators (MSOs).
According to a spokesperson from Star India, the broadcaster has agreements with almost all MSO operators who have either signed the amended RIO or the old one. “And there are a few operators, who, after the TDSAT judgement, had been given the option of retaining their old CPS (cost per subscriber),” he said.
The spokesperson also said that the amended RIO agreement has been struck between national MSOs such as Hathway Cable & Datacom, DEN Network, Siti Cable Network, GTPL and IndusInd Media and Cable (InCable). “Most of them have taken 19-21 channels. While this of course differs as per markets, essentially what they are looking at carrying is around seven channels in the base cart. They are carrying a couple of (other Star) channels in the base plus one pack. The leading English channels are in base plus two pack and they are looking at creating a fourth pack with all Star India channels,” said the spokesperson. Typically for most, this includes channels such as Star Plus, Life OK, Star Gold, Movies OK, Channel V, NGC and one regional channel. However, these are not so for all the MSOs, there are some such as InCable, which is carrying only three to four Star channels in the base pack, he added.
The MSOs will offer the base pack to consumers, however if they want Star channels that are not included the base pack, they have the choice to take those packages or channels over and above this, said the spokesperson. However, when asked whether customers have the choice to drop certain channels from the base pack or opt for another pack or channels instead, he said, “No it is a base pack, it is exactly how it operates currently in cable or in DTH. If they want some channels that are not in the pack they have chosen, they have to choose it on a la carte. They are choosing a pack that suits them and if they want some additional channels, they can of course take it on a la carte. The design of their (MSO) offers are completely in their domain.”
This means that consumers will be forced to pay for the base pack even thought they might not want it, but have the option of adding another pack in which their desired channels are included. For instance, the Star India basic pack, taking into consideration the MSOs offering the 7 channels mentioned above, would come up to Rs 45.67 (including the regional Marathi channel Star Pravah). This could be discounted by the MSO on basis of the incentives offered by Star India’s amended RIO. However, it has yet to be seen at what price will the base pack be offered to consumers.
When asked how many MSOs have chosen to opt for the old RIO, the spokesperson said that none of the national MSOs were among them but there were some independent MSOs, not more than “five or six.”
There were some media reports recently that also said that leading MSOs such as Hathway, DEN, Siti Cable and InCable had signed the amended RIO agreement with Star India.
When asked about the incremental costs of Rs 30-40 on the packages that some MSOs in media reports have mentioned, he said that pricing is completely the MSOs prerogative. “Everybody is approaching it separately. We get paid on the basis of the incentives that they have been offered. It is a subscription model, they are collecting money from the consumers and will have whatever revenue share they have with their LCOs and they will pay us after that. The payment is from a subscription point,” said the spokesperson.
When asked as to how customers will take this increase in their cable bills, he said there are 40 million DTH consumers who take channels in individual packages, so he doesn’t think customers will react negatively. “I think fundamentally this was just a transition issue for cable. I think the intention always was to move into this path. It is just the push that they required in terms of packaging,” he said.
With regards to the TV broadcast industry, he said there is a very positive movement on moving towards packaging. “I think the RIO was the need of the hour for the industry and it encourages consumer choice it creates relevant customer segments and helps improve entire economics of the business. I think we are seeing a significant movement on the ground with regards to packaging,” he added.