Some of the popular cable television channels that make for the staple diet of evening entertainment in nearly 30 lakh city households have gone off the air in nearly half the homes as the biggest operator in Kolkata pulled them out of its packages on Sunday.
SitiCable Kolkata director Suresh Sethia said, "We had informed our viewers over the past 10 days that the composition and price of packages will change. On Sunday, we removed all Star channels from packages and tweaked the prices."
Star India offers 52 news and entertainment channels and 12 sports channels and is the biggest private broadcaster in India.
The blackout follows differences between Star India and multi-service operator (MSO) SitiCable over financial terms of the distribution contract that has come up for renewal.
According to sources, Star India had demanded a 100 percent hike in the rate calculated on the basis of set top boxes (STB) seeded by SitiCable in the market. But the latter refused to accept the subscriber base as the yardstick, countering that most of the channels rides on the popularity of a handful channels while Star India bills MSOs for all the channels.
"Star India wants to negotiate the new contract on the basis of STBs. Actually it wants maximize advertisement sales revenue by including its channels in packages. If we accept the terms, the subscription rate at the consumer's end will double. This is unacceptable. Instead, let those who want to see a Star channel subscribe to it separately. That will be a fair determinant of how popular its channels are," Sethia said.
SitiCable officials were also aware that relenting to Star India's demands would set the benchmark for fresh negotiations by the other major channel aggregators — Zee, Sony and Colors. This could outprice the cable television industry and lead to large-scale migration to direct-to-home (DTH) platforms like TataSky, DishTV and Airtel.
Sources at the broadcaster's end countered that unlike the DTH industry that has been transparent, cable operators try to undercut while the broadcaster seeks to maximize, triggering repeated conflicts.
According to industry observers, Star India has no option but to push for higher revision to realize the huge sums of money it has paid to acquire sports rights. This includes the Rs16,347.50-crore deal with BCCI for the next five years. In addition, the I&B ministry has imposed a fee of Rs1 lakh per day per channel for temporary uplinking by non-news channels.
However, the model of packages that currently drive the cable TV industry could change if Madras High Court rules in favour of a la carte distribution of channels in a case between Star India and TRAI. The verdict is expected on January 4. – TOI