With conditional television access system less than two months away, broadcasters are working overtime on their pricing strategies. The bouquets will carry low price tags, while individual channels will be expensive.
"Not all bouquets have strong channels, and the pricing has to ensure that the weaker channels are also subscribed," an industry source pointed out.
For instance, the Zee-Turner bouquet, comprising 17 channels, is available for Rs 55 a month. However, the a la carte rates are not so attractive.
Zee has categorised its channels into three price bands: Rs 30 for the premium ones like Zee TV, Rs 20 for channels like Zee News and Rs 15 for the Alpha regional channels. A viewer can opt for Zee TV and Zee News for Rs 50, but Rs 5 more will get him 15 additional channels.
In the case of the ESPN and STAR Sports bouquet, opting for one will cost Rs 29 a month, but together they will be priced at Rs 32.
Other bouquets are expected to follow this strategy. The individual rates of the leading channels will be pitched high. With initial subscriptions to set-top boxes likely to be less, the pricing will be that much higher.
"If the number of set-top boxes in the markets is less, we have to set higher prices. These will come down as the consumer base expands. It is similar to the story of cell phones," Deepak Shourie, managing director of Discovery Communications, said.
The bouquets will have to be priced competitively because the consumer will anyway have to pay Rs 90-100 a month for the free-to-air channels and Rs 100-150 as rent for the set-top box.
"We are looking at a scenario where the monthly cable TV bill is going to increase for most viewers. The pressure on pricing is going to be intense," a broadcaster pointed out.
It is unlikely that the pricing issue will push broadcasters to make their channels free to air. According to the NRS 2002, there are 6.4 million cable and satellite homes in Delhi, Mumbai, Chennai and Kolkata, and 42 million in the country.
If a channel decides to go free in the four metropolises where the conditional access system will be introduced, it will have to do so for the entire country.
This will wipe out its subscription revenues. For sports and other niche channels, subscription revenues stand at around 50 per cent of the total revenues, and for entertainment channels at around 20 per cent.
Broadcasters will find it difficult to price their bouquets in the four metropolises where the conditional access system will be rolled out first. "You cannot upset the market by setting different prices for different regions," an industry executive said.
According to market sources, broadcasters may also come together and offer genre-based bouquets, with one each for general entertainment, movies, sports, and so on. For instance, STAR Plus, Zee TV and Sony could come as a bouquet.
