Digitisation: Chennai's cable drama to eclipse tear-jerker soaps
When it comes to the mandatory digitisation, Chennai, one of the four metros that have to shift to cable-distribution through set top boxes by 31 October, the city has the worst record and managed to obtain a five-day extension from the Chennai High Court.
Chennai: It's a well known fact, even without census statistics and trade body figures, that cable TV and movies are the staple for a normal life in Tamil Nadu. In fact, TV and cable penetration tops other statistics in the state and for a change, there is no major rural-urban divide.
With the previous DMK government adding TV to its list of soaps, the cable penetration witnessed a spurt and opposition alleged that Karunanidhi’s family, or more precisely the Marans who are in satellite TV and cable business, benefited big time.
But when it comes to the mandatory digitisation, Chennai, one of the four metros that have to shift to cable-distribution through set top boxes by 31 October, the city has the worst record and managed to obtain a five-day extension from the Chennai High Court.
While Mumbai recorded more than 100 percent digitisation followed by Delhi (92) and Calcutta (82), Chennai could manage only 62 percent. Even the extra days allowed by the court is not likely to improve the situation considerably because of the huge backlog and shortage in set top boxes.
Although one of the reasons for the spurt in cable TV subscription in the state can be attributed to the unique Arasu Cable TV Corporation of the government, in Chennai, it started operations only recently. The government company’s effort is to provide cheap cable access, which in the process will dent the existing monopolies, particularly that of the Marans.
In fact, the Arasu Corporation was originally set up by Karunanidhi government when the patriarch and his family had fallen out with the Marans. Subsequently, when the factions patched up, the company was junked and the officer, who wanted to continue the operation was shunted out. The officer was in fact handpicked for the job because of his efficiency and dare-devilish attitude, but when he was asked to go slow, he didn’t oblige citing the tax payers’ money pumped into the project and the extensive optical fibre network that was laid by the company.
The Jayalalithaa government revived Arasu Cable and in the last six months, its subscriber base has apparently gone up six times. The company now has about 55 lakh subscribers. Its stated mission is to provide cable service at affordable cost and to protect the last mile cable operator. Both indirectly hit at the existing big Multi System Operators, who control the neighbourhood local operators. According to the government, more than 30,000 operators, with about 1.2 crore subscribers, have signed up with Arasu.
In Chennai, the government cable company’s role in digitisation is not that big at the moment, given that it started operations only recently. Perhaps one of the reasons why the process is slow is that people are waiting for Arasu Cable since it is cheap. While the standard monthly subscription is Rs 250 or more, Arasu charges only Rs 70.
The company, in fact, had announced its digitisation plan a few months ago asking the local able operators, who have signed up with it, to remit Rs 500 for each subscriber to its account by 15 October. The company has also awarded the digitisation tender for the city.
While other metro cities have reportedly recorded a surge in the demand for DTH connections close to the set-top-box deadline, high prices will be a dampener in Chennai. While reviving the Arasu cable company, the Tamil Nadu government also had imposed a 30 percent entertainment tax on DTH services.
The obvious beneficiary was Arasu Cable and the loser, the DTH operators, most notably Kalanidhi Maran, who runs Sun Direct and a bouquet of channels in various regional languages. Till August, the government cable company didn’t carry Maran’s channels and his reach among analogue subscribers had reportedly fallen by 24 percent. Finally, Sun struck a deal with Arasu for a monthly payment of Rs 3 crore although it bargained hard for a higher amount.
However, the digitisation will end the PDS-priced cable TV in Tamil Nadu. At present the company provides 90 channels, which include some pay channels, for Rs 70. As in the case of Sun TV, the government will certainly be able to arm-twist the pay channels and bring down their tariff, but not to the level of continuing at Rs 70.
The company certainly has an edge with claims of 95 percent of the cable subscribers outside the cities, which it will try to match in Chennai with its official muscle. The pay channels might not be left with any other option but to get into a compromise deal or be blacked out. In the end, the customer will be the beneficiary as Arasu was originally intended for.
Meanwhile, the Madras High Court has recently termed the 30 percent entertainment tax on DTH in Tamil Nadu as unconstitutional and asked the government to remove it. All the DTH companies together had approached the Court and said that the tax was a violation of Article 14. The state government had amended the Tamil Nadu Entertainment Tax Act 1939 for the additional levy.
The removal of entertainment tax will help the premium subscribers to stick with DTH and even attract more. The city has about 7.5 lakh DTH customers; with the general interest in TV and entertainment, and the digitisation deadline, this should have been higher, but for the 30 percent extra bill every month.
Anyway, thousands of entertainment-hungry residents of Chennai will have to face the prospect that advertisements have been warning for some time — simply gazing at grains. It’s impossible to cover 35 percent of the subscribers in five days!