CAS effect: Channels switch to merger mode

Implementation of the conditional access system and the rollout of direct-to-home broadcasting services are expected to drive consolidation in the Indian broadcasting sector.

At present, a subscriber gets around 100 channels for an average cable charge of Rs 250 per month, which is about 50 per cent of the real retail cost of these channels.

"Once the subscribers have to pay the real cost of the channels, they will be very selective in choosing the channels. The only way to ensure that you are picked up is by offering a strong content," says Times Now CEO Sunil Lulla.

The country's broadcasting sector has been seeing some consolidation of late. English news channel CNN-IBN recently acquired 50 per cent stake in Hindi news channel Channel 7 while Sony Entertainment acquired SAB TV.

A recently-launched English news channel is in talks with another Hindi channel for possible acquisition. Regional language news channels are also in talks with Hindi channels to enter the mainstream.

According to PricewaterhouseCoopers, broadcasting will grow over 24 per cent every year till 2010 to become a Rs 42,700-crore industry, from the current size of Rs 14,800 crore.

"Consolidation has to happen. Both the consumers and markets are demanding it," says Sameer Manchanda, managing director, CNN-IBN.