Content, pricing key to CAS, says study

The success of the conditional access system (CAS) will depend be on content and pricing, according to a TAM Media Research study.

L V Krishnan, CEO, TAM Media Research, said that pricing would be critical: Be it the final price of the set top box or of the channels.

Another important issue will be free-to-air channels, which in the CAS regime can be viewed without a set top box for a Rs 72 plus entertainment tax, could bring about viewer stickiness and CAS as a technology may not take off.

Case in point: Chennai, which was the only market where CAS was implemented and around 12 major pay channels went free. This came in the way of CAS penetration.

For CAS to succeed, content would have to be differentiated and individual channel pricing must not exceed current price and multi system operators (MSO's) would have to provide value addition from the set top box other than the same set of channels.

An interesting trend pointed out was that older age group viewers were more skewed towards free-to-air channels and younger age groups were more skewed towards pay channels.

That apart, the ownership of a set top box to watch pay TV is not going to be determined by the number of channels that a cable operator can supply but by the kind of content he can provide.

With CAS, the change will be seen in the priority and composition of channels in the top 30 list changing according to the individual's choice.

This in turn will lead to more viewership fragmentation. The implication being ad spends will be spread across channels and media agencies will need to manage inventory across more channels.

In markets where CAS has been implemented large general entertainment pay channels have retained their leadership position and have an audience share of less than 25 per cent.

Moreover, large advertisers have increased adspends and there is more presense in general entertainment pay channels and unique content channels. Also, with a higher subscription yield for broadcasters, a slew of no-ad channels came into being.

All said and done, in markets where CAS has been implemented, consumers have end up paying much more as compared to what they have been paying in the non-CAS regime.