On uneven surf: The tube's snapped shut

TELEVISION broadcasting was marked by consolidation, while music and event management companies went through a lean year. For television, ’02 was a milestone year with conditional access (CAS) becoming law in the face of opposition from some broadcasters.
The controversial CAS amendment in the Cable Network Act, piloted by I&B minister Sushma Swaraj, was passed by the Rajya Sabha in December and notified for implementation by July 14. CAS is expected to change the rules of the game with consumers paying for only what they watch.
However, the total package is expected to be more expensive than the current cable rates with fewer channels in the pay bouquet. The ultimate cost to the consumer will also depend on which way the budget impacts the industry.
For instance, the big cable networks have made a pitch with the finance ministry demanding zero duty for all CAS and set-top box-related imports.
Since CAS’ roll-out is extremely price sensitive and since the cost of set-top boxes is a crucial factor, industry sources said the cable industry had been assured a sizeable cut in import duty on equipment and electronic parts used for manufacturing CAS boxes.
The current customs duty on various types of cable equipment import varies from 40% to 60%, an average of 56%, and the cable industry expects that those items that are CAS-related would be slashed to 10%. However, a major cut in import duty on these items will adversely impact local manufacturers.
“Even modulators and cable imports can be classed as CAS-related and a lower import duty slab claimed,� pointed out Dinyar Contractor, editor of the industry journal ‘Satellite & Cable TV’. After expansion in the number of satellite channels, TV broadcasting saw a consolidation process with fewer new entrants and the dying away of unsustainable channels.
Music companies went through another disastrous year. Companies like Universal, Tips and Sony Music suffered big losses on account of expensive purchases of music of Bollywood films, and low sales at the retail end. The music for ‘Yaadein’ acquired for Rs 6.5 crore, for instance, barely earned Tips 50% of the original cost. As a result of several such expensive buys, it faced a loss of Rs 12 crore in the first six months of the current year. This has forced a change of strategy with most music banners now opting for a revenue-sharing model with film producers. The Rs 1,200-crore industry also found 40% of its earnings eroded by cheap pirated editions.