Though Star India announced a 25 per cent cut in subscription rates from Rs 40 to Rs 30 on Monday, the company has incorporated a set of conditions in the fine print which has peeved cable operators.
Star has, in fact, introduced a structured rate system which makes the new rate applicable only to those operators who declare a 100 per cent increase in the subscriber base.
However, the operator will have to pay at the current Rs 40 if declarations are 50 per cent or less.
Star's pricing has been linked to declaration under a slab system wherein if the cable operator increases existing declaration of subscriber base by 100 per cent, the Star bouquet will come at Rs 30 a month per subscriber, if the declaration is increased by 85 per cent, then the price would be Rs 33, if the declaration is increased by 60 per cent, then it would be Rs 39 and if the declaration is increased by 50 per cent or less, the price would remain the same which is Rs 40.
Jagjit Singh Kohli, director, Win Cable, a prominent multisystem operator said, "The new structure effectively is a hike rather than a decrease in rates. We have yet to take a view on the situation and right now are having internal discussions on the issue."
Some other prominent MSOs said since the business is one where a lumpsum amount is paid by the MSO to the channel based on the number of subscribers, Star has only resorted at window dressing and tried to put the pressure on the operators to pay up more.
However they viewed the current situation as a temporary one especially in view of the fact that the Conditional Access Bill has been passed by Parliament which would ease problems on under declaration to a great extent.
As per the new rate structure, Star has instituted a slab system, which instead of reducing rates has actually maintained the same price.
While other television channels have resorted to a clear cut strategy of increasing subscription charges to boost revenues, Star India has adopted an innovative approach in boosting revenues which is by tackling the problem of under-declaration rather than using the hike in subscription as a method which according to industry experts is counterproductive.
The company had recently forged an alliance with INCablenet and Hathway Cable, two leading MSOs, to jointly work out a strategy to curb the problem of under-declaration by local cable operators.
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