The Indian Techonomist: bulletin

Copyright (C) 1996, Rishab Aiyer Ghosh (
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Indian cable union bans ESPN for charging

June 9, 1996: Early this week the Maharashtra Cable Sena, a union of cable operators in western India announced its decision to ban the ESPN sports channel across the entire state of Maharashtra, including state capital Mumbai (Bombay). This was the result of what was called an emergency meeting on May 30, soon after ESPN decided to start charging its viewers. The Cable Sena stated that its action was intended to "discourage the practice of earning extra revenue" through a pay-TV channel.

The Cable Sena is better known for its attacks on what it calls obscenity on television; it is loosely affiliated to the Shiv Sena, a militant right-wing political party that is particular about Maharashtrian values - and happens to run the state. In acting against ESPN - for the channel's crime of charging viewers to see cricket matches - the Sena has only done what most cable operators might wish. This is not of any great concern for viewers, who pay cable operators anyway, albeit only about $5 a month. (In India, small sums add up - cable subscribers paid some $600 million last year, and the revenues are growing at well over 30% annually.)

Rather, cable operators are concerned that they may have to share their considerable income with the channels they carry. With some 30,000 to 40,000 cable operators in an extremely disorganised and unregulated business, cable TV in India is a bit like the Internet business in the US - small, decentralised providers offering low rates, contributing little to a strong, reliable infrastructure and returning nothing to the originators of content that make their services valuable in the first place. Instead of sharing subscriber revenue, the unfortunate channels have to rely on advertising - a comparatively low $300 million is expected in TV ad spend this year, most of it going to state-owned Doordarshan, which has an audience share exceeding 75% due to its terrestrial network.

Private channels are not yet allowed to broadcast terrestrially (and are unlikely to want to invest in a huge network like Doordarshan, which covers the whole country). They are forced to rely on cable operators for building a mass audience, the only way to attract advertising. Cable operators have taken full advantage of this, refusing to pay to carry signals, and occasionally trying to extort carriage fees from the broadcasters. Consolidation within the industry, proceeding at a snail's pace, does not appear to help much - it was InCable, a largish network in Delhi and Mumbai owned by the Hindujas that was rumoured to ask for $2 million per channel in carriage fees.

And not every broadcaster can match Zee TV (affiliated to News Corp's STAR network) which has built its own cable network, Siti Cable. Siti recently announced plans to spend $30 million over the next year improving service, providing cable-only movie and "film-based" channels, and connecting 15 more cities greatly increasing its (claimed) subscriber base of 2.2 million homes.

Instead, the bright hope for satellite channels - particularly niche channels without tremendous advertising potential - is direct-to-home (DTH) broadcasting. If the many projects at various stages of planning (proponents include Doordarshan, Malaysia's MEASAT, STAR/Asiasat, Thailand's Shinawatra, and possibly Hughes, Loral and DirecTV) take off, and prices of receivers fall, then ESPN will finally be able to treat the Cable Sena with the indifference it deserves.

On why television and radio is officially a state monopoly in India, and how this will change thanks to a Supreme Court verdict see