The Government of India (GOI) has passed a mandate that all cable services in the four metros be digitized by 30th June, 2012.  From 30^th June, the four metro cities will cease to receive analogue television broadcast signals. The target for complete digitization in urban areas is September 31, 2014 while the entire country is expected to achieve digitization by December 31, 2014.

Currently, the cable operators transmit the channels in analog signal mode which is very hazy. In a digital signal, the receptivity is much clearer and all the channels have the same reception quality. As both the signals are received at the same time, there are no issues with the synchronization of sound with video. There is a huge cost involved in digitization of cable signals and many cable operators are shying away from this kind of investment, barring few organized and large scale cable operators.

Meeting the deadline is very difficult

Following government directives broadcasters will relay only encrypted digital signals that will then be accessible to customers with set top boxes (STBs). However, meeting this deadline is just impossible. This deadline implies installing over 1.5 lakh STBs per day in the four metros. Currently, the number of daily installations in the four metros together is only 10,000.

Benefits to Viewers

Unlike the earlier scenario, wherein subscribers were forced to choose whole packages of channels even if they did not watch them all, in the new regime, they will be allowed to choose channels on a la carte basis. In other words subscribers will have much better choice at picking only the channels that they want. This will surely bring in price regulation for both the Direct To Home (DTH) & digital cable operators. Also, the Cable TV networks are now free to recover digitization costs from broadcasters through ‘Carriage Fees’. Earlier they were charging the consumers for it. Carriage fees borne by broadcasters are estimated to be around Rs. 4,000 Crores (US$ 752 Million) annually.

Impact on Viewership Ratings

One of the expected benefits of digitization is much better transparency on viewership. This is one of the reasons why the legislation involved has been so contentious. Many channels are highly creative with their viewership numbers. Most like to retain that freedom to stay fuzzy. With digitization, data on media content consumption is much more concrete.

Globally, in most countries, TV channels earn 70% of its revenue from its subscription and only 30% from advertising. In India, the revenue split is exactly the reverse, with 70% of the channel revenues coming from advertising. Digitization is expected to bring down carriage fees and reduce dependence on television rating points. TV Channels fighting for high TRPs to woo the advertisers will see a decline, with reduced dependence of revenues from advertisers. With HDTV providing more control to viewers to filter the content (esp. advertisements), there is a fear that viewers may chose to cut advertisements for an additional subscription fees.

This is a double edged sword. On the one hand, digital broadcasting can help launch high-quality niche channels that cater to a specific, paying customer base. The lack of Indian equivalents of the UK’s BBC and America’s Public Service Broadcasting Service, with their formidable non-fiction programming is frequently lamented.

Friction-free access to new channels can remedy this and chances are that as the medium evolves in the years ahead, the paucity of quality programming may turn out to be a matter of the past. But,on the other hand, this can end up as a new war for eyeballs. And that will lead to the same approach to content that plagues our print media: where readers often pay little to nothing to be fed dubious content. This move is supposed to democratically benefit all stakeholders in the value chain. Only time will tell: Will it benefit all equally or Will it lead to new power-players?