The Star Network on Tuesday announced its new subscription package of RS 30 per month.

A company release said the hike worked out to an increase of RS 6 per subscriber.

Justifying the release, Star India CEO Peter Mukerjea said: "We would like to hold on to our subscription rates, but because of the underdeclaration of subscribers by the trade we had no option but to increase the prices. We get paid for only a small fraction of the homes that receive cable and satellite channels."

Yash Khanna, head corporate communications, said that only one sixth of actual connectivity was being declared.

When queried as to what sort of response he expected from the hike he said Star was bracing for a possible blackout in Calcutta where RPG had 75 per cent C&S penetration while rival Zee Telefilm‘s Siti Cable had the remaining 25 per cent. As to what would be the response from other centres, he said they would have to wait and see.

Earlier, when informed of the impending hike, Shamim Shaikh of Mumbai-based independent MSO Seven Star Satellite Network had said there was no question of their accepting the new package. "None of the operators will accept these new rates and except for Hathway (where Star has a 26 per cent stake) it will probably lead to a situation that Star will switch off our feeds," Shaikh said.

Cable operators and control room owners in the western Indian state of Maharashtra are on a collision course with the state government threatening to terminate services indefinitely to protest against the state‘s tax collection drive. A total shutdown was set to go into effect as of Tuesday night after a marathon meeting in Mumbai which had representation from all across the state.

At the time of posting the report, the cable feeds were on in most parts of the city although in areas of central Mumbai like Sion it was off.

Earlier, the news was that the action would be deferred for two days to allow time for the issue to be resolved amicably.

Mumbai-based Live Satellite Media promoter Atul Saraf, who is on the committee of the Union of Cable Operators and Cable Room Owners (UCOCRO), said after the meeting that there was no question of backing down till their demands had been met.

Operators switched off feeds in many towns and cities across the state on Monday itself. Pune, Miraj, Sangli, Kolhapur and Pandharpur witnessed the first closures after revenue officials sealed control rooms in these places for non-payment of entertainment tax arrears.

Matters came to a head after a recent directive from the government to get tough on defaulting operators following which certain operators were arrested and control rooms seized. The issue has been hanging fire for over six months following the doubling of entertainment tax per connection per month from Rs 15 to Rs 30 in municipal areas and from Rs 10 to Rs 20 in other parts of the state. It may be recalled that operators went on strike over the issue in August 2000 after which a committee representing operators, the government and consumers was set up to resolve the issue.

The fizz has consistently being going out of Indian media shares on the stock exchanges. And today saw them hitting the depths. Zee Telefilms touched its 19 month low when it crashed 13 per cent to Rs 162.50 but it recovered to close at Rs 165.65. Other media counters like Jain Studios (down 15.27 per cent to Rs 71), Pentamedia Graphics (down 12.64 per cent to Rs 163.50) and Crest Communications (down 11.71 per cent to Rs 90.50) exceeded the eight per cent lower limit of the circuit breaker. Tips Industries (Rs 150.80), Padmalaya Telefilms (Rs 71.05), Cinevista Communications (Rs 73), Balaji Telefilms (RS 210.10), Vision Techno (Rs 30.40) and Pritish Nandy Communications (Rs 36.85) also lost substantial ground. Others such as G V Films, Creative Eye, Sri Adhikari Brothers, TV 18 and Saregama India were subdued.

But the most worrisome of the losers is the once numero uno television broadcaster Zee Telefilms which reported high trading volumes of 15.10 million on the Bombay stock exchange (BSE) and hit its lowest for a long time. Zee‘s share price has been going down consistently for the past year. After a 1:10 split, the share peaked at Rs 1,610 in March 2000 during the market frenzy - an outstanding climb. The price has since been moving southwards.

The heavy erosion has been attributed to many factors right from the market perception of media stocks, to the rise of Star as a strong competitor which chewed away Zee‘s advertising revenues, along with other rivals such as Sony, DD, Sahara, Sab TV and other regional language channels. Adding to the negative outlook was the sheer bungling of its high profile riposte to Star TV‘s Kaun Banega Crorepati - Sawal Das Crore Ka.

The company hared into several directions announcing a spate of diversification and did not follow up on them. Finally, its third quarter results were much below expectations and the fourth quarter is showing little signs of brightening up.

The company is trying hard to get over the whirlpool current it has got caught in. It is implementing the restructuring recommendations made by consultant AT Kearney. But the results are not showing up on the bottomline as yet and are still some time away.

Punters are expecting a slight rise in its price in the short term but the prognosis is that it is going to sink further and stay there for quite a while. Looks like there is little succor for investors in Zee Telefilms who may end up losing their shirts in its downfall.