The first act in what is expected to be a major battle between broadcasters and cable operators was set in motion today after ESPN Software India Private Limited, which distributes ESPN and Star Sports services in India, switched off its feed to the Hinduja Group's InCable Network in Mumbai.
The feeds were switched off after InCable failed to sign the fresh service contract for the period commencing on 1 January 1, 2002 after the monthly subscription rates for the channel were raised from Rs 16 to Rs 24. The earlier annual service contract with InCable expired on 31 December, 2001.
Sricharan Iyengar, V-P - affiliate sales ESPN Software said: "Despite repeated efforts from our side for the past four weeks InCable Network has not signed the service contract for the ESPN & Star Sports services for the period beginning January 1, 2002."
InCable has stated it will be moving the courts on Monday to demand that the feed be restored. InCable's argument being that it had signed an agreement with ESPN Software last June which states that as long InCable paid its dues there would be no disruption in the feed. InCable's case is that the agreement is binding on both parties till June 2002.
One major MSO that has signed on to the new rates is Hathway Cable, which has already made the payment for the month of January 2002. However, since Star India is a 26 per cent stakeholder in Hathway (the majority stake is held by the Rajan Raheja Group), that is hardly surprising.
As for the other two major MSOs in the city, the Zee Group's SitiCable and Seven Star Cable Network which has a major presence in the western Vile Parle-Juhu-Andheri suburbs, they have also been switched off, cable industry sources state. Seven Star has in any case been lifting its feed off InCable since last August when it declared itself an InCable franchisee.
An ESPN Software spokesperson however pointed out that a dozen independent networks have already signed the new service agreements.
Explaining the reasons for the shutdown Sawhney said: "The sports television business is an expensive proposition. The costs of 48-hour sports programming (taking the two channels together) have gone up substantially with viewers demanding 'live' coverage of major sporting events, especially cricket, football, tennis and motor sport. In addition, there are issues such as massive under declaration by cable operators and rampant piracy of channel signals that forces broadcasters to revise prices on periodic basis."
Iyengar added: "InCable Network claims to service over 15.5 lakh (1.55 million) subscriber homes in Mumbai. However, it had declared only 1.5 lakh (150,000) connections for the purpose of payment under the service contract which expired on December 31, 2001. This is less than 10 per cent of the homes claimed to be serviced by the Network."
Even in 2001, ESPN Software was forced to switch off the sports services to InCable Network following the refusal of InCable Network to honour its commitment to increase the number of subscriber homes from 1.5 lakh to 1.75 lakh. The Honourable Bombay High Court had then ordered InCablenet to deposit subscription fees for the additional 25,000 homes in Court pending arbitration proceedings. "Despite such under declaration there has been no demand from our side for an immediate upward revision in the subscriber base of 1.75 lakh homes from InCable Network," Iyengar said.
