CAS blues: Now showing in your living room

What's the fuss-a stand-off in Parliament, black-outs by cable operators-about? Ostensibly, it's about the government's go-slow on the Cable Television Networks (Regulation) Amendment Bill, 2002, that promises to usher in a conditional access regime across the Rs 6,000 crore cable & satellite industry that reaches out to 40 million households.

Everyone should be happy with conditional access. The government can fix tariffs, the minimum number of free-to-air channels, even define the channels. The consumer can choose what she wants to see. And the 35,000-odd cable- and multi-service operators (MSOs) can charge what it costs them to deliver a channel to the viewer. ''In the past, everytime a pay-channel effected a price hike, we couldn't pass it on to the customer as she was blind to this,'' says Vikki Choudhary, President, National Cable & Telecommunications Association.

The Conditional Access System's (CAS) promise of subscriber-transparency should make it attractive to broadcasters. Today, operators under-report the number of subscribers: by one estimate, broadcasters like Sony, Star, and Zee get paid for only around 7 million subscribers, around a sixth of the number they should be paid for. ''Conditional Access will mean more revenues for us,'' admits Dev Naganand, Director & CEO, Zee Network. ''If it is implemented properly.''

Implementation holds the key. It is unlikely that the conditional access regime will be completely addressable from the broadcasters' point of view. Cable operators will have to share details of their subscribers with broadcasters. But monitoring 7,000 head-ends (points in ground where satellite signals are received and then transmitted through cable) won't be easy. Operators, then, will continue to under-report, although not as much as they do now.

Operators can also expect some pay channels to go free out of fear of loss of viewership. And as the number of free channels increases, they believe the Government will revise tariffs upwards. More and they can keep it all.

Broadcaster tariffs will become customer-centric-a function of the city, even the neighbourhood-but the desire to maintain viewership will prevent TV companies from upping the ante too much. Still, channels will gain from an increased subscriber base. Which is why, while pushing for Direct To Home-it promises total addressability-they're not particularly unhappy with conditional access

The government reiterates its commitment to conditional access but vaguely cites the need to build a political consensus as the reason for pulling the Bill out of the Rajya Sabha. Maybe it has something to do with the fact that the customer doesn't get that great a deal. Choice, she has, but apart from having to pay more than she does right now, she will also have to bear the cost of the set-top box that makes CAS possible (Rs 2,000-3,000). Consensus duly obtained, the Bill will probably go through, if not in this session then in the next. And the cas will change the existing cable operator and broadcaster driven order and replace it with a new cable operator and broadcaster driven one. The consumer be damned!

-Shailesh Dobhal

MUZZLE
The Draft That Never Was
It's a report, it's a draft, it's J-O-T-T-I-N-G-S.

It'll be hard for the joint parliamentary committee investigation 2001's stock scam to come up with a report that'll match the one it has just disowned. ''The so-called draft report published by the press does not represent the views of the JPC,'' says a statement issued by the Lok Sabha secretariat. ''The report in circulation is not a draft report,'' adds Prakash Mani Tripathi, a BJP Member of Parliament from Uttar Pradesh who is the chairman of the committee, ''but some jottings made by the JPC secretariat based on depositions rendered''. The leaked thingamajig (we're loath to put a name to it in the wake of this confusion) reads like a bestseller. And, like JPC reports are expected to, it takes the high moral ground: it pulls up a clutch of bankers, the stockmarket regulator, the central bank, and a finance ministry bureaucrat; rues the lack of action on the JPC report into the 1992 stockmarket scam; and tackles philosophical questions on demutualisation of the exchanges and corporatisation of the Unit Trust of India.

But why did the JPC pull the plug on this masterpiece? Tripathi isn't saying anything. And the other members of the committee have been ordered to clam up.

The volte-face, suggest sources in Delhi's extended power circle, may have been prompted by the fact that the leaked version did not incorporate a dissenting letter sent by four members of the committee-Amar Singh, Praful Patel, Prem Gupta, and Anwar Akhilesh Singh-over the inclusion of the name of a corporate in the draft report. The four wanted to disown the report immediately; others are said to have been embarrassed by the leak and apprehensive of the report's effect on next year's elections in some states. The final version, when it is released, could be a watered down version of the original with several 'dissenting notes'. And like the JPC report on the previous scam, it'll gather dust too. But hey, didn't a similar leak-disown-dilution happen with that one too?

-Ashish Gupta

B DOCTOR
Brand Suits In Demand
The quest for that big idea causes companies to hire brand consultants.

When fast moving consumer goods behemoth hindustan Lever Ltd was putting together plans for its ayurvedic foray Ayush, it requisitioned the services of brand consultancy Chlorophyll-before the products had been defined. The Rs 600-crore Balrampur Chini has retained Jagdeep Kapoor's Samsika Marketing to define and position its packaged sugar offering. Kapoor is riding high after the success of Dandi Namak, a packaged salt brand he helped launch in 2001. By 2003-end, sales of the brand are expected to touch Rs 100 crore. ''Democratisation of technology allows competition to achieve parity quickly,'' says Chlorophyll's Kiran Khalap, explaining the sudden demand for brand consultants. ''Marketers need to differentiate early, even before the product is ready and a brand consultant can do this.'' Advertising agencies, keen to position themselves as full-service providers, are launching their own brand c arms too. The buzz in ad circles is that McCann (Future Brand) and O&M are almost ready with their launches. Then, there are the smaller firms, like Chlorophyll, Samsika, and former Trikaya Grey pro Alok Nanda's eponymous company. There may be gloom in the FMCG and consumer durable markets, but the brand consulting business is booming.

-Seema Shukla

INC PLOT
Everybody Loves A Family Split...
...Because, most of the times it helps them to refocus their businesses better.

Corporate splits, especially of the kind that is spiced with a spat, always provide vicarious pleasure to the Indian business press and, presumably, to its readers. However boring and run of the mill a business family's disentangling and apportioning of assets is, you can be sure of seeing breathless reports prominently displayed on the front pages of the financial papers and in the business magazines (incidentally, the issue of Business Today you're reading has a four-page feature on l'affaire Bajaj).

Even if a split is practically inconsequential and doesn't affect the future of a company or a business group, it seems to make for big news. Till as recently as the mid-1990s, reports would regularly crop up on the front page about the latest turn of events in the long-drawn out unravelling of cross-holdings between the five or six factions of one of India's best-known business families, the Birlas. Although the Birla group's formal division of assets and businesses was achieved smoothly and with little acrimony shortly after the group patriarch G.D. Birla's demise in 1983, the labyrinthine crossholdings through which the family controlled its companies took some time to get unravelled. Yet, the business press of the period went to town every time an otherwise routine swap or sell-out took place between a myriad of investment firms.

Later, when branches of another business family, the Modis, started a seemingly never-ending war over a couple of group companies, the factions involved actually used the business press to further their cause, leaking documents and trading dirty linen. Ironically, the Modi versus Modi saga turned and twisted so many times and over so many episodes that the press finally lost interest and reader fatigue pushed it out of, first the front page and then out of the papers. Nobody now knows (or even cares) whether the family sorted out its bitter battle for the control of one or two key companies.

Splits in Indian families, especially the ones that are into their second or third generations, are often unavoidable. Particularly so given the penchant for the owner-manager pattern of running businesses in India. As Indian business families grow (and they are usually large ones), brothers, sons, daughters, nephews, etc, need to be given their share of the business. Sometimes, as in the case of Bajaj Auto, a share-holding family member who has little say in day to day running of the company, may want out, preferring to strike out on his own with businesses that he actually runs. As long as the Bajajs can work out an acceptable deal to buy back or otherwise compensate the brother who wants out it should not affect the future of the two-wheeler giant, where Rahul Bajaj and his two sons are firmly in charge.

But look at it from a different point of view. If Indian business families followed the Western practice of divorcing ownership from management and remained merely as shareholders (albeit with non-executive berths on boards of companies) leaving the managing of their businesses to professional managers, would splits and sell-outs be of any consequence? Perhaps not. But family splits and spats continue to grab headlines because in India Inc. managing a company is the birthright of the progeny of its promoters.

Yet even then splitting may not be a bad thing after all. There are quite a few examples of splits that have helped family groups to grow. Sometimes splits help rekindle the entrepreneurial fire in later generations of business families. The success of the Max group, which was originally spawned out of the Ranbaxy group, is one example.

In June, after the demise of Dhirubhai Ambani, there was much initial speculation about the future of the Reliance empire and over whether his two sons-who do differ in terms of their personalities and management styles-would fall out. That speculation was short-lived, but ponder a purely hypothetical split in the Reliance group. Suppose one brother decides to break off and run the group's new communications business and the other manages the older energy businesses. Would it be such a bad thing after all to have two clear-cut separate conglomerates, each with its focus sharply on businesses that are very different?

-Sanjoy Narayan