Conditional access (CA) systems are helping Chinese cable operators not only safeguard their return on investment as they make the switch from analog to digital, but also set the stage for beefing up their offerings with value-added services in the future.
'Operators can go to SARFT for an interest-free loan to buy set-top boxes, and make back the money by adjusting the monthly fee for the service, but they have to show that everyone who's using the service is paying for it,' says Thierry Raymaekers, Asia-Pacific marketing MD for content security vendor Irdeto, which supplies CA systems to cable operators in China.
That's always been a tricky proposition with analog, with operators claiming that up to 30% of analog subscribers don't pay. Under-declaration of subscribers has also been a perennial problem, Raymaekers says.
'With digital CA, you can keep better track of who is paying and who isn't, and switch them off,' he says.
Irdeto supplies a number of cable operators in China. On Monday it announced a deal with Chengdu Cable to supply 400,000 CA smart cards by June 2008 as part of its migration to digital TV.
Raymaekers admits that one of the challenges of supplying CA systems in China is the unconventional competition.
'The way cable operators dealt with non-paying subscribers in the past was to hire networks of old ladies in the villages who would go around unplugging cables until the subscribers paid up,' he grins. 'That was their CA solution and it was cheaper than ours!'
However, operators are no longer just deploying CA to track deadbeat users and pirate boxes, he adds.
'Right now there's not much value-add for cable in China, but they're already looking ahead to new services like prepaid and cable VOD,' he said. 'They're also planning special channels to supplement Olympic Games coverage next year.'