Home » Broadcasters challenge TRAI’s tariff order, fear subscription revenue dip

Broadcasters challenge TRAI’s tariff order, fear subscription revenue dip

by Raju Vernekar
0 comment 4 minutes read

IT News
Mumbai, Jan 17

Even as television broadcasters in India have challenged Telecom Regulatory Authority of India’s (TRAI’s) new order reducing tariff to give relief to consumers, the Bombay High Court has refused to grant interim relief to the broadcasters.
The division bench of Justices SC Dharmadhikari and RI Chagla at the Bombay High Court has not provided interim relief to the broadcasters till the next hearing of the case on  January 22, 2020, but it has issued a notice to TRAI to file an affidavit in response to the petitions filed by the broadcasters, by  January 20.
The petition has been filed by the Indian Broadcasting Foundation (IBF) challenging TRAIs’ order. Apart from the IBF, broadcasters like Star and Disney India, Zee Entertainment Enterprises (ZEE), Sony Pictures Networks India (SPN), TV18 and Viacom18, and the Films & Television Producers Guild of India have also filed petitions. In response TRAI has filed caveats in all major high courts against issuing a stay without hearing what it has to say in the matter.
As per the TRAI’s order-NTO- 2019, the TV channels cannot be priced more than Rs 19, if part of a bouquet of channels. There is no pricing cap on channels which are not part of any bouquet and are designated premium channels. Also, there is no cap on the amount of discount a broadcaster can offer on the sum of the MRPs of all the channels in the pack. TRAI has notified new rules that permit TV broadcasters to include a channel in a pack only if it wasn’t priced more than Rs.12. Earlier, this limit was Rs.19.
NTO 2019, was first issued in December 2018 and implemented in February 2019. Now the distribution platform operators (DPOs), (a term used for cable and DTH operators) are given 15 days to revise their packages. Ultimately, consumers will have one month to select channels or bouquets of their choice and the new rates will be effective March 1. The ground level cable operators have been given time till January 30 to make the new tariff public so that the customers can make choices.
When TRAI’s original NTO was implemented in February 2019, it received much flak as it raised the price for consumers for like-to-like entertainment. The NTO was aimed at allowing consumers to choose a la carte channels and hence bring their cable bills down as it mandated that each channel should be priced individually. However, it resulted in the opposite.
Media industry experts say that broadcasters priced their popular channels at Rs.19 and less popular channels at a very low price and then bundled and offered them at a steep discount. This led to consumers opting for packs rather than buying a la carte channels, defeating the purpose of the NTO.
The new order “NTO 2.0” as TRAI calls it, has also allowed the distribution platforms owners (or DPOs such as cable operators and DTH companies) to increase the number of free-to-air (FTA) channels in their bouquet to 200 with a network capacity fee (NCF) of Rs.160. Earlier, only 100 FTA channels were allowed in the bouquet for Rs.130.
Broadcasters argue against DPOs being allowed to charge Rs.160 for free channels. The owners of distribution platforms will not allow subscribers to choose their own channels as they will push their own set of FTA channels, which will be included on the basis of the carriage fee.
According to the broadcasters as per the new tariff the individual price of a channel will be Rs 12 from earlier Rs.19 which will hit them hard since cost of content acquisition has been growing over the past few years and this new tariff  amounts to 37 per cent drop in the individual price of a channel and estimated 10 per cent fall in subscription revenue.
TRAI Chairman R.S. Sharma said that NTO 2.0 is a fine-tuning exercise. “The purpose of NTO always was to ensure transparency and non-discrimination. We just felt a few things were either left out or distorted in the earlier provision and the idea was to straighten those out, provide more content to the consumer at the same price,”.

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