Broadcasters miffed at TRAI’s new caps on channel pricing

Mumbai: A day after India’s broadcasting regulator announced new caps on pricing and bouquet discounts, Indian television stations have sought reversal of these changes that some broadcasters believe are “negative” for the entire value chain.“The authorities have been talking about not micro-managing every part of the business, but that’s what they are doing with these amendments,” said a top executive at a large broadcast network. “They have failed to give any logic behind the price cap of Rs 12, or the capping bouquet discount at 33%.”In the amended rules, announced after three-and-a-half months of consultation, the Telecom regulatory Authority of India (Trai) has reduced the cap on MRP of TV channels that are part of a bouquet by 37% to Rs 12 from Rs 19.The industry regulator has also brought back the analogue-era ‘twin conditions’, which limit broadcasters from offering more than 33% discounts on channel bouquets. Broadcasters have been asked to submit the revised rates of individual channels and bouquets on their websites by January 15.However, to voice their opposition, the top four broadcasters - Star, ZEE, Sony and Viacom18 - have withdrawn their existing reference interconnect offers (RIO) and rates, giving the mandatory 30-day notice.RIO is the contract between broadcasters and cable/ DTH networks, detailing matters relating to price and other service quality terms.“The top four networks have agreed to withdraw their existing RIOs and send the 30-day notice,” said the chief executive of a broadcasting network. “We are not acknowledging Trai’s new amendments. The regulator may not like this but we are forced by it to take extreme steps.”Zee Entertainment Enterprises (ZEE) has mentioned on its website that all previous versions of RIO and interconnection agreements of the company up to December 31, 2019, stand withdrawn.“Any RIO or interconnection agreement(s) received by ZEE after close of business hours on December 31 shall be invalid,” the broadcaster mentioned on its website.Similarly, Star India and Sony Pictures Networks India (SPN) have also said that existing packages are valid only until January 31. “The new regime is far more restrictive than the earlier one and appears to be negative for the broadcasters. Larger broadcasters with multiple driver channels could mitigate the impact by smart pricing of their bouquets or channels,” said Rohit Dokania, senior VP at IDFC Securities.Some of the executives ET spoke with said that they might agree on removing most popular channels from bouquets and price them higher, at Rs 25 per month. “If things don’t work out, we may take this decision collectively and allow the cable and DTH industry to keep those channels in their bouquets instead,” said an executive.Executives told ET that the Trai move would not help consumers, the intended beneficiaries of the latest amendments.“India is lowest ARPU TV market in the world. Why is Trai trying to control the price? More money is good for the entire sector as we will be able to invest in quality content. What Trai is talking about are rates of 2004-05. The cost of content alone has gone up 10 times since then,” said one executive.

from Economic Times https://ift.tt/36nNzVC