New Broadcasting Framework To Restructure The Business Of Television

Business Of Television

In a judgement that will have far reaching implications on the Indian broadcast industry, the Supreme Court dismissed a plea from Star India, paving the way for the implementation of the Telecom Regulatory Authority of India’s new tariff order for the broadcast sector. With a go-ahead from SC, TRAI will now be able to enforce the tariff order and interconnect regulations, which will entirely change the way broadcast deals were done in India since the advent of the private satellite television.

The new tariff order, industry experts said, may force broadcasters to shut down weaker channels and initiate further consolidation in the cable, DTH as well as in the broadcast sector. For starters, TV broadcasters so far used to sign fixed-fee deals with the delivery platform operators (DPOs), including cable and DTH players, charging a lump sum amount. The DPOs, on the other hand, used to charge a monthly fee from the consumers, without giving them the actual option to select channels of their choice. This all will change with the new tariff order, which will force TV broadcasters to announce maximum retail price (MRP) of their channels individually and of bouquets, which will allow a consumer to select and pay only for the channels she wants to watch.

Welcomed the order

Subhash Chandra, chairman, Zee Entertainment, said that the SC order is the best thing that could have happened to the industry, players and the consumers. “Supreme Court’s order has empowered the consumers across the nation… it is for the first time in 26 years that such a strong and positive step has been taken to eradicate the lack of transparency in the entire value chain,” Chandra said.

While many in the industry feel that it will be a nightmare for the service providers to comply with the required initial timelines and activities and implement the order, Rajan Gupta, president of All India Digital Cable Federation, said that this is the watershed moment the industry has been waiting for. “We feel that the new framework will bring in much-needed transparency, parity, promote exercising of choice for the consumer and ensure orderly growth of the sector,” he said.

For broadcasters, the biggest challenge will be sustaining the channels with lower viewership as those will get dropped completely. “Better brands and better products will get rewarded and the new order will benefit companies like Times Network,” said MK Anand, MD and CEO of Times Network, who believes that the move will also help broadcasters to move from a B2B to a B2C model.

According to Anand, the status quo in the cable and satellite distribution favoured the entrenched order. “The biggest inefficiency in the current system is the ground level collection and onward flow of value at the LCO level. This bottleneck will be cleared, which will improve the flow through the system and eventually benefit the industry and the consumer.”

With the judgment in the appeal filed by Star India against the orders of the Madras High Court dismissing its challenge to Trai’s jurisdiction to notify certain portions of the Interconnect Regulations and Tariff Order dated March 3, 2017, the near two year-long battle between the broadcasters and the regulator has come to an end.

Abhishek Malhotra, partner at Bharucha & Partners, said that the broadcasting business will undergo a massive operational shift with the order. “We will now see an MRP rate instead of price ceilings. For the first time, DPOs shall have to notify their reference interconnect offer. Most importantly, the consumer will finally know the MRP of the channel/s that she is subscribing to,” Malhotra said.

Broadcasting framework

Telecom regulator TRAI is planning a consumer outreach programme, to create user awareness on the nuances of its new tariff order and framework for broadcasting sector, a senior official said. TRAI’s move comes just days after the Supreme Court dismissed a plea challenging the Telecom Regulatory Authority of India’s (TRAI’s) March, 2017 regulations and tariff order relating to fixation of charges for free and pay channels. “For consumers, we will have an outreach programme on the new broadcasting framework. We will explain the new regulations to the consumers, what are their rights and also resolve queries, if any,” TRAI Secretary S K Gupta told. The modalities of the consumer outreach programme is currently being worked out, Gupta said adding that Delhi, Jaipur and other locations are being considered for the same.

The Supreme Court paved the way for the implementation of TRAI’s new tariff order for the broadcast sector. TRAI’s framework of July, allows consumers to select and pay only for the channels they wish to view, and requires TV broadcasters to disclose maximum retail price (MRP) of channels individually and that of bouquets. The order will provide offer consumers a choice, bring transparency and better service quality, TRAI Chairman R S Sharma told. The regulations are “consumer-friendly”, as they give people choice to subscribe to channels they want to see, and not be unnecessarily thrust channels in the name of bouquets, he said.

Also, Free To Air channels by broadcasters will be free to air even for consumers. “Every channel’s maximum retail price (MRP) will be displayed individually in electronic programme guide so that people will be able to subscribe to individual channels also,” Sharma said. The top court’s judgement, came on a plea by Star India Private Limited challenging the Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff Order, 2017 and the consequential Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) Regulations, 2017.

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