TRAI Regulation On Channel Tariffs Are Negative For Broadcasters: Report

After consulting with stakeholders, TRAI has recently come up with new amendments for DTH and cable TV operators. But now a new report by research firm suggested that it is negative for broadcasters. The firm says that the new amendments are focusing on price reduction, but somehow it is putting a burden on broadcasters.

"The revised regulations stipulate a reduction in a-la-carte pricing for channels and a cap on bouquet prices in line with a-la-carte prices, which would impact broadcasters' profitability meaningfully," India Ratings said in a statement.

The firm intimated that measures such as reducing network capacity fees and carriage fees are not good for multiple system operators (MSOs). Besides, announcing a discount on bouquet pricing seems very surprising to the firm, as Madras High Court had ruled against this norm earlier. Moreover, the research firm believes that it will affect the business model of MSOs and local cable operators, as their revenue depends upon the fixed NCF and content commission from the broadcasters.

It said, "The increase in the total number of channels under the base NCF to 200 from 100 earlier is unlikely to have any major impact, as MSOs anyways offer above 200 channels under the current price regime for NCF of Rs.130. Also, the exclusion of mandatory channels as per the government from the bouquet of 200 channels may free-up space for additional pay channels, which may further reduce NCF for MSOs."

Apart from that, the regulator has now allowed to provide discounts on long term channels. However, it said, the prices of the packs shouldn't be very cheap.

Furthermore, the regulator said channels like Star, Zee, and Sony should be priced separately, it should not be included under Rs. 12 bouquets. On the other hand, the research firm believes that these changes are not good for the sports genre, as content acquisition plays an important role in this genre.