DPOs to meet TRAI over broadcasters' channel bouquet discount as existential fears mount
The struggle between cable and broadcast industries continues unabated, with cable operators growing increasingly alarmed at the prospects of their own obsolescence. This time around, distribution platform operators (DPOs) are considering reaching out to the Telecom Regulatory Authority of India (TRAI) to request reducing broadcasters' discounts on channel bouquets from 45% to 15%, arguing that the current discount incentivises broadcasters to push unwanted channels to customers.
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As per sources, the meeting is likely to happen in a few weeks.
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In July this year, TRAI issued the regulatory framework for Broadcasting and Cable services wherein it allowed DPOs to offer discounts of up to 45% while forming their own channel bouquets. DPOs argue that this discount is of no use, unless the channel bouquets are broken and the discounts offered by broadcasters are reduced. Explaining the issue, an industry observer said that if the price of a channel is Rs 19, and if the customer needs 3 channels, the total price comes up to Rs 57. The broadcaster then adds 10 more channels to these three channels for Rs 100 and then offer a 45% discount to customers on all 13 channels. So the new cost of the bouquet of 13 channels is Rs 55, which is attractive to customers. However, if a cable operator breaks this bouquet to offer only relevant channels to customers, at the same discount, it leads to losses for cable operators, as the customers choose more channels at the same or lesser price. “The reduction in the discount offered by broadcasters in their bouquets will reduce the pushing of unwanted channels to the subscribers, who are right now forced to take those channels in the garb of bundling,” he said. TRAI amendments to the regulatory framework shall come into force in October this year, before which the cable industry is likely to meet the officials to express their concerns. In its notification, TRAI said, “In consonance with the complete digitization of the cable TV sector, TRAI on 3rd March 2017 notified the Regulatory Framework for Broadcasting and Cable services. The framework was further tuned to the needs of the broadcasting ecosystem and to address the concerns of stakeholders through amendments issued in 2020 and 2022.” It noted that broadcasters, MSOs, DTH operators and LCOs had taken up further issues for the consideration of the Authority from time to time and to address such issues, the Authority issued a consultation paper on "Review of Regulatory Framework for Broadcasting and Cable services" on 8th August 2023 for seeking stakeholders' comments. The consultation paper sought comments and suggestions from various stakeholders, on several issues which included Network Capacity Fee (NCF), a discount limit on the sum of MRP of a-la-carte channels for fixing MRP of bouquets by the distributors of TV channels (Distribution Platform Operators-DPOs); equivalence of an HD channel in terms of SD channels for capacity calculations, mandatory V1'A News Channels in all packs formed by the DPOs, level playing field with DD Free Dish, an amendment to Reference Interconnect Offer, listing of channels in Electronic Programme Guide (EPG); revenue share between MSO and LCO, carriage fee, removal of channels after the expiry of the existing interconnection agreement, issues related to billing cycle, regulation of platform service channels, review of prescribed charges, consumer corner, the establishment of websites by DPOs, manual of practice etc. “The Authority analysed the comments of the stakeholders and the discussion held during the open house discussion and noted the level of competition in the market due to the presence of multiple Broadcasters, DPOs (MSO/DTH/ HITS/IPTV) and LCOs,” it had said. Another issue that DPOs have also been raising is around the distribution fee on the MRP of a-la-carte television channels. Expressing concern over the present regulatory regime, DPOs had earlier requested TRAI to grant them a flat 35% distribution fee on the MRP of a-la-carte television channels. Distribution fee is what DPOs and local cable operators (LCOs) get from their customers on the total price of the channels, which is determined by broadcasters. Presently, DPOs get a 20% distribution fee. They have an option to avail 15% more subject to conditions like ensuring 90-95% penetration of the broadcaster’s channels in the total customer base, said an industry insider. The cable operators had asked TRAI during their submission on its consultation paper on ‘Review of Regulatory Framework for Broadcasting and Cable Services’, that the conditions to avail 15% more distribution fee be done away with and they get a flat 35% fee from customers while 65% goes to the broadcasters.
Tags : Trai Broadcasters Channel Bouquet Discount Dpos Bouquet