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MSOs/DTH deliberately discourage a-la-carte pricing; channels show too many ads: Parliamentary Panel

09-January-2018
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MSOs/DTH deliberately discourage a-la-carte pricing; channels show too many ads: Parliamentary Panel

The Standing Committee on Information Technology (2017-18) in a recent report noted that one of the major benefits of digitisation was stated to be “empowering consumers to exercise an a-la-carte for individual selection of channels so that they will pay only for what they decide to watch" but the ground reality is entirely different.
The committee, headed by Anurag Thakur, drew the conclusion after taking into consideration “serious concerns” on the issue raised by Cable Operators Federation of India (COFI) and News Broadcasters Association (NBA).

The COFI had stated that a-la-carte choice was not given to consumers and wherever it is offered, it is made out of reach of the customers. Also, NBA, on similar lines, said that DPO packages were pushed to consumers and a-la-carte pricing was made unattractive at retail.

No Freedom to Choose Channels

While stating that broadcasters were impinging on the “freedom of consumers to choose channels of their choice”, the parliamentary committee observed that “deliberate attempt by MSOs/DTH operators” are made “to discourage selection of individual channels by pushing their tailor made packages for their vested interests.”

“The committee is concerned to note the absurdity in the pricing of the bouquets of channels, that a channel within the bouquet when chosen separately may cost more than the cost of the entire bouquet,” the Parliamentary Panel noted.

In order to give consumers more flexibility of choosing channel on a-la-carte basis TRAI had come with a Regulation that includes measures such as “broadcasters to declare nature of its channels (pay or FTA); no charge on FTA channels; Broadcasters to declare MRP of its channels; offering all channels on a-la-carte basis to distributors, MRP to be displayed on electronic programme guide; transparent declaration of information relating to choice; price etc.”

Frequent, Long Dose of Advertisement To Consumers

While the TV subscription revenue has increased from Rs 329 billion in 2011 to Rs 588.3 billion in 2016, advertising revenue has also increased from Rs 116 billion in 2011 to Rs 201.2 billion in 2016 keeping the percentage of advertisement revenue of the TV industry, as per Industry Report, static in the range of 33-35% of the total revenue of TV industry.

“There is no noticeable shift from advertising revenue to subscription revenue in the post digitisation era,” the committee noted. However, it was expected that post digitisation dependence on advertisement revenue would reduce and increased carrying capacity would enable Broadcasters to offer HD channels. 

The committee noted that “no more ad free channels have been reported by Broadcasters after 2012.”

Above all that, the committee noted that both FTA as well as the pay channels were having a free run subjecting consumers to frequent long dose of advertisements during a programme.

Despite knowing that the Telecom Regulatory Authority of India’s (TRAI) ad regulation restricts ads exceeding 12 minutes per hour, presently a sub judice matter, the committee made its recommendation saying that “steps must be taken to regulate the permissible duration and frequency of advertisement during a programme.”

The committee made this recommendation so that viewers don’t have to bear too many ads in quick succession, which broadcasters may do to maximise their advertisement revenue.

The MIB was also asked by the standing committee to ensure that ads being run in scroll/ticker do not cover more than 10% of the TV screen and “do not spoil the aesthetic sense of the programme being telecast.”

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