CAS Conundrum Part II: Zee welcomes tariff order, others say it’s ridiculous, arbitrary, incomprehensible

CAS Conundrum Part II: Zee welcomes tariff order, others say it’s ridiculous, arbitrary, incomprehensible

Author | Asit Ranjan Mishra | Monday, Sep 04,2006 8:41 AM

CAS Conundrum Part II: Zee welcomes tariff order, others say it’s ridiculous, arbitrary, incomprehensible

Broadcasters are up in arms against TRAI’s order fixing the MRP for any pay channel at Rs 5, terming it as against the fundamentals of market forces. However, Zee Group, which is both into broadcasting and distribution, has whole-heartedly supported the various provisions or the TRAI order.

Peter Mukerjea, CEO, STAR Group India, termed the price fixed by TRAI as “ridiculous”. “Television has never been an essential commodity. Why should the regulator decide the prices of individual channels? TRAI should focus on other regulatory issues; it should not meddle with pricing of channels,” Mukerjea stressed.

Haresh Chawla, CEO, TV18, had a similar view. “This is a highly competitive business with huge capital investments. The need for intervention arises in markets where natural monopolies exist. In other competitive markets, the job of a regulator is to provide an environment for fair competition and not to impose artificial conditions. The issue needs to be debated at appropriate forums,” he maintained.

Zee, on the other hand, has come out in favour of the new tariff order. Ashish Kaul, VP, Corporate Brand Development, Zee Network, said, “It is stupid to look at the whole issue from the pricing angle only. In the short run, the collection of broadcasters may fall, but this has to be seen from a long-term perspective. This is the first step towards ensuring 100 per cent declaration of subscribers by cable operators and MSOs. This will lead to 100 per cent collection for all stakeholders, including broadcasters. So, ultimately it will help the broadcasters as well.”

One of the worst hit by the decision, as widely held, will be the sports broadcasters, which remain in demand only when cricket tournaments are on air. “Why only sports broadcasters? The pricing notified by TRAI is totally incomprehensible and arbitrary to all broadcasters,” said R C Venkateish, Managing Director, ESPN Software India Pvt Ltd. “It does not take into account various genres of broadcasters. It will be very damaging to the business model followed by different broadcasters,” he added.

In Chennai, which is the only city where CAS is currently in operation, ESPN-STAR Sports is providing its two channels at Rs 42 per month. When asked what options broadcasters were left with, Venkateish said, “We keep all our options open.”

Though the tariff order will mainly affect pay channels, are free-to-air channels in the safe zone in a CAS regime? “Though we are a FTA channel, my concern is who will decide which 30 FTA channels will be carried by an MSO or a cable operator? A broadcaster’s channel may not be carried though he will end up paying the carriage fee,” said Chintamani Rao, CEO, India TV.

The tariff order also affects the MSOs and cable operators as it fixes the tariff for FTA channels at Rs 77 and provides for two schemes for set-top boxes. “We welcome the ala carte fixation of prices by the regulator for pay channels as it is a consumer friendly measure. We expect the prices for the end user to fall by 25-30 per cent,” said A Mohan, VP, Siticable.

“However, we have issues regarding the TRAI order that the Rs 77 for FTA channels be entirely kept by the cable operators. Because cable operators will also be using our system, we will file for a review petition with TRAI demanding 15-20 per cent of the amount be shared with the MSOs. As far as pricing of set-top box is concerned, we don’t have any issue except that TRAI should include Rs 400 refundable amount for the smart card,” Mohan added.

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