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TRAI should de-regulate the broadcasting industry: Rajesh Kaul

TRAI should de-regulate the broadcasting industry: Rajesh Kaul

Author | Abhinav Trivedi | Tuesday, Aug 27,2013 9:07 AM

TRAI should de-regulate the broadcasting industry: Rajesh Kaul

In a conversation with exchange4media, Rajesh Kaul, President, The One-Alliance talks about market regulations and why TRAI should not micromanage the broadcasting and distribution industry.

As is known, The One Alliance Company recently completed 11 years in the market. Kaul shared that the addition of Times Television Network in February this year has been “very rewarding” for The One Alliance Company. “With the addition of TTN now, the bouquet is very formidable and strong,” he affirmed.

TRAI in its recent consultation paper mentioned that top four content aggregators, including One Alliance, command substantial negotiating powers, compelling MSOs to enter into deals that are not accepted by them, for example, demanding unnecessary licence fee. This has also impacted the scope of digitisation. What do you have to say about this?
We are working on a reply to be given to TRAI and provide the other side of the story as there may have been some misconceptions, which we need to clarify with the regulator.

As far as demanding unnecessary license fee is concerned, we have not done that with any MSO. We do charge a subscription fee from broadcasters, and even in that the under-declaration is so high that broadcasters never get their due amount of revenue. We were hopeful that post digitisation, broadcasters will start getting their fair share, which is around 35-40 per cent globally.

I believe that time has come for TRAI to leave the entire regulation to the market forces and competition on the ground. There are 700 channels in the market and every genre has around 15 to 20 channels, so even if you keep forbearance, and I feel this is the right time for it, this is not the right time for regulations. Even if one asks to me to charge any rate, I won’t be able to do it, because I need to have good content. I need to be affordable. This is the time for forbearance and we should not be talking about regulations.

Do you feel TRAI should not micromanage the industry?
TRAI has been vocal that it does not want to do that. They are very open that they want to deregulate the industry now. However, there are a lot of regulations on broadcasters such as ‘price freeze’, ‘must provide’ and so on. But there is no ‘must carry’ for an MSO. They can choose the channel they like, irrespective of whether the consumer wants it or not. But the broadcaster has no option but to give the channel to the MSO. This has to change.

We spoke to some MSOs in Gujarat, Rajasthan and UP, who have alleged that MSOs and DTH platforms are treated differently by aggregators. Even TRAI’s consultation paper highlights this fact. What do you have to say about it?
That is unfair, because the same power is there for DTH as well. I don’t have separate powers for DTH and MSO. We deal with all the platforms in a similar manner.

In that case, why are such allegations being made? MSOs are very vocal about mistreatment done by the aggregators.
TRAI has all the details about our earnings and the sources, besides the stakeholders admit that broadcasters have not been able to get a fair share of the revenues for decades. So, allegations like MSM Network has flexed its muscles to gain something are not true. That way my revenue share would have been five times of what I have been earning. But the revenue of all the pay channels put together earn is not even 10 per cent of the market. As far as the TRAI paper is concerned, we are not sure about which aggregator they are talking about when they say that DTH and MSOs are treated separately.

What is the distribution of revenues between DTH and cable TV?
I would say it is around 55 per cent for cable TV and 45 per cent for DTH.

Post DAS, how has your experience been with market forces on the ground?
I would say that it has been good, even though we had to tone down our revenue expectations, but that was done to ensure that digitisation happens. We had initially thought that post digitisation the revenues would multiply and there would be no carriage fee, but eventually all broadcasters agreed to TRAI’s suggestion. Compared to the conditions six months back, a lot of things have worked out for us and things are falling into place.

How much has been the reduction in carriage fees, and by how much have subscription revenues gone up?
On an average, carriage fees have come down by 20-25 per cent. The fees vary from channel to channel. However,  subscription fees have gone up by 20-22 per cent.

What, according to you, are the loopholes in the present system?
The whole addressability advantage, which was the crux of digitisation, where the consumer has to pay only for what he wants, has not happened. This is largely because the backend is not yet ready for MSOs or they don’t have information of the latest developments. Consumers should start choosing channels, and for that, MSOs should start coming up with different packages. This, I feel, will translate into complete transparency. As a broadcaster, I need to be sure how many boxes I am feeding, what is happening on the ground and so on. MSOs are not giving us the reports as they don’t have the complete information. A fair share of the revenue is very important for the industry to grow.

How are politically sensitive markets such as Bengal and Chennai, which had opposed blackout of TV screens post digitisation deadline, performing now?
West Bengal and Tamil Nadu are not similar. There was earlier a problem in Kolkata, but it was resolved in a couple of months. So, I don’t see a problem there. But Chennai is a big concern. Analogue signals are still being carried there. That should stop for the benefit of the industry.

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