Does ceiling price of a-la-carte channels in bouquets need review?
TRAI’s consultation paper on tariff-related issues has stakeholders debating on whether there should be a ceiling price at all and should TRAI interfere with the pricing of channels. We find out more
Ever since TRAI came up with their consultation paper on tariff-related issues for broadcasting and cable services, the industry has been asking questions on what are the kind of changes the regulatory body plans to introduce to the present tariff order. Though there have been issues raised on bundle pricing in the consultation paper, experts feel that the only change that could come out of it is the change in ceiling price of a-la-carte channel to be part of a bouquet.
The pertinent question to ask here is does the ceiling price of Rs 19 of a-la-carte channel to be part of a bouquet needs to be reviewed? Some are also arguing about the fact that whether there should be a ceiling price at all? Should TRAI interfere with the pricing of channels?
According to the paper, bunching up of channels around certain MRP values was a practice even in 2017, the bunching is now closer to zero and Rs 19, in response to the caps set by the new Tariff Order.
Trends show, that while prices of most of the channels in 2017 were much below Rs 10 and only a few channels had high prices, the pricing pattern in 2019 clearly demonstrates bunching of most channels around Rs 19.
The paper highlights the fact that it is apparent that the tendency of broadcasters to price their driver channels at the threshold price of Rs 19 or close to it is purely based on commercial considerations.
“The consultation paper itself says that the abnormal high price of a pay channel may result in higher price of a bouquet leading to adverse impact on subscribers’ interests. The paper also mentions that prices are obscured because subscribers do not always understand the relationship between the bundle price and a price for each component. So sometimes the customer is not clear about what exactly they are paying for. At the end of the day they want their channels and do not want to understand the intricacies of the pricing,” said an industry insider.
"A few months ago TRAI brought out a regulation forcing cable operators to offer individual channel pricing instead of just bouquet pricing. However, while cable operators listed their individual channel pricing and bouquet pricing, they started offering huge discounts on the bouquet pricing. Thus rending the concept of individual channel pricing as infructuous. While TRAI’s move to review the concept of bouquet pricing is laudatory from a consumer perspective, I don’t think a regulatory body should interfere with pricing. Price for any product or service should be determined by market forces. TRAIs job should be to ensure adequate competition in the market place so that cartelization does not happen. But beyond that, let the market forces determine the actual pricing model,” said Hareesh Tibrewala, joint CEO of Mirum India.
Echoing Tibrewala’s thoughts, a broadcasters said, “The paper clearly says that there has been no visible change in consumer demand or preference that could be attributed to this sudden change in pricing at large level. Why do we need a change in pricing? Regulatory bodies should not interfere with price; that is a call for broadcaster’s to take.”
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