Carriage fee issues need to be settled quickly: Television CEOs

Television honchos have stressed on clarity over the regulatory issues from the regulator, as well as early settlement of issues such as addressability of consumers & subscription revenues

e4m by Abhinav Trivedi
Updated: Mar 13, 2014 9:20 AM
Carriage fee issues need to be settled quickly: Television CEOs

When it comes to regulatory issues, industry leaders want “clarity” on the objectives of regulations by the regulator.

While stating that regulations in India do not cover all aspects equally, Vikram Chandra, Group CEO, NDTV said that if regulations are imposed over the ad cap, then there should also be an aspect of regulating carriage fees and, therefore, there should be nothing like “partially regulated”.

Agreeing with him, Uday Shankar, CEO, STAR India noted, “The issue is of non-uniform approach over regulation. Some sectors are over-regulated, while some are under-regulated.” He further said that there is lack of clarity in the intent of regulator, and unless a regulation clearly demarcates the objectives specifically, it cannot achieve what it is supposed to.

He also said that there is lack of understanding on the regulator’s part towards industry dynamics before imposing a regulation. To substantiate his point, Shankar cited the example of the recent order of TRAI, which limits content aggregators on various parameters while selling bouquets to MSOs without even understanding (according to him) the other side.

Sudhanshu Vats, Group CEO, Viacom18 mentioned that media is a consumer business and, therefore, regulations should be left to the market forces and there should be freedom of choice for the consumer. Free market operation and transparency of data were other points that he highlighted. He supported Shankar’s idea of clarity over the intent of the regulator. Accountability on licences and spectrum was another factor that he mentioned. He also raised the importance of foresight from the regulator in order to improve the regulatory framework.

Rahul Johri, GM, South Asia, Discovery Networks also raised the issue of clarity. He also expressed that self-regulation is the best regulation in a free market controlled by consumers, adding that one size does not fit all. He further said that regulations should not solve a problem in the short term, but take the long term vision into consideration. He remarked that India is a big market in Asia and cannot work like a restricted market.

Ajit Pai, Commissioner, FCC, USA added here, “A regulator should not only take into account where the market is, but where can it go. For that, the regulator needs to be flexible.”

Giving the Government’s point of view, Bimal Julka, Secretary, Ministry of Information and Broadcasting remarked, “I think we are moving in an area where partnerships are taking place and collaborative efforts are giving results.” He further said that inclusive growth is very important for the industry to grow. He also mentioned that stakeholders from all the facets in broadcasting – from LCOs to broadcasters – have raised various issues with the Government and that the Government is always keen on making uniform policy decisions and not different regulations for different aspects.

On digitisation has not yielding results as well as the issues regarding subscription revenues and carriage fees, Julka said that digitisation in Phases 1 and 2, which has been completed, and added that the data with the MIB indicates that carriage fees have gone down in many markets, while subscription revenues are up. He also mentioned that even on the tax front there is an upward trend, and added that only after the completion of Phases 3 and 4 of digitisation can one get a true picture of the benefits achieved. “All the stakeholders – from broadcasters to LCOs – have to work in this together and it is unfair to blame the Government, because we were just facilitators in the process,” he maintained.

Meanwhile, Shankar insisted on the objectives of digitisation that have not been enforced. He pointed out that even after Phase 1, Chennai continues to be an unregulated market, CAFs have not been completely filled and many other parts of the country are still not digitised as expected after Phases 1 and 2. He also said that despite MSOs pushing set top boxes in the market, it is not possible for the broadcasters to get a fair share of the revenue. According to him, if only certain points of the value chain are benefiting from the process, it creates distortion in the entire value chain. Vats of Viacom18 added that addressability is still an issue that has not been addressed post-digitisation. Chandra also added that in case of the big players, there have been some increase in subscription revenues, but for smaller players, there has been no increase in subscription revenues.

Johri also supported by highlighting that small channels, which cannot afford national infrastructure get affected. “FTA environment creates sensational content to get eyeballs, but when one is choosing subscription revenues in a digitised environment, one will get better content,” he said. Shankar also added the aspect of news, wherein he highlighted that due to high carriage fee and zero subscription revenue, news channels are not able to invest in high quality content and the regulator should, therefore, focus on a longer vision than a small snapshot of the present situation.

Giving his take on how to fix the situation of news channels and the overall television industry, where high carriage fee and zero subscription result in sensational content, Pai said, “Innovation by players such as Amazon and Netflix, which rely only on subscription and flexibility from the regulator, will help remove the bottlenecks of the sector.”

When asked about the possible road map, Julka replied that problems like Chennai will always be there in a democratic setup, while issues such as carriage fee and subscription revenues can only end after completion of the digitisation process. He stressed that all stakeholders need to come together to address the issues. While speaking on the content, he mentioned that with the increasing number of channels (800 existing and 250 pending applications), it is up to the broadcasters on what kind of content they have in order to attract eyeballs, as viewers and listeners are the prime focus.

Summing up, Vats said that licensing of channels, addressability of digitisation, and carriage fee settlement are the issues that need to be pondered on. Johri added that completion of the digitisation process is of prime importance. For Shankar, clarity over any regulatory decision on how it would benefit the consumer needs to be addressed.

The panellists were speaking on the topic ‘De-bottlenecking the Regulatory Hurdles’ on day one of FICCI Frames 2014, being held in Mumbai. 

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