Distribution business needed regulation: Punit Goenka on TRAI tariff order

ZEE was the first broadcaster to publish it's rate card as per the tariff order

e4m by exchange4media Staff
Updated: Nov 20, 2018 8:39 AM

After a three-month-long hearing, the Supreme Court last month upheld TRAI’s tariff order. ZEE was the first broadcaster to publish its rate card as per the tariff order, even before the court verdict. One of the arguments put forth by those opposing the order was that it puts a government cap on creativity and content.

Punit Goenka, MD & CEO of Zee Entertainment Enterprises Ltd, agrees that the argument is not wrong. He believes that the “moment you start putting a price on things, it can have an impact on the economics of the business.”

“Today it doesn't have any impact on the current business model, but no regulation is there forever. Regulation adapts and changes as it goes along. So while principally I am not in favour of regulation, the current environment of the distribution business, the subscription part, needed regulation for it to become streamlined,” said Goenka.

Is there even one product in this country where pricing has been flat for 25 years or where not even inflationary growth has been seen in the content accessed by the consumers?, he asked.

“That's a flawed part of the industry. No other industry works like that. So from that perspective, regulation is required for the current scenario to get resolved. And I am sure the government will reconsider when things settle down and we will become open market.” And Goenka is confident that at some point in future subscription fees will also become open, just like advertising and content acquisition.   

But will the regulation increase pricing for consumers in some way, in case one wants to continue with the entire pack of channels? Goenka agrees.

“It will, of course. However, this system gives the consumer the option to choose the price point. From the current Rs 180 to as low as Rs 150 or as high as Rs 500, that's what the regulation offers. The basic service is Rs 130, so if the consumer is happy with the basic service tier, they can pay the basic price. Just like telecom business; I can get a service at Rs 99 or some consumers even pay Rs 500, depending on whatever quantum of services you want to use. The same thing should apply to television. Why should we be any different? If you want to use more premium content you should be willing to pay more for it,” he argued.

According to Goenka, the order, like most other regulations, will not play out overnight.

“Today they don't have that capability. But this is the same thing that happened with digitisation. Was there the capability to digitise on day one when digitisation came into force? So maybe it will take six months or maybe nine months. It's not as if suddenly on January 1 everything changes overnight. It doesn't happen that way and I don't expect this regulation to also play out that way overnight.”

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