DTH operators spar with broadcasters over pay channels on DD Free Dish

Operators, who have lost millions of low paying subscribers to Free Dish, allege that the practice goes against the principles of NTO 2.0 meant to provide a level-playing field and parity

e4m by Javed Farooqui
Updated: Sep 9, 2021 8:28 AM

8.1k

dth

Private direct to home (DTH) operators have renewed their demands to the Telecom Regulatory Authority of India (TRAI) to act against broadcasters who are offering pay channels to Prasar Bharati's free DTH platform DD Free Dish. In the recent past, Dish TV, Bharti Telemedia, and Tata Sky have written to TRAI to look into the issue and restrain pay broadcasters from offering pay channels to DD Free Dish. The TRAI is yet to take any action in the matter.

The DTH operators have alleged that the availability of pay channels for free on DD Free Dish is discriminatory and goes against the basic principles of the new tariff regime, which provides for a level-playing field and parity. As per the New Tariff Order (NTO), broadcasters have to designate channels either as free to air (FTA) or pay and the two set of channels cannot be bundled. The MRP of pay channels will have to be uniform across all distribution platforms. It is pertinent to note that DD Free Dish being a free platform doesn't come under the tariff framework.

DD Free Dish, which reaches an estimated 40+ million TV homes, has emerged as a magnet for broadcasters to reach rural viewers. At present, DD Free Dish has 161 channels, of which 20 are pay channels. The number of pay channels on the platform has seen a steady increase as broadcasters chase eyeballs and ad revenue.

Private broadcasters and DD Free Dish are feeding off each other as the availability of quality content at no cost helps the free DTH operator to increase its adoption. This phenomenon has raised concern among pay DTH players, who are seeing the migration of customers to DD Free Dish. In the last few years, DTH operators have lost millions of low paying subscribers to DD Free Dish.

Tata Sky MD and CEO Harit Nagpal asserts that he loves DD Free Dish as a platform since it is a stepping stone for free TV users to someday migrate to pay platforms. His grouse is with the pay broadcasters, who are discriminating between DD Free Dish and pay platforms like Tata Sky. Channels like Star Utsav, Zee Anmol, Colors Rishtey, and Sony Pal are available as pay channels on private distribution platforms and as free channels on DD Free Dish.

“The purpose of NTO was to create a level playing field and transparency. Broadcasters had to decide the price of the channel, what is the margin to the distributor, and it remains constant across distribution platforms. What can be bundled and what cannot be bundled was also determined based on the fact whether you are Free to Air (FTA) or pay. So you had to first decide whether you are FTA or Pay and then if you are FTA then it will have zero cost. If you are pay then you decide the price, and you have to sell everybody at the same price so that everybody sells it to the customer at the same price,” Nagpal noted.

In June 2020, Star Utsav, Sony Pal, Colors Rishtey, and Zee Anmol had made a comeback to the DD Free Dish after exiting the platform in March 2019 to comply with the NTO. “Last year, we discovered that there were a bunch of channels which were part of our platform as pay channels with a specified MRP which we are charging to our customers. They were also part of broadcaster bundles. The same channels were appearing on DD Free Dish as free channels. Not only were they free to customers of DD Free Dish, but they were also paying Rs 10-12 crore per channel for getting those channels carried on the platform,” he added.

On 10th July, Tata Sky shot off a letter to the TRAI to mandate that any channel that is available on DD Free Dish be declared FTA. “We officially wrote to TRAI at that time and said that here are these 16 channels which are priced anywhere between 10 paise to Rs 3 on my platform, so please decide whether these are FTA or pay and then act accordingly. If they are FTA, they should be FTA on my platform also. I am not saying you make them pay or withdraw from DD Free Dish. If they want to be on DD Free Dish let them be on DD Free Dish we have no problems, but the treatment to customers should be the same,” Nagpal averred.

He noted that the TRAI has not taken any action even after a year has passed by since the DTH operator wrote to the regulator. “It's been over a year, but there has been no action and no notice has been issued to anybody. Today that list has gone up from 16 to 20. My only point is it is unfair to customers in the country if you have got a national tariff order whose objective is to create parity and transparency. This is not something that you need an audit for, as this is visible to everyone,” Nagpal added.

According to a TRAI official, there has been no change in the regulator's stance that DD Free Dish is not covered under the NTO since it is unencrypted. However, the official added that the issue is under active consideration of the TRAI. “As a regulator, we don't look at issues in a piecemeal manner. If and when we initiate a consultation on this matter, we will also look at the impact of OTT on the distribution sector. We want to look at things holistically. As things stand today, our view is that DD Free Dish doesn't come under the NTO framework,” the official stated.

According to a senior official with a top 3 DTH company, DD Free Dish has increased subscriber churn in the pay-TV market. More channels are getting attracted to DD Free Dish due to the platform's reach, which helps in ad revenue monetisation, he added.

“DD Free Dish today is available in 4.5-5 crore homes. Airtel, Tata Sky and Dish TV all three platforms have got impacted. Pay DTH operators are getting weaker due to DD Free Dish. Even cable operators have started to feel the heat from DD Free Dish. Then there is the challenge of OTT. The entire TV distribution ecosystem is getting impacted due to DD Free Dish and OTT platforms. Low data cost is also leading to higher churn among TV distribution platforms. Cord-cutting has become a reality,” the official said.

According to a senior lawyer in the TMT space, DD Free Dish has been envisaged as a free DPO from a consumer standpoint. He further stated that if a pay channel is available for free on another platform, then there can be an issue raised by a private DTH operator that they need parity. “But they are not saying that they are going to offer for free these channels to their subscribers. If they offer these channels to their subscribers and get a reach that broadcasters want because that's what gets them ad revenue, then it's a different matter. They are only complaining about one part that broadcasters are giving it for free, but they are not saying anything about the second and the most important part that public is getting it for free,” he added.

The lawyer stated that private DTH operators can challenge the decision of pay broadcasters on the basis of discrimination. “They have to challenge the action of the broadcaster that they are discriminating. More than the broadcasters, they have to challenge the action of Prasar Bharati to offer this for free,” he averred.

Offering a broadcasters' perspective, a senior official with a leading broadcasting company said that there is no law that prohibits channels from participating in the DD Free Dish auction and placing channels on the platform. He also said that the Pay TV broadcasters are cross-subsidising and offering content to DD Free Dish customers. Moreover, the pay channels that are also available on DD Free Dish are priced nominally even for pay platforms.

“Say a channel is priced at Rs 1, but we never get that Rs 1 because the channel is available as a bundled offering to distributors. Why are pay-TV operators making a big deal about it? If we make these channels FTA to ensure parity, there are two problems. 1) We will not be able to put FTA channels in bouquet because our other channels are pay; 2) If these channels become FTA then distribution platforms will put it in their base pack which is NCF + taxes. They are not going to share the NCF with us,” the official noted.

He also argued that the broadcasters are not getting subscription from DD Free Dish as the platform is not collecting anything from consumers. “Both the broadcaster and the operator are giving it for free. DD Free Dish doesn't collect Network Capacity Fee (NCF) whereas pay platforms collect NCF.”

Read more news about (internet advertising India, internet advertising, advertising India, digital advertising India, media advertising India)

For more updates, be socially connected with us on
Instagram, LinkedIn, Twitter, Facebook & Youtube