Festive discount: How much will it cost broadcasters?

Industry experts say the impact of the move will reflect in the next quarter result of the channels already suffering from loss in ad revenue due to economic slowdown

by Tasmayee Laha Roy
Published - Oct 21, 2019 8:42 AM Updated: Oct 21, 2019 10:03 AM

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Most of the major broadcasters, including Sony Pictures Networks India (SPN), Star TV, Zee Entertainment Enterprises Limited (ZEEL) and Viacom 18, have reduced a-la-carte prices of some of their channels by nearly 37 per cent in festive deals offered to customers. Though expected to bring in long-term gains, experts suggest these offers would burn a hole in broadcaster’s pocket with hefty loss in subscription revenue.

While it is not clear whether the offers are here to stay, the move can cost broadcasters lose subscription revenues to the tune of Rs 250 crore, suggest highly placed sources in the industry.

“Whether or not these offers bring back the viewers broadcasters lost to NTO (new tariff order), they are sure to cost them anywhere between Rs 200 crore and Rs 250 crore as loss in subscription revenue,” said an industry insider.

Just as the Telecom Regulatory Authority of India announced that it would review the current tariff order which was announced six months back, the broadcasters have gone ahead and dropped the subscription prices.

While broadcasters did not want to comment on the probable subscription losses the festive offers might bring, experts suggest calculating losses from the move is a no brainer.

“When the channels are giving subsidy to the tune of 35-40 per cent for each customer, it is clear that the subscription revenue is also going down by the same margin. Thanks to the downturn in economic situations, broadcasters are already at a loss of ad revenue and even the festive season didn’t bring in any cheer. Channels still have unsold ad inventory. These price drops as part of festive deal will now lead to losses in subscription revenues too,” said a media expert.

The losses will reflect on the next quarter results, say experts.

“A loss of Rs 250 crore doesn’t go unnoticed in the balancesheet. It will definitely reflect in the Q3 results of the entire broadcasters’ fraternity and will add to the cumulative losses the channels are already suffering in terms of ad revenues,” the expert added.

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