FTA broadcasters to get little help by delaying payment of Free Dish carriage fees
Industry sources say the ‘relief’ comes as a double whammy as broadcasters delaying payment of fees will have to pay interest both to the bank for the PBG & to the public broadcaster
DD Free Dish has accepted the broadcasters’ demand for a window to delay payment of carriage fees by three months but does that help the industry that is presently going through an all-time low? Perhaps not.
The News Broadcasters Federation (NBF) recently wrote to the Centre to waive off the carriage fees for a few months due to cash flow problems in the wake of the pandemic but instead got a delayed deadline that comes with an added cost.
The Free To Air channels were looking at 100% waiver of carriage fees for the first quarter and 50% for the second quarter. A look at the new plan may not really count as a relief.
Carriage fees for the month of March, April and May can now be paid by 27.6.2020. Broadcasters paying the carriage fees on the delayed date will have to pay the monthly installment along with applicable taxes and interest for one month at the rate of 5.7% annum and GST on the interest amount. Broadcasters would also have to furnish a monetary guarantee in the form of a Performance Bank Guarantee (PBG) to avail this facility of delayed payments.
“We now have to bear the burden of double interests if we delay payments - one to the bank for the PBG and other to the public broadcaster as fee for delayed payments. At a time when we are already in a financial crisis, this comes as a double whammy in the name of relief,” said a news broadcaster.
For instance, the carriage fees for a broadcaster who was paying 10% of (Total Bid price – Participation Fee) + applicable GST for 1st installment and applicable GST for participation fee will now have to be paid by 27.6.2020 against deposit of Bank Guarantee (BG) for the amount equivalent to 1st instalment, including GST, as communicated with the allotment letter plus simple interest for 3 months on 1st installment amount at the rate of 5.70 % per annum and GST on the interest amount. The BG valid up to 31.7.2020 is to be submitted to Prasar Bharati by 14.4.2020.
The weak market sentiment has been impacting every broadcaster as ad bills touch unprecedented lows. Broadcasters on DD Free Dish say they are not in a position to pay their monthly installment of carriage fees to Prasar Bharati. Some broadcasters also feel that the load should be shared by the public broadcaster.
According to them, the entire point of being on a FTA platform is to gain maximum ad revenue and if that purpose is not being served then why should one keep paying for the slot.
“DD should share the burden of losses as we are paying in crores for the slots to reach more people and monetize the platform accordingly. If monetization is not happening then there is no purpose to pay hefty carriage fees to DD,” said another broadcaster.
What is this carriage fee that broadcasters need to pay to the public broadcaster every month?
Every channel allotted slots in the 44th e-auction of MPEG-2 slots in consideration of the carriage of its channel by Prasar Bharati on “DD Free Dish” pays Prasar Bharati an annual carriage fee. The carriage fee is the successful bid amount divided into 12 equal monthly installments.
Those not in a position to pay the installments on time or on the delayed dates say the only way out now seems to be opting out of the platform.
“Ad revenues are at 20% of its usual levels and the shrinking top line has impacted our businesses heavily. We do not have the capacity to pay the carriage fees to DD as it runs in crores. As a result small broadcasters like us are forced to pull out of the free dish platform,” said a broadcaster in the regional space.
Sources close to the development have confirmed that at least 4 to 5 channels have dropped out of the platform due to cash crunch.
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