Industry welcomes MIB move to remove cable monopoly

Industry observers have said that the proposed guidelines for MSO modules by I&B Minister Manish Tewari will end the nuisance of cable monopoly, which adversely affects fair competition, pricing & quality of service

e4m by Abhinav Trivedi
Updated: Feb 11, 2014 9:14 AM
Industry welcomes MIB move to remove cable monopoly

Minister of Information and Broadcasting, Manish Tewari, has indicated that the Ministry is planning to issuing guidelines related to MSOs soon. While addressing the National Consultation on Women and Media in Delhi recently, Tewari said, “We have initiated a consultation process through TRAI. The Inter-Ministerial Committee has accepted the recommendations and we are in the process of issuing guidelines, which will ensure that no single entity has monopoly in so far as distribution of electronic media is concerned.”

If the guidelines, as recommended by the Minister, see the light of day then a single MSO holding a substantial control (above 50 per cent) over distribution in certain markets would be necessarily required to bring down its share within a year.

A single MSO controls mammoth share over distribution in markets such as Tamil Nadu, Andhra Pradesh, and Punjab. For instance, in Tamil Nadu, the distribution market is dominated by government-owned Arasu Cable. In 2013, TRAI had issued a consultation paper suggesting that there have been instances reported where monopolised markets have witnessed muscle-flexing and forced contracts, which affect a broadcaster or a content aggregator.

Industry reaction
On the whole, industry stakeholders have welcomed the idea of such guidelines.

Anup Chandrasekharan, Business Head, Suvarna TV told exchange4media, “I welcome such an initiative. This is good for the industry. There should be no Government control in distribution. Politically-owned distribution businesses or monopoly MSOs controlling most of the market have their own agenda which hamper growth. There are instances of penalising, harassing, and arm-twisting. There should be a free enterprise model followed on the ground as far as TV distribution is concerned.”

Single MSO dominant markets have always been a bone of contention for broadcasters. As per the TRAI consultation paper, monopoly MSOs not only arm-twist content aggregators, but also charge whopping amounts as carriage fees. However, as per the consultation paper, there have also been instances where content aggregators with a large bouquet of channels have also arm-twisted MSOs to enter into forced contracts.

Will the guidelines move the situation on the ground? Mohan Nair, CEO, Mathrubhumi TV felt, “The carriage fee demanded by monopoly market MSOs is exorbitant. I believe that news and music channels should be given a special consideration as their revenues are less as compared to GECs. Paying huge FTC charges is tough for smaller channels in the monopoly MSO markets as it affects the bottom line.”

Industry observers said that MSOs in certain markets have started demanding more carriage fee as opposed to earlier times due to increased costs post digitisation. They also allege that demanding more money as carriage is fine, but money should also return to broadcasters in the form of more subscription fees, which is not happening at the ground level. Also, single MSO dominated markets have muscle power and penetration in a market, which is an added advantage during negotiating and securing commercial terms from a content aggregator or a broadcaster.

Punit Pandey, Executive Vice President & Business Head, 9XM, whose channel 9XM Tashan caters to the market in Punjab, which is again dominated by a Government-owned MSO, said, “I would like to wait and watch. It would be too early to comment on guidelines which are only in the preparatory stage. However, I would also say that I have not faced any problem in Punjab while airing 9XM. Our channel is easily available in the market and there is no question of channel blockage by the MSO.”

Andhra Pradesh, too, has a substantial dominance of a single MSO controlling up to 80 per cent of the areas (Source: TRAI). Some observers also indicate that like a consumer redressal forum, there should be a broadcaster/ MSO forum, where the matters could be resolved without going to the authority or the court.

Giving the content aggregator’s point of view, Gaurav Gandhi, COO, IndiaCast said, “Absolute monopolies in any business are not good for the value chain, so a regulatory check is a good idea. But we need to see what the regulator and the Ministry finally come back with before we can reflect on the impact of this.”

A senior official with another national content aggregator said, “Guidelines have little impact. The effect is felt only when the authority starts taking action against the non-compliant offenders. By the time the guidelines are framed, there could be a change of guard at the Ministry. I welcome and appreciate the intent of the Minister, but it would depend completely on what the priority of the next I&B Minster would be. As of now, I don’t anticipate a change in the next six months.”

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