NTO 2.0: Brace for another round of disruption, say broadcasters

Industry heads say the new TRAI amendments come when the ecosystem had just settled down and this will lead to more confusion and slowdown in the business

e4m by Sonam Saini
Published: Jan 6, 2020 8:54 AM  | 3 min read

The broadcasting industry has expressed disappointment on the amended tariff order by TRAI that came as a shocker for many right at the beginning of this year.

On January 1, 2020, the Telecom Regulatory Authority of India (TRAI) issued an amendment to the tariff order and interconnection regulations. The new amendments have reduced the cap on the MRP of individual channels from Rs 19 to Rs 12 per month. The channels can also form part of any bouquet now.

The regulatory body has not cited any reason for reducing the cap, thus making the change totally arbitrary, say experts.

TRAI has also sought to impose twin conditions for bouquet formation, effectively introducing a cap on bouquet pricing which was left untouched in the earlier NTO.

Industry experts are of the opinion that while TRAI claims the amendments are in the consumers’ interest, it appears to have conveniently forsworn the interest of broadcasters. This change will only benefit the DPOs as they have been allowed to charge as much as Rs 160 for the channels that are supposed to be ‘FREE’, they said.

NTO 2.0 comes less than a year after TRAI imposed the New Tariff order. Even at that time, the industry witnessed a sharp decline, not only in viewership numbers but also in the ad revenues, said one of the senior broadcast executives on the condition of anonymity.

“TRAI said that the amendments are expected to result in healthier and structured growth and will give more choices to the customer. In today's scenario where almost all the industries are facing problems with the economic slowdown, how will this revised tariff order benefit the industry? It will also lead to a lot of confusion among the customers,” he said.

Another executive said NTO 2.0 comes when consumers had just recovered from last year’s confusion. Even the broadcast industry had just figured the trend and things had started to settle down when TRAI decided to up with another order. What was the urgency for this new tariff order, he asked.

Some senior analysts say TRAI’s recent move will have a negative impact on the industry and some genres which were impacted by NTO last year will be in bigger trouble. Also, this tariff order will force a lot of channels to shut down, leading to unemployment in the sector.

While the government is looking at ramping up growth, these changes will have the opposite effect on the broadcast sector that was just recovering from the twin shocks of NTO and the slowdown in the advertising business, the analysts further said.

Post NTO, the ecosystem had just settled down with about 200 million consumers finally deciding on their favourite channels.
The Indian Broadcasting Foundation (IBF) issued an official statement on Saturday, saying that the new announcement from TRAI will lead to disruption in the distribution ecosystem. The amendments will severely impair broadcasters’ ability to compete with other unregulated platforms and adversely affect the viability of the pay TV industry, the statement said.

It also mentioned that in the last 15 years of regulating the broadcast sector TRAI has issued more than 36 tariff orders and ancillary regulations in an attempt to micro-manage what is arguably the cheapest form of news and entertainment in the world. This goes contrary to the government's stated position of ensuring "ease of doing business", the foundation has said.

According to IBF, over-regulation, inconsistency and frequent changes in regulations by the regulator have already cost the broadcast sector 10 to 12 million TV subscribers if various industry estimates in 2019 are taken into account. These amendments will compound the problem further, it said.

Meanwhile, some of the major broadcasters have published the Reference Interconnect Offers (RIOs) with launch of new channels and bouquet rates that will be effective from February 1.

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