TRAI fixes LCN row; Broadcasters happy, DPOs concerned

NTO 2.0 restricts DPOs from changing the LCN of channels. This will prevent DPOs from placing channels out of genre and negotiating money from broadcasters for 'correct placement'

e4m by Naziya Alvi Rahman
Updated: Jan 17, 2020 9:20 AM

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TV

Two weeks since it was announced, NTO 2.0 has taken the industry by storm. While for broadcasters it is a major disruption, it is expected to hit the Distribution Platform Operators also in a big way.

As per a particular clause of the New Tariff Order, DPOs have been directed to ensure that all the channels of a particular genre must be placed together and any change in position of a channel cannot take place without prior approval from TRAI. Broadcasters claim that change of LCN for any channel has a direct impact on its viewership.

They believe that the move is purely intended to help broadcasters who were being harassed by MSOs who would deliberately arrange the channels in a way that the viewership sees a dip and the broadcasters are forced to pay them a placement fee to put it in the right genre.

"The move will curb the malpractice by many DPOs to deliberately place a channel of a particular genre with other genres to reduce their viewership and then demand extra charges from the broadcasters to put it back in its genre. This amount was negotiable and operators will ask for any amount ranging from Rs 10 lac to 50 lac depending upon the popularity of the channel and how keen is the broadcaster to pay for the correct placement,” said one of the broadcasters who did not wish to be named.

Another broadcaster added that the clause will primarily protect the LCN level change which a DPO would make. "Earlier the position of law was that for a period of one year you can’t change it but after that, they were allowed to change. But now in NTO 2.0, they can’t change it without getting approval from TRAI. This will have a direct impact on the carriage fee that a DPO could have asked. They could have reciprocated by saying that I am changing the LCN if you do not pay the desired carriage fee. This amount sometimes used to go up to Rs 40 to 50 lac. Now, this has been capped at Rs 4 lac at max. So the move will do away with unfair negotiation advantage that the DPOs had,” explained a senior broadcaster.

Another distribution head with a broadcasting company highlighted how previously broadcasters had to strike a ‘placement deal’ with the DPOs else they will deliberately place a channel of a particular genre with other genres to reduce their viewership. “For instance, if I have a music channel, they will pick up my channel from that genre and mix it with news or GECs until I pay them a placement fee. Now they cannot harass us on this front,” he said.

However, DPOs on the other hand claim that in most cases they were using changing of LCN as a last resort when broadcasters delayed payments or defaulted it. “There are a few broadcasters who have this problem of not paying (carriage fee and other promotional deal amounts) on time. Moreover, this is our property. It is an asset we own and we should have the liberty to use it in whichever way we wish to. TRAI cannot micro-manage us at every level,” said the owner of a leading DPO. He further claimed that the association is considering reaching out to TRAI with its objections to the NTO 2 by next week. In case they do not get relief, they will consider legal options.

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