Will broadcasters' gamble to keep GEC, sports out of bouquet pay off?
Consumers may eventually have to fork out more money for popular channels; experts think this could push some TV households to shift completely to the OTT side
Under NTO 2.0, the Telecom Regulatory Authority of India (TRAI) has reduced the MRP cap of channels to Rs 12 from Rs 19. This means that any channel priced above Rs 12 cannot be a part of a bouquet. Further, the sum of à la carte rates of a channel in a bouquet cannot be more than 1.5 times the bouquet price. This implies a bouquet discount cap of 33.33%. The broadcasters argue that these two conditions will have a huge impact on their business.
The TRAI has alleged that the broadcasters bundle 'non-popular' channels with driver channels by keeping the à la carte price of driver channels high. The regulator has also alleged that the broadcasters are offering huge discounts on bouquets. This, the TRAI avers, is forcing consumers to opt for bouquets.
By pricing their driver channels at almost double the MRP cap of Rs 12, the broadcasters have thrown the gauntlet at TRAI, which has been accusing them of 'unfair bundling'. In its counter-affidavit to the Supreme Court, the regulator had claimed that reducing MRP cap and introducing twin conditions (one of the conditions was struck down by the Bombay High Court) will ensure 'fair bundling'.
One of the biggest ramifications of this move by broadcasters is that the consumers will have to fork out more money for subscribing to popular channels. Earlier, the consumers were getting a number of mass as well as niche channels as part of a bouquet. According to the Indian Broadcasting and Digital Foundation (IBDF), almost 90% of the TV homes in the country get their dose of entertainment through bouquets. The Distribution Platforms Operators (DPOs) aggregate channels from different broadcasters and create different types of bouquets to cater to a diverse set of consumers across India.
The likely increase in monthly TV bills will become unaffordable for low-income households and might lead to a drop in the reach of certain channels. The price rise might also push a section of TV households to make a complete shift to over the top (OTT) platforms. The advent of 4G with Reliance Jio and the rise in digital content consumption has been giving sleepless nights to traditional distribution platforms like cable and direct to home (DTH).
By keeping their driver channels out of the bouquet, the broadcasters also risk losing their reach, which might impact their advertising revenues. The bouquets created by broadcasters will also become less attractive as they don't have the driver channels.
SPNI has kept the MRP of its GEC and sports channels above the TRAI mandated cap of Rs 12. It has priced its flagship Hindi GECs Sony Entertainment Television (SET) and Sony Sab at Rs 24 and Rs 23 respectively. English sports channels Sony Ten 1 and Sony Ten 2 have been priced at Rs 20 while Sony Six has an MRP of Rs 15.
ZEEL has kept the MRP of its popular entertainment channels like Zee TV, Zee Marathi, Zee Bangla, Zee Sarthak, Zee Telugu, and Zee Kannada above Rs 12. Accordingly, these channels will not be available in bouquets. Zee TV, Zee Telugu, and Zee Kannada have been priced at Rs 22 each while Zee Marathi and Zee Bangla have an MRP of Rs 25. Zee Sarthak is available for consumers at Rs 20.
Likewise, TV18, which owns a majority stake in Viacom18, has pulled Colors and Colors Kannada out of the bouquet by pricing both channels at Rs 21. The broadcaster has kept the price of its other channels below Rs 12.
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