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With IPL in its kitty, Star hikes distribution tariff

03-April-2018
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With IPL in its kitty, Star hikes distribution tariff

Ahead of Indian Premier League (IPL) Star India has asked the distribution platforms for a raise in the annual distribution deal. The channel is asking for a minimum 20 per cent raise in the deals. According to industry sources, Star India initially started with 40 percent hike, which differs for various operators.

Arvind Prabhu, President, Maharashtra Cable Operators Foundation, said, “The hike, that Star is asking for is different for various operators. Hence, I can’t comment on that. They are asking for minimum 20 per cent hike for the annual deals.”

Star India has around 60+ channels with a strong presence in regional markets. Also this time, Star has an exhaustive telecast plan comprising of six languages across 12 channels. 

“We have negotiated, settled and signed our annual agreement with Star TV at a mutually acceptable value. With this agreement in place, we would focus on delivering high-quality content and service to the customers. Star is a popular bouquet of channels with compelling content. It becomes more important now with IPL as a part of their offering. Hence, it is natural that they have growth expectations. But, at the same time, it is of paramount importance for both the broadcaster and DPOs to mutually settle and go together to consumers than fighting with each other as we often see in the industry,” said Bibhu Prasad Rath, President and CEO, Ortel Communications Ltd, which signed the deal in January. 

Though it is not a new phenomenon, whenever a broadcaster acquires any new property or new content, they ask for a raise in the deals. Also, the deals depend on the yearly cycle. For Star, it is July to June. “There are a couple of issues from the distribution side. Already most of the DTH or MSO distribution companies, which are at the corporate level, are already paying much more than they can take from the customer. For Star India, the year ending is from July to June, so most of the agreements are placed in that time period. I don’t think they can suddenly ask for a raise in the middle of an agreement, but in some cases, where the agreement with MSOs or DTH operators is not clear, they can,” said an industry expert.

Dish TV CEO Jawahar Goel told the news agency that Star has been asking for around 20-40 per cent increase in fees for its channels. Also, they are not disclosing on which channels the IPL will be telecast.

Another MSO signed the deal with Star India at a 15 per cent hike and said, “Normally every year, each broadcaster renews the agreement and asks for the growth and Star is an important bouquet for any DPO. Since IPL is with Star, the expectation is to get more money. Apart from Hindi, English and Sports, they are also quite strong in the regional bouquet. And on the top of that, they have got IPL which is the most exciting sports event. People will negotiate and bargain according to what is best possible for them, but if Star is stuck at 40 per cent, no one will give that much. But in range of 10-20 per cent, they will agree,” said Goel.

He said, “It is not just DPOs that are under pressure. Star is also under pressure to get all that money and obviously they will try to extract what is best possible for them. It is not in Star’s interest to cut off relations over this.”

A few weeks ago, the rift between the DTH operator Airtel and Star took an ugly turn when Star posted a video urging viewers to switch to the different cable/DTH operator. On April 2, both the parties agreed to mutual terms and renewed the deal. Now Airtel Digital subscribers will continue to get uninterrupted access to all of Star’s programmes, including Vivo IPL.

On March 13, the apex court referred the matter involving Star India and the Telecom Regulatory Authority of India (TRAI) back to the Madras High Court instructing it to deliver a judgement within a month. This comes a week after the Madras High Court gave a split verdict on March 2, followed by a review petition in the Supreme Court by TRAI.

Prabhu further added, “The sentiment in the industry is very bad. We all were waiting for the tariff order and if the tariff order comes, then it's a level playing field for everybody. Unfortunately, the matter is still in the court and the decision has not come yet. Any hike in this current scenario is not affordable for the cable operators mainly because ARPUs are not increasing.”

We tried to reach out to Star India for an official comment but didn't get any response.

Tags Airtel Digital DTH operator Star India Network IPL 2018 Arvind Prabhu Bibhu Rath Ortel Communication

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