Indian broadcasters attack pay-television price caps

Indian television broadcasters have united to criticise new price caps on pay-television channels introduced by the country’s media regulator, the Telecom Regulatory Authority of India (TRAI).

In an unusual move, executives from the country’s major broadcasters shared a stage at a press conference run by industry lobby group the Indian Broadcasting Federation, to express their concern at the regulations. The Economic Times reported that the broadcasters said the rules would damage investment in content, jobs and growth.

From January 1, the TRAI has reduced the maximum price that can be charged to consumers for accessing a single channel to Rs12 (€0.15/$0.17) per month, down from Rs19. It also capped at 33 per cent the discounts that pay-television operators can offer on individual channel prices when they are sold in bundles.

The Economic Times reported that Megha Tata, the managing director of South Asia at Discovery Communications India, said the “future of the sector is in jeopardy with such micro-regulation”. Star India chairman Uday Shankar said the moves would lead to reduced investments in content and the closure of smaller channels.

The new rules are a follow-up to the introduction by the TRAI last year of a new regulatory regime governing pay-television. Historically, Indian cable and satellite platforms sold subscribers a single, large bundle of about 250 channels and paid broadcasters a fixed fee per subscriber.

Under the new regime, platforms must allow customers to choose the channels they want in their bundle, à la carte, although platforms and broadcasters are also still allowed to create and sell channel bundles. Broadcasters must identify a price at which their channels are sold on an à la carte basis – this is the price now capped at Rs12 per month. Platforms and broadcasters are allowed to discount this price when channels are bundled, giving them a better opportunity to sell less popular channels – this is the discount now capped at 33 per cent.

The Economic Times reported that NP Singh, head of broadcaster Sony Pictures Networks India and president of broadcaster representative body the Indian Broadcasting Federation, said: “We want a stable and consistent regulatory regime for us to strategise better”, pointed out the TRAI has produced 36 ‘tariff orders’ in the last 15 years, and said that some appeared to be “arbitrary” and made without the backing of data or consumer research.

He said the industry had supported last year’s regulations, despite it resulting in the loss of 12 million subscribers and costing Rs1,000 crore ($141m) in ‘stakeholder education efforts’.

Sudhanshu Vats, managing director and group chief executive of Viacom18, and vice-president of the IBF, said: “You can’t keep making frequent change. From 2003, our rates have grown less than half of the rate of inflation.”

The Economic Times reported that broadcasters were exploring taking legal action against the new rules.