The new Trai tariff regime changes are all the news that are making the headlines in the DTH industry. These new rules change some of the fundamental ways in which the channels were being priced. These new rules also bring some caps on the discounts which were being offered to the consumers on the channel packs. Also, the new amendments change the way multi TV serviced being priced for the subscribers. However, there is one area where the Trai new DTH rules might not provide similar positive effect as the rules are providing to the consumers, and these include the big broadcasters. On Friday, many broadcasters raised the issue in unison saying that the new regulations put forth by Trai will put many channels out of business. The television broadcasters also criticised the new rules. The broadcasters which were present to brief the media included major names like Walt Disney Co, Star India, ZEEL and many other major names. These broadcasters also remarked that excessive regulations in the industry would also cripple the companies in a manner such that it would be hinder innovation and technological advancements as well.
New Rules to Hurt Broadcasters
N.P. Singh, the Managing Director and CEO for Sony Pictures Networks India, one of the leading broadcasters in India, said about this, “We’re evaluating how we can challenge this.” As per the research arm of the ICRA ratings agency, the new Trai DTH rule changes will come into effect on March 1 and will reduce the bills of the consumers. However, this would happen at the cost of revenue and profitability of the broadcasters. It is worth noting that the new rules have allowed the subscribers to enjoy 200 channels in the base NCF (Network Capacity Fee) of Rs 130. To recall, previously, this channel limit was set at only 100 SD channels.
Broadcasters Facing Competition from OTT
As per the senior executives of the Indian television industry, the regulations will further pinch the TV industry which is already facing some major competition from the OTT services like Netflix and Amazon Prime which is eating into the revenue pie of the DTH services and cable TV services. Star India Chairman, Uday Shankar, told the media, “The long term effects of this are going to be extremely destructive. I don’t see a case of existence for the smaller channels … most of them will have to shut shop.”
New Rules Bring New Problems in Industry
It is worth noting that the changes to the Trai tariff regime have been made in less than a year from when they were launched last year. However, soon after the implementation of the new Trai tariff regime, it had become clear that the new rules had increased the monthly rentals of the DTH subscribers and the cable TV subscribers. The new rules surely brought transparency into the industry, but they also increased the prices of the channels, as they were now shipping individually instead of in packs. This allowed the subscribers to make fair choices about what they wanted to watch and eventually pay for that only. However, the prices increased for the majority of subscribers by 25%, thus forcing Trai to work towards the amendment of these rules. After a lot of deliberation, consultation papers, and an Open House discussion, Trai decided to make changes to the NCF policy, the discount cap on channel packs, and some other regulations which were laid down in the Trai tariff regime.