Trai NTO 2.0 Implementation Might Affect TV Segment Revenues

As per the reports of FICCI-EY 2020, TV Segment might see an impact of Rs 1,500 crore to Rs 2,000 Crore impact in revenues

Highlights
  • Trai NTO 2.0 is currently sub-judice
  • NTO 2.0 Provision might bring lost TV subscribers
  • OTT platform subscription has been increased

Trai has rolled out new tariff order with new provisions which was challenged by multiple broadcaster and federations. However, currently the NTO 2.0 has been sub-judice, and as per a new report by FICCI-EY 2020, it is estimated that the TV Segment revenues might take a hit of Rs 1,500 crore to Rs 2,000 crore. Trai in NTO 2.0 has announced specific provisions which might result in loss of Jobs. In brief, the decision of applying a cap on price discounts will create a scenario in which people will go for weaker and niche channels which would result in loss of jobs.

Reduced NCF Will Impact TV Revenues

As mentioned in the new NTO 2.0, Network Capacity Fee or NCF has been reduced for multi TV connections. Also, many DPO’s are already following the revised NCF fee stated in Trai NTO 2.0. However, as per reports, it is expected that the reduction in NCF fees will have an impact of Rs 500 crore in revenues. Apart from NCF fees, the reduction in pay channels that can be added in the bouquet from Rs 19 to Rs 12 will also lower the revenues.

NTO 2.0 Provision Will Increase TV Subscriptions

As per the estimates, it is expected that the provisions of NTO 2.0 will bring back lost TV subscription which the industry lost because of the older provisions. The latest provisions which include long term package discounts, reduction of NCF in Multi TV connections has lowered the price of TV subscription. So, the new provisions mentioned in the NTO 2.0 will become an aid in adding new TV subscribers.

OTT Platforms Subscribers Increased

As the provisions of new NTO 2.0 made the TV subscription more costly, OTT Platforms gained significant importance. As per reports, it is estimated that nearly three to four million subscribers shifted to OTT platforms as it was more affordable and had additional benefits for subscribers. Not only this, another primary reason which led to the reduction in the number of TV subscribers is the piracy of television programmes. It is estimated that it will nearly impact 10 million pay subscriptions. The report also estimated that by the end of 2022, Smart TV connections would reach 14 million in India.

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