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News channels to face the brunt as TRAI dilutes the role of content aggregators

MUMBAI: The big news broadcasters found shelter under the umbrella of content aggregators, which has given them greater ability to wring pay TV revenues for their channels from the multi-system operators (MSOs). But this comfort zone seems to have come under threat now, as the Telecom Regulatory Authority of India (TRAI) has disallowed the aggregators to bundle channels of more than one broadcaster.

News broadcasters such as NDTV, TV Today and Times Television Network will have to find their independent identity in the cable TV world. They can still go with the content aggregators but their channels cannot be sold on the back of bigger and more popular entertainment networks.

AlokZee Media Corporation Ltd (ZMCL) chief executive officer Alok Agarwal has expressed concerns about the impact the new regulation can have on news broadcasters. “Carriage may see an upward trend for the genre as a whole. But as a network, we are concerned more about the downward pressure on subscription revenues,” he told TelevisionPost.com.

ZMCL runs a clutch of regional-language news channels with Zee News as its flagship property. The ZMCL channels are distributed by MediaPro Enterprise India, an equal joint venture between Zee-Turner and Star Den.

Times Television Network MD and CEO MK Anand believes that the content aggregators’ regulation certainly tilts the balance of power in favour of the MSOs. But he also opines that the shift in power will impact smaller and niche broadcasters more than anybody else.

M-K-Anand“The unbundling of channels will help MSOs to manoeuvre for short-term gains. They will use it as negotiation tactics for broadcasters. It will impact smaller broadcasters more as they don’t have the negotiating power. But it won’t have a lasting impact,” averred Anand.

Anand asserts that carriage fee will not see an upsurge as the bandwidth constraints no longer exist in the digital ecosystem. MSOs also need content to compete with direct-to-home (DTH) operators. Hence, broadcasters who have quality content will not face the issue of carriage fee.

“The fundamental problem of bandwidth that existed in analogue cable is not there anymore as digital cable is capable of carrying up to 500 channels. At the end of the day, the MSOs also need to provide good service to protect their subscribers from switching to DTH,” he stated.

The Times Television Network channels, including Times Now and ET Now, are distributed by MSM Discovery. The content aggregator pays Times Television Network a minimum guaranteed amount.

Rohit Jaiswal NDTVNDTV AVP of network distribution and affiliate sales Rohit Jaiswal believes that the impact will be less on carriage while the popular channels will have no issues regarding subscription revenue.

“There is scope for English news channels, both general and business, to grow subscription revenues. The Hindi news channels may have a problem with carriage. But since most of them are free-to-air (FTA), there is in any case no subscription income for them,” he said.

The FTA news channels will be hard put to go pay without the support of the content aggregators. “If we had decided to go pay, we would have aligned with a content aggregator. Though we are a popular Hindi news channel and had plans of going pay, it would be difficult in the new scenario,” a senior executive of a leading Hindi news channel said on condition of anonymity.

Some industry analysts believe that carriage will see an upward pressure. “Hindi news channels depend highly on ratings and it is a very competitive market. Carriage and placement become important,” said an analyst at a broking firm.

There is also an opposite swing of opinion. “Carriage will be impacted in a minor way. “Broadcasters like NDTV, TV Today and Times Television Network, in any case, have been handling the placement themselves. Only the distribution deals were handled by content aggregators,” some industry watchers said.

The head of a regional news channel feels that the unbundling of channels will help smaller broadcasters as weak channels that piggybacked on content aggregators will not have the safety net of being bundled with strong channels.

“The content aggregators’ regulation should reduce the burden of carriage fee on small broadcasters. Carriage fee will now be spread. The weaker channels that were part of the bouquets of the content aggregators will also have to fork out carriage fees,” he said.

Also Read:

MSOs expect content costs to ease and carriage to climb
TRAI’s logic in guarding non-vertically integrated MSOs against content aggregators
Why content aggregators caught the eye of TRAI
How TRAI’s content aggregators’ regulation can shift the balance of power
TRAI issues regulations for content aggregators