- Post merger of HITS-Cable TV biz, IMCL’s FY17 net loss swells to Rs 206 crore
- RIL Surges 4% After Telecom Regulator Slashes Interconnect Charges
- Mumbai Rains: 34 domestic flights cancelled till 12 pm today, main runway remains shut
- Tata Sons buys big chunk of shares in group firms
- Swine flu: 42 positive case in Mohali
- HIV blood transfusion probe: High-level team gives clean chit to Regional Cancer Centre
- Flipkart, Amazon in Rs100 crore ad blitz
- Politicians may have helped Iqbal Kaskar net 100 crore in 3 years
- Mobile bills to go down as Trai cuts call termination charges to 6 p/min
Broadcasters see red in TRAI’s new tariff order for commercial subs; MSOs & DTH ops happy
MUMBAI: Used to dealing directly with commercial establishments, broadcasters are not happy with the Telecom Regulatory Authority of India’s (TRAI) new tariff order amendment relating to commercial subscribers.
At present, broadcasters charge such establishments high premium. While it is still under-monetised, the overall revenue from the commercial establishments is pegged around Rs 150 crore (Rs 1.5 billion). Broadcasters’ overall subscription revenue was around Rs 5,500 crore (Rs 55 billion) in FY14.
However, the new tariff order has clarified that such commercial establishments have to be treated as normal (household) subscribers if they are providing television as an amenity (at no extra charge) to their guests/clients. Only when commercial subscribers charge their guests/clients for TV separately can there be a different tariff mutually agreed upon. But where the broadcasters are feeling the pinch the most is that all commercial subscribers can obtain TV services only from a distributor (MSO/DTH/HITS/IPTV) and not directly from the broadcaster.
Giving a broadcaster’s perspective, distribution company IndiaCast EVP Amit Arora said that the notification is like going two steps backwards. “World over, revenue from commercial establishments is a substantial revenue stream. While not all the broadcasters have been tapping the true potential, TRAI’s tariff order will have serious implications,” he said.
Arora added that even now, the deals between broadcasters and establishments are not on full occupancy and that hotels, etc., also negotiate the pricing. He admitted that the broadcasters will be weighing all the options.
Sports broadcasters could be particularly affected. Ten Sports CEO Rajesh Sethi said, “Our content costs are ever rising as the costs of sports rights are shooting through the roof. The regulator should have continued tariff forbearance and not removed it. A restaurant or a pub or a sports bar charges for overall ambience that they provide which includes television content, so why devoid sports broadcasters of that revenue? Sports content, in particular, is a key driver for hotels and pubs, and it enhances the overall experience.”
A senior executive of a leading network said that he was baffled with the tariff order as it leaves very little room for broadcasters to make money from the commercial segment. The tariff order, he said, will in all likelihood be challenged by the broadcasters individually as well as collectively by the Indian Broadcasting Foundation (IBF).
However, Dish TV CEO and DTH Operators Association president RC Venkateish finds the tariff order a step in the right direction. While he agrees that the gains will not be much as the DTH or MSOs will not be able to charge any premium, it certainly opens up the market. “This will open up the market for the DTH ops, especially in 3, 4 and 5 star hotels, where the broadcasters were used to put decoders themselves.”
Hathway Cable & Datacom MD and CEO Jagdish Kumar added, “It’s a very favourable tariff order for the MSOs. So far, there was confusion on who exactly is the contracting authority. This tariff order has clarified that position. The broadcasters have to provide signals to commercial subscribers through distribution platforms. We will do separate deals with the broadcasters for commercial and residential subscribers. We will also do deal with hotels.”
“The commercial segment has not been fully tapped. The MSOs have not given proper focus on this business segment. We are fully geared to explore opportunities in the commercial segment. We can provide good services to commercial establishments. In the digital market, we can offer them video on demand apart from linear TV service,” Kumar added.
Digicable MD and CEO Jagjit Kohli said, “I am happy and welcome the new tariff order. It will shift the balance of power from broadcasters to MSOs. Earlier, the problem was that we were not able to secure deals from the broadcasters unless we gave them their pound of flesh. Having said that, the commercial segment is currently very small and it hardly impacts the MSOs’ top line or bottom line. The tariff order is also good for the hotel industry.”