TRAI’s New TV Tariff Rules
The tariff order on broadcasting and cable services issued by the Telecom Regulatory Authority of India is set to become effective on February 1, giving the consumer the option to pay only for those channels she wants to watch. Under the scheme, there is also a maximum price for pay channels declared by the broadcaster, which is reported to TRAI, bringing about greater transparency. Each channel will be available on an a la carte basis.The effect is that the consumer’s subscription cost on a base package of 100 standard definition television channels is fixed in the form of a network capacity fee.And even within this group, there is freedom to choose channels, with a provision for appropriate revision for any pay channels.
Why led to such changes?
- Consumer did not have a choice. Broadcasters were pushing their bouquet of channels to consumers. This model is called push model wherein broadcaster offered no choice.
- Further, there were many conflicts between MSOs, DTH operators and LCOs. Thus, TDSAT asked the TRAI to design a framework where in consumer gets the choice with minimum litigation.
- This is a welcome move from a regime where combinations of free and pay channels were decided by distributors and broadcasters which did not reflect actual demand for individual channels.
- Distributors including cable and DTH platforms, and advertisers, should welcome the order, which strengthens price discovery and eliminates inflated claims of the subscriber base.
- When consumer choses channel wisely, price will come down.
- TRAI must have a enabling policy such that channels are not hit.
- TRAI must make pricing transparent for multi-room channels.
- In the competitive landscape of home entertainment, conventional TV must now compete on the strength of transparent pricing and better programming for subscription revenue growth and viewer time that attracts advertising.
- Industry data show that there are about 197 million homes in India with a TV set, and 100 million more homes without one represent scope for growth.
- This can be achieved through regulatory schemes that empower broadcasters and subscribers alike.
- TRAI has done well to put up a calculator on its website to help consumers calculate bills under the new regime before signing up for a package with the operator.
- The broadcast industry must welcome a new era that promises to remove distribution bottlenecks and empower consumers with choice.