Dilip Bhuyan, COO, Eastern Media Ltd.
The new tariff order has been announced, and should be effective within a couple of months. At the outset, for a normal individual it is a herculean task to go through the entire order, analyze its implications on various stakeholders of the media distribution industry and how to act, i.e., where to take an initiative and where to keep mum.
It would be wrong to presume that TRAI can really devise a method where the broadcasters, MSOs, LCOs, and also viewers, would be happy at the same time.
Let us look at various market assumptions that come out of various quarters as follows.
Assumption-1: Lonely Channels Suffer More
MSOs/operators might have better bargain power, resulting in demanding more carriage fees from channels with low subscription or low mass viewing demand. MSOs keep paying for only the top-line prime viewed channels and may neglect or not pay for the rest non-prime channels. Carriage fees might be the driving factor to run these channels. Since channels thrive on advertising revenue, which is directly proportional to reach or BARC ratings, many of them may fall prey to paying carriage fees (Indirectly, if not directly). Broadcasters with bouquet of channels might safeguard their interests, but single flagship channels could be in trouble.
Assumption-2: More Dependency on FTAs
There are many FTAs at national and regional levels. MSOs might choke their bandwidth with more free-to-air channels for minimizing trouble during probable fight with some prime channels in future.
Assumption-3: Uniform Pricing
The order has recommended uniform pricing across geographies. It does not discriminate buying levels or urban/rural standards. When a broadcaster charges without any consideration to buying powers, poor will be forced to have lesser number of channels and the rich will always have all the channels, thus continuing the difference between rich and poor in this segment too.
Assumption-4: Smiling Small Local MSOs
Till date, nationally present MSOs had the hunger to activate STMs at any desired place and to pose a threat to the locally present MSOs/LCOs. Even activating remote mini-headends has been the latest trend to arrest recurring expenses or to reach the unreachable. Hence surviving the strongest was the slogan. Now if really there would not be much difference in buying costs of content by MSOs (by their size), or there is little difference, then a smaller MSO can survive, provided they provide standard quality services. The little extra discount availed by the big MSOs will anyway be consumed by their high-profile team of professionals, additional establishment costs, and STM rentals.