TRAI should maintain transparency and not get involved in pricing: Broadcasters

The Telecom Regulatory Authority of India (TRAI) should be involved in maintaining transparency in the broadcast sector rather than getting involved in the pricing mechanism. That’s what the broadcasters feel. According to a veteran broadcaster preferring anonymity, TRAI is not in a position to understand broadcasting and, in addition, understand what the broadcasters and consumers want.

“India is a price-sensitive market – we want everything to be free or at the cheapest, but at the same time, the best-in-class service. Since broadcast is a business-to-business arrangement, whereas DPOs are business-to-consumer arrangement, they have a direct contact on the ground. So, the DPO accuses broadcasters of launching channels which a subscriber doesn’t want,” he maintained.

According to him, the DPOs’ main grudge is that broadcasters are not only able to launch more channels, they also get advertising revenues. “So, in a nutshell it is a corporate rivalry, but unfortunately TRAI unnecessarily gives ears to the DPOs without understanding what’s best for the consumer and the larger creative eco-system. The success of OTT proves that without an overzealous regulator and fragmented/ unruly intermediary, the content creators are able to know the pulse of their audience and cater to their needs and tastes. Additionally, content and carriage are neatly differentiated with transparency and accountability.”

According to him, the need of the hour to save the broadcasting industry is to either create a separate regulatory body with a focus on copyright and IP proration or amend the TRAI Act to recruit members with knowledge of the creative/ broadcasting sector.

“Our country was working based on market forces; different markets have different pricing structures. People had a wider choice. Now you are restricting the choice, yet the consumer is having to pay more. It’s not making sense,” said another senior-level broadcasting executive.

He further said, “The whole value chain is getting affected. NTO is not serving the purpose. If you analyse the consumer behaviour in terms of making a la carte choice, how will the cable industry administer it? It will lead to a significant drain of people from subscription. The number of people subscribing to channels is falling, yet the cable prices are going up. So, how does it work?”

In this whole process, he explained, TRAI seems to have two objectives. One is to give consumers a choice. The second is to create some kind of a pricing mechanism to bring in transparency. These are the two objectives the regulator wanted.

So, the question is why should the pricing be regulated? Nobody should be regulating prices. “I think we should have a proper mechanism. The key issue is whether there is transparency as to how the pricing is being done. Are the number of subscribers being addressed? Is it easier to manage the whole customer relationship? There has to be proper addressability of the number of consumers. And the consumer should know what he is paying for – there are some a la carte prices, but I am getting at this rate. That mechanism should be there. What the consumer is paying and what the broadcaster is getting should be understood and be clear very well. That is very important,” he stressed.

A uniform pricing had never existed. The intent of TRAI is also not to create uniform pricing, because there is marketing. “And based on marketing, the prices will differ in various markets. I really don’t know how and who is benefitting,” the senior executive said.

TRAI has been doing it for the last several years. But it has not stabilised. “Since 2018, they have been trying to fix it, but it is not working. TRAI has tried to fix the pricing, but they have not succeeded. It’s better that they don’t do it. You put on regulations on transparency, rather than dictating how people should be selling in the market. There are different ways of looking at it. You spend more money on content. The ad potential will be low, but the subscription potential will be high. How people mix and match and drive that business model is very different,” the senior executive noted.

However, there are differing views as well. For instance, media consultant Shaji Mathews and former CEO of KCCL and VP at Star TV, finds little value in the broadcasters’ contention that TRAI lacks competence in regulating the industry. “There is little credence to that argument. Of course, when the television industry was brought under the ambit of TRAI almost two decades ago, it lacked the necessary expertise. But over the years, the authority studied the problems and issues that afflict the sector in due consultation with the stakeholders. And today, it is competent to handle the situation. Broadcasters are trying to buttress their case by putting forth this argument that TRAI is bereft of the necessary competency.”

He also differs with the argument that there is lack of transparency in the sector. “With digitisation in place now, there is transparency in the sector. These are not genuine arguments,” maintained Mathews.

According to him, “TV consumers will not need to cough up more post-implementation of NTO 2.0.” He felt that there won’t be any drastic change at the ground level, contrary to what the broadcasters propagate.

“Broadcasters may be able to sustain pay-TV revenue, but there will be a slight dip in ad revenue. To make up for the ad revenue loss, they will include some alternative channels in the bouquet. Indians watch cable TV because of the low price and the option to watch a lot of channels. People generally watch not more than 15 channels. So, why pay so much was TRAI’s argument. The status quo will remain. There will be a slight reduction in the number of channels consumers watch. That’s all,” Mathews opined.

He also rubbished the theory that there will be perceptible change – a large-scale migration – of TV consumers to OTT. “That just won’t happen. People will continue watching TV as there won’t be any remarkable change in cable pricing,” he affirmed.

He further said, “There won’t be any major impact on consumer pricing. DPOs, like in the past, will come up with the best-fit of channels for the consumers within the budget. When the price goes up, they offer a smaller number of high-priced channels and more of low-priced channels and vice versa.”

He also felt that post-NTO 2.0, there won’t be broadcasters’ pressure on DPOs like before. Adgully