Broadcasters worry new TRAI order on Free Dish channels will hurt business

Television broadcasters are concerned about the fallout of a recent directive that the Telecom Regulatory Authority of India, or Trai, has issued for broadcasting and cable services.

In a notification, the authority has said that an otherwise pay channel available for free on DD Free Dish, the direct-to-home platform owned by public broadcaster Prasar Bharati, must be declared free-to-air on other distribution platforms (such as Tata Play, Dish TV etc.) as well, so as to ensure a level-playing field.

Such a mandate, experts argue, could hurt the revenues and reach of TV channels at a time when they are already offering their content at nominal rates across the pay TV universe.

Besides, Prasar Bharati doesn’t fall under the regulatory ambit of Trai, they added.

“Mandating pay channels to be free-to-air across all platforms may directly impact broadcasters’ subscription revenues, potentially reducing their ability to generate income from these channels. Broadcasters may need to pivot towards alternative revenue streams such as increased advertising, as the direct subscription model for impacted channels becomes less viable,” Ayan Sharma, head of public policy and advocacy at law firm BTG Advaya, said.

The combined impact of Trai amendments and the draft broadcast regulation bill (which seeks to regulate broadcasting services including OTT content and digital news) could potentially be a concern as increased regulatory scrutiny and compliance requirements may strain operational flexibility and resources, Sharma added.

A senior executive at a broadcast network called this a bizarre decision attempted to please distribution platforms. “Private broadcasters are a soft target. Only when there is forbearance at all levels, will the consumer benefit,” the executive said. He was referring to the fact that on one hand, the network capacity fee, which is a rental fee charged by distributors, has been tweaked to account for factors such as the number of channels, different regions, customer classes or any combination thereof. On the other, challenges for broadcasters are mounting.

Broadcasting Amendments
The recent amendments notified by Trai on the broadcasting and cable services framework present significant challenges for broadcasters, agreed Ameet Datta, partner, Saikrishna & Associates, a legal firm. “This could lead to substantial revenue losses and market distortion as broadcasters will be forced to provide premium content for free, undermining their ability to monetize effectively. Additionally, these amendments seem to favour distribution platforms and cable operators by allowing them access to premium content without carriage fees, increasing their viewership and advertising revenues while diminishing the bargaining power of broadcasters,” Datta pointed out.

Considering how these channels were a constant revenue stream for broadcasters, it is safe to say that broadcaster revenues would take a hit, Alpana Srivastava, partner, Desai & Diwanji, a legal firm, said. “Regardless of that, it is also pertinent to note that such moves are necessary owing to the current over-the-top (OTT) media domination in the market and the race for the revival of the satellite TV market. The OTT industry has had wide implications on the numbers that the satellite television industry used to rake in at some point, and these amendments have been put in place with the sole aim of bringing the present statistics back to something that mirror those of the pre-OTT days,” Srivastava argued. This move will affect around 20 of the 70-plus channels available on DD Free Dish, she said.

Pritha Jha, partner, Pioneer Legal, also emphasized that the changes that have been brought in have been a result of significant outcry in the industry that OTTs and free dish operators have fewer restrictions and therefore an unfair advantage over cable operators. “The amendments have been brought in to try and level the playing field. If a free channel is declared free to air by the broadcaster, all distribution platforms then become equal. A consumer no longer selects a distribution platform over the other because the charges in one place are nil,” Jha said.

She added that it has become evident over the last few years that cable TV is dying, and therefore these changes may be too little too late. “The average consumer in the urban population has already moved on. In rural India, though, where there is still significant penetration of cable TV, this should have a positive impact,” Jha said. LiveMint