Reinventing The TV Channels Distribution Model

Dawn of a new era is awaiting the TV broadcasting and distribution sector. After the Supreme Court’s verdict clearing the TRAI new tariff order along with Interconnection and Quality of Service issues ; brings the stakeholders to a platform to brainstorm and work out new models; which new newer, and innovative packaging and marketing of the choice to customers, genuinely.

Since the CAS of 2003 -2004 , which went to Courts and was implemented in four metros for a short while between 2007 to 2011 and the advent of Digital Addressable System regulations (DAS) in 2012, the digitalisation and addressability (meaning customer choice also) continued to pose a tricky situation for all heavyweight stakeholders: pay broadcasters and FTA broadcasters, the digital platforms of MOS, HITS, DTH, and the last mile owners (LMO/LCO).

So the policy maker on this subject, Telecom Regulatory Authority of India (TRAI), again took the policy-making on tariff, interconnect, and QoS into a detailed analysis by various consultations, open houses, and full analysis to give the new order in March 2017. But the industry is never satisfied: the bigger content groups seemed uneasy and troubled to go to Madras High Court, followed by their presence at the Supreme Court.

The concept was changing from a wholesale price given by manufacturers (in this case broadcasters) to distributors (DTH, MSOs, HITS) to an MRP price regime like any other industry, where the owner of the produce provides the MRP. Sounds simplistic… but this meant massive change in business models for a pay channel, FTA channel, distributors’ marketing and packaging abilities, and so on.

More than 15 months on now, implementation has got delayed. New date of implementation is on December 29. The industry watches with anxiety.

The three key objectives and motives of the policymaker for tariff and interconnect were-transparency, non- discrimination, and consumer choice.

It is an important and significant model for the Cable TV broadcasting and distribution sector as it paves the way for augmenting and strengthening consumer choice and also creating a level playing field for all the stakeholders. Consumers now stand to benefit hopefully significantly as the Tariff Order and Interconnection Regulations have several provisions to encourage transparency and promote the real benefits of TV content Distribution digitalization by enabling the consumers to pro-actively and economically select channels and packages, and plan for regional or niche contents of their own choice. 

For any content viewing, we now live in an era of almost endless possibilities. We are all familiar with the many ways in which TV and films can be viewed: online catch-up sites allow us to stream shows we may have missed, while subscription services serve up thousands of hours of content made up by increasing amounts of original commissions. Such changes illustrate a shift in the balance of power. Viewers have more control than ever before in the way they consume and create content. Does it mean soon content will become real king in TV viewing also.

Another key growth driver has been the growing demand from rural and regional markets, which is attracting the attention of both advertisers and content platforms. The growing rural media consumption has been highlighted by measurement providers such as Broadcast Audience Research Council (BARC) in TV and Indian Readership Survey (IRS) in print. Growing media penetration in these markets across TV, print, radio and digital has been supplemented by increased focus on mass and regional content aimed at increasing the monetisation of the audience. In the long term, these markets are expected to provide significant support for growth of the Indian M&E industry. TV markets continue to eye this pie.

India is the second largest television market in the world, with around 186 million pay TV households in 2017. Despite the growing number of OTT video services and viewers on alternative media, India will continue to have an increasing number of TV households, driven by the rising aspirational middle class, increasing GDP per capita, more pay TV channels, and digitization. However, what challenges the market, is the lack of pricing parity for Pay TV versus other services especially in rural India. This is likely to become lower with the new implementation and with choice. With these markets’ growth and under the new paradigm of tariff regulations, the TV distribution market will surely move in a direction of transparency and choice. Let the new dawn begin…