TRAI should move towards price deregulation of TV channels

Broadcasters have urged the Telecom Regulatory Authority of India (TRAI) not to prescribe a ceiling price for a channel to be included in a bouquet. It has also said that broadcasters and distributor platforms should be free to offer discounts on both a-la-carte and bouquet offerings.

The leading broadcasters’ industry body, the Indian Broadcasters and Digital Foundation (IBDF) submitted its recommendations in response to a consultation paper floated by the telecom and broadcast regulator, to address issues relating to the implementation of the New Tariff Order (NT02.0) in the broadcast sector.

TRAI earlier prescribed a price cap of Rs 12 on TV channels if they were offered as part of a bouquet under NTO 2.0. But this led broadcasters to hike prices of their popular TV channels and kept their popular channels, such as sports channels, out of the bouquets

Stressing on the need for a “forbearance model” and price “deregulation”, IBDF has said that a-la-carte and bouquets are different kinds of offerings catering to different target audiences and bundling is a globally acceptable business practice, which would be adversely affected by price ceilings.

“It is reiterated that market forces of demand and supply are the best parameters for determining prices of channels, and broadcasters seeking to ensure the highest market penetration will be incentivised to invest in high quality content and to price the same competitively. Market forces will also ensure that these prices remain stable,” it added.

On restrictions on bouquet discounts, IBDA said, “There should be no ceiling on the discount on sum of á-la-carte prices of channels forming part of bouquet.” It added that a majority of Indian TV households prefer bouquets over a-la-carte channels due to convenience and to cater to the diverse needs of the family. It also argued that while a-la-carte is a subscription-led proposition, bouquet is an advertising-led proposition.

It also stressed that channel prices in a bouquet cannot be homogeneous as that would “forcefully try to equalise the price of each channel “and defeat the very objective of bundling channels. IBDF also said there should be no cap on the discount that broadcasters offer to MSOs and DTH operators on the MRP of a-la-carte and bouquets.

The News Broadcasters and Digital Association said the nature and price of a channel and bouquets depends on market forces. “Discounting of bouquet rates, which used to hover around 80-90 per cent, have fallen drastically post implementation of NTO-1. This itself shows that demand and supply influence the pricing of services, and consequently, no regulatory intervention or prescription is required,” it added.

Meawhile, the DTH Operators’ Association also made a case for scrapping the price ceiling and said that forbearance is the need of the hour. “The current NTO framework laid down by TRAI is complex and poses limitations which restrict the operators, while causing inconvenience to the consumers in addition to the burden of higher prices. The Authority should allow the DPOs to price and package their own plans/ bouquets without any restrictions in order to meet the demands of the subscribers, as was the case prior to introduction of the NTO regime,” the industry body added. The Hindu BusinessLine