Will the MRP Era Force Pay Broadcasters To Go Free?

The cable TV market had not entered into the MRP era, while I was writing this.

It is for sure that, the cable TV market is going to experience a drastically different way of working. There are many assumptions by industry experts, MSOs, broadcasters, LCOs, and maybe TRAI itself. That is the very reason, why MSOs must be peeping into each other’s websites, just to take a reference from how the channels’ MRP packaging is being done by their competitors.

TRAI has prescribed everything about what to do, what not to do, what to write, what to read etc., the list is so long. MSOs are tired of flipping the pages of even more. At this moment, MSOs are even privately talking to arch rivals about each other’s moves. LCOs in many places have joined hands in raising their voice against implementation of the new tariff order.

The MRP tsunami in whatever shape is going to hit the market in January 2019, if the authorities do not give some breathing time.

While all the stakeholders in the ground seem to be confused and worried, there is another stakeholder who must be even worried – the broadcasters. Some may feel that broadcasters would be happy about securing substantial ground revenue.

But the crack in their happiness was first visible when the major broadcast distribution houses like Zee, Indiacast, and Sony decreased their channel bouquet prices one-by-one. The objective was to secure maximum possible number of eyeballs in the network of MSOs.

Till date, MSOs indulged in a cut throat price war with never ending aspirations of seeding more and more boxes. Now it seems, broadcasters will be the new warriors in the price battlefield. As understood, the promotional budgets are varying from 20–35 percent.

Recently, a broadcaster openly declared a discount of 70 percent. All this happened just a month before the targeted date of MRP implementation. It is very possible that more packages will be unravelled in the near future by the pay broadcasters.

But here is the catch. As is common knowledge, on an average only 20–25 percent revenue of pay broadcasters come from ground and rest comes from advertisement. If they do not lessen their hunger for ground revenue, then many channels will not feature in economic and popular packages of the MSOs, which constitute a major percentage of the viewers base in Tier-II, III, and IV locations.

In such cases, many channels might not reach desired eyeballs leading to lower channel viewing ratings. Eventually, the advertisement revenue will suffer, which will be a blow below the belt for them.

If the current situation persists, then not-too-popular pay broadcasters will have to forgo the ground revenue to a large extent. If they keep on changing a pure sales approach, some channels might face extinction in the long run. It is also believed that some channels may come out from the pay tag and declare themselves as free. Not only that, they might also woo and request the MSOs to include them in the basic packages.

Aggressive channels will straightway come down to ground with marcom activities with help of event organisers. We might even come across a drawing competition at some school by a kids’ channel with something like Chhota Bheem or Motu Patlu logo on the drawing sheets!