New tariff threat: Cable Industry’s united fight is the only solution

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Broadcasters are the biggest beneficiaries when the monthly cable tv subscription was forced to increases after digitization. The ultimate losers are the subscribers, LCOs and the MSOs. Operators had to convince the subscribers and install Set Top Boxes in each household while the MSOs had to install Digital Head-ends and subsidize STBs spending crores of rupees. They had to adopt new technology and softwares like CAS and SMS had to be put in place as part of the digitization. The LCOs had to persuade subscribers to the enhanced new billing. TRAI faced criticism after the first Tariff Order has burdened the subscribers heavily. Under such circumstances TRAI has given a second Tariff Order named as NTO 2.0. Interestingly, it has increased the burden instead of reducing it. Initially, it has brought down the revenue of the LCOs and MSOs by changing the number of channels to be offered for the basic NCF of Rs.130 plus tax from 100 to 200. Moreover, the Prasar Bharati channels numbering to 27 have also been separated, thus putting a burden of 227 channels on the LCOs. Moreover, the NCF for a second connection in a household was made to be offered for a mere 40% of the NCF. Ironically, such a condition was not mandated for the broadcasters and they continued to enjoy additional subscription from the second connection also without any discount. This has proved the dual standards of TRAI.

After an 18-month long fiasco, the broadcasters have come out with an implementation plan of NTO 2.0. While TRAI has been repeatedly telling that the NTO 2.0 is aimed at reducing the bill, the broadcasters have cleverly used the opportunity given by TRAI to put additional burden on the subscribers and pocket huge profits than before. TRAI laid down a condition that the channel price should not exceed Rs. 12 if it is offered as part of a bouquet. But what did the broadcasters do? Sony, Zee and Star channels, which have already announced prices, have brought their leader channel;s out of bouquet and enhanced their a la carte prices by 30 t0 35%.

Zee Telugu previously had a maximum retail price of Rs. 19 while Zee movies are priced at Rs.10. Since these are the two Zee Group channels in Telugu, they have been giving a total of 10 channels including 8 other language channels for Rs.20. But now the situation has changed. Zee Telugu a la carte price is Rs. 22 and as such made available separately. Zee movies can also be taken separately for Rs 4.50. So, these 2 channels can be availed at Rs. 26.50 or if the bouquet in which Zee Cinimalu is taken for Rs.5, the total cost would be Rs. 27. So in the past, the total amount paid by the Telugu audience for Zee Channel bouquet was Rs. 20 and now they are forced toshell down Rs. 27. This means that there is an increase of 35% in the bill of Zee Channels alone.

As for Star Maa channels are concerned, the price of the leader channel Star Maa has gone up from Rs. 19 to Rs 23 now. Star Maa movies used to be Rs 10 but now it has been increased to the maximum limit allowed and is made available at Rs.12. Also, Star Sports 1 Telugu has been increased to Rs.23. Previously, the total price of a Star Telugu package was Rs. 63 while the bouquet cost was Rs.39.. It included Maa Gold, Maa Movies, Maa Music, 4 sports channels, National Geographic, and NG World. If you want the same channels, now you have to pay a total of Rs. 87 including Star Maa (23), Star Sports 1 (23), Star Sports 2 (10), Star Sports 1 Telugu (19) and SVP Light Bouquet (12). That is, the price has now more than doubled. If one wants to reduce the burden considerably and take only Star Ma (23), Star Sports 1 Telugu (19) and SVP Lite (12), the bill will be Rs.54. This is an increase of Rs.15 or 38%.

ETV, Gemini and other channels are also going to follow the suit. The greed of the broadcaster seems to have no boundaries. The industry is already hit by digitization and the cable industry lost connectivity during the Corona period. It is now an additional burden to convince the people with extra monthly bill. The LCOs and MSOs will bear the brunt for the greediness of the broadcasters. This can lead to permanent losses if connections are reduced. The survival of the cable industry is becoming questionable due to aggressive marketing strategies of DTH operators who have deep pockets on the one hand and raising shift towards the OTT on the other.

The broadcasters themselves are running the OTT and damaging the MSO system that distributes linear TV by making the same programs available to the audience. We have a situation where the subscriptions are declining and there is a further decline now after this huge price escalation proposed by the broadcasters, there is every likelihood of further losing the customers.

Hence there is an urgency to react to the greed of the broadcasters. The time has come for the Cable Industry representatives to convene a meeting immediately and devise a strategy to deal with this situation. We need to discuss what TRAI said what happened in reality. There is every need to put pressure on TRAI to take corrective measures on one hand and to protest the broadcasters for the unwanted increase in the price of pay channels. Unless we act immediately and protect the cable industry from the impact of NTO 2.0, our very existence will be in question. The LCOs and MSOs of both the Telugu states have to come together and fight with right spirit. An urgent meeting is needed to work out a plan for the Joint Action. This is the time to think over and act immediately.

YoursM. Subhash ReddyMD,

Brightway Communications and President,

Telangana MSOs Federation

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