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Customer is king with TRAI’s equitable tariff order
In the wake of telecom regulator TRAI’s new tariff order, every broadcaster/Direct to Home (DTH) operator has to offer its channels either free of cost or at a minimal price to the customers, who will receive 100 free to air (FTA) channels for Rs 130 and can subscribe to select pay channels at an additional cost.
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migrator
migrator
Chennai
The move, which will be enforced by the month end, is being seen by industry stakeholders as a shift towards a thoroughly consumer-driven TV market. Coupled with the threat of OTT players like Netflix and Amazon luring more millennials away from the tube, service providers will be forced to look at alternatives to keep their subscriber base intact.
In December 2018, TRAI had offered time till January 31 for consumers to opt for channels of their choice under the new framework for broadcasting and cable services. Accordingly, distribution platform operators (DPOs) were permitted to seek options from consumers till January 31 and customers will be migrated as per their choice from February 1. As per TRAI statistics, about 80 pc customers watch less than 40 channels out of the 200 or so offered to them. Only about 15 pc customers are likely to watch more than 100 channels.
Dwelling on the implication of this new directive, Megha Tata, COO, Business Television of India (BTVI), said, “Whilst content continues to be king, consumer will be god. With the consumers getting more power to pay for only what they want to watch, all TV companies will have to focus on creating superlative content to woo viewers. They will consistently have to deliver quality content to retain their viewers without assuming long-term loyalty.”
Prathyusha Agarwal, CMO, Zee Entertainment Enterprises Limited (ZEEL), also believes the new pricing paradigm is a transformational structural reform beneficial not just for broadcasters but will also go a long way in strengthening the sector with the creation of a uniform pricing model, power of choice with consumers, along with greater transparency and efficiency. “The greater transparency will give us visibility into what consumers are purchasing and help build deeper understanding and analytics on consumer content and channel preferences,” she noted.
Most customers of DTH platforms had no real choice until last year, to opt for packages or channels they really wanted to see. And from a consumer perspective, this was a downer. Radhakrishnan Ramachandran, Founder, Studio Mojo, an intermediary between content developers and Over the Top (OTT) video platforms, believes that DTH subscription rates in India are already lower compared to anywhere else in the world. “But with the millennials moving towards OTT platforms, there is already an anxiety among DTH operators, with respect to how it would affect their revenues. These operators now must increase the spends on content and content strategy.”
For pay channels, quality content and the right pricing equals viewership and revenues. For FTA (Free to Air) channels, the equation changes to quality content equals viewership and revenues. And content strategy is what will drive growth in the coming days. On how broadcasters will be impacted, Tata remarked, “Whoever delivers quality content at the right price will walk away with the viewership and revenues in the new regime. As far as FTA channels like BTVI are concerned, being FTA will help us garner more reach in the short term.”
The tariff order comes in with the primary motive of ‘One Price for All’ and uniformity, transparency and pricing parity across service providers for all consumers across the country. Agarwal opines that the new tariff makes this space an open-market operation where one will have demand-led pricing on the channels, which will then become a virtuous cycle.
From a consumer stand point it might be difficult to generalise if everyone will end up paying a considerably lesser amount as subscription fees or usage fees. “This depends on what channels an individual viewer subscribes to. If he/she decides to subscribe to only FTA channels, they will end up paying Rs 130 + usage fees. If they decide to subscribe to a pack of pay channels from a single broadcaster of its choice, they will pay that much extra. However, viewers will pay only for what they want to watch,” Tata sums up.
Key Changes in new framework
- Consumers can select and pay only for the channels they wish to view. TV broadcasters must disclose the maximum retail price (MRP) of each channel and that of bouquets
- Service providers must offer a basic package of 100 free-to-air (FTA) channels at a base price. The ceiling limit of base price has been fixed at Rs 130 per month, excluding GST
- Pay channels must be offered to customers on a-la-carte basis. Customers keen on watching a specific paid channel should have the option to subscribe only to that by paying the price fixed for it
- Customer should not have to purchase a package/bouquet of that channel with other channels at a higher price
- Service providers can offer bouquets/packages of channels. MRP of a pay channel offered in a bouquet cannot exceed Rs 19
- Television channels cannot be priced differently for different distribution platforms
- High definition (HD) and standard definition (SD) channels cannot be in the same bouquet of channels
- Pay channels and free to air channels cannot be in the same bouquet
- MRP of channels needs to be displayed on the TV screen through the Electronic Program Guide. FTA channels should be indicated so
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