Indian Broadcasting and Digital Foundation (IBDF), the apex body of television broadcasters, has asked for bundling of TV channels be allowed, and sought the removal of price ceiling on channels in a bouquet. The IBDF was responding to a consultation paper floated by the Telecom Regulatory Authority of India (Trai) seeking views on implementation of new tariff order (NTO 2.0). The broadcasters’ body has said bundling will benefit consumers as it leads to lower costs.
In its comments the IBDF has said low prices of channels could result in closure of business or channels or cause broadcasters to compromise on the quality of content being offered.
Ceilings on channel prices for inclusion in bouquets and regulation of bouquet prices have neither resulted in consumer satisfaction nor have they benefited any stakeholder, IBDF pointed out. The Trai consultation paper was floated on 7 May to seek views of stakeholders on the NTO matter.
When NTO was first introduced and allowed consumers to choose a la carte channels the cost of entertainment went up, forcing Trai to amend its order. NTO 2.0 was announced in January 2020 which capped bouquet channel price at ₹12 instead of ₹19. IBDF had said this was not backed by any logical rationale or consumer insight, after which it had moved court.
“Bundling benefits consumers and vendors in more ways than one. Á-la-carte channels increase costs to consumers, since un-bundling of channels impacts advertising income and consumers are then required to bear higher cost of the channel,” IBDF has said in its comments. Opting for á-la-carte system alone would not only result in complete market disruption but will also result in higher prices for consumers for the same level of programming diversity, it said.
Only outliers choose limited number of channels. The general public wants to enjoy variety and choice, it said. “Given that the level of competition in the Indian television, cable and satellite market itself is high, any anti-competitive behaviour through bundling is unlikely, and surely does not require any blanket regulation,” it added.
IBDF also said input costs and inflation continue to impact the cost of creating and programming or distributing channels. “Asking broadcasters to reduce prices of channels, would either result in closure of business or channels or at the very least cause broadcasters to compromise on the quality of content being offered. This in-turn will have a domino effect of adversely impacting the overall ecosystem and all stakeholders as well. Any further restrictions on manner of offering would also drive out niche or regional channels, which may appeal to a limited section of society or viewers,” it said.
On price ceilings on channels within bouquets IBDF has said it would restrict the ability to form a package that caters to the majority of Indian TV households, which prefer bouquets because of their family size and diverse preferences. “The restrictions on bouquet pricing have also led to market disruptions, such as decrease in active subscriber base as well as revenues of broadcasters,” IBDF said. Market forces of demand and supply should be used to determine prices of channels. At the same time, there should not be any cap on the discount that broadcasters can offer to DPOs on the MRP of a-la-carte and bouquetsl, it said.
IBDF has pointed out that time spent by consumers on linear TV fell 8% year-on-year in 2021, and was slightly lower than levels seen in 2019 for Hindi speaking markets. “There is, hence, a need felt to implement commercial decisions in order to retain and eventually increase viewership. Such decisions would require flexibility in pricing and offering of channels,” it said. LiveMint