Broadcasters and regulator Trai are at odds over the usefulness of the present pricing structure of cable channels, which was introduced in February.
The Telecom Regulatory Authority of India (Trai) in a consultation paper has charged the broadcasters and the cable operators of flouting the pricing rules in spirit, but the industry believes they are now able to effectively assess consumer behaviour and in a position to review prices.
The new pricing structure offers more flexibility to subscribers in selecting the channels either individually or in bouquets.
However, Trai found out that the marketing and business strategies of broadcasters in general failed to meet the objective of the new tariff regime and consumer interest.
The consultation said heavy discounts were given on bouquets, making the a-la-carte prices of channels irrelevant in comparison.
“The MRP of the popular channels are set at the maximum permissible limit of Rs 19 to qualify to be part of a bouquet. These are then bundled with a number of marginally priced non-popular channels,” the regulator said in its consultation paper seeking industry comment.
“By following this business model, the broadcasters gain in maximising their reach even for the not so popular channels, increasing subscription revenues,” it said.
“On the flipside, this pricing strategy renders the a-la-carte subscription of the channels meaningless for the consumers and reduces options. They end up subscribing to channels not of their original choice and even paying for those channels which they are not inclined to watch without even noticing it,” Trai added.
The industry, however, is in favour of determining the prices of channels based on consumer demand.“From low involvement (of subscribers) and bulk purchase, the industry has moved to a high involvement unit purchase. There is a learning curve that will be involved for subscribers and the entire value chain,” said Prathyusha Agarwal, chief marketing officer of Zee Entertainment Enterprise Ltd.―Telegraph India