Fixed-Style deals under fire as DPOs demand 5–7% content fee cuts

Subscriber churn and rising channel prices are pushing India’s major distribution platform operators (DPOs) to demand cuts in content payouts to broadcasters, as fixed-style deals increasingly strain their margins.

Pressure on DPO economics
DPOs including Tata Play, Airtel Digital TV and GTPL are asking for reduced payouts in their content carriage and distribution deals, citing falling subscriber bases and successive channel price hikes. They argue that while revenues from linear TV are under pressure, their obligations to broadcasters have remained almost fixed, eroding profitability.

Under the current structure, DPOs distribute TV content via cable, DTH and HITS platforms but say they are unable to align payouts with the pace of subscriber churn. Industry executives quoted in the ET report note that this mismatch is making it harder to sustain year‑on‑year revenue growth, even as operating costs rise.

Fixed-fee deals despite NTO
While the Telecom Regulatory Authority of India’s New Tariff Order formally does not permit fixed-fee content deals, near-fixed payout arrangements reportedly remain common in practice. Executives say that broadcasters have offered only modest relief in ongoing renegotiations, with discounts largely limited and insufficient to offset the broader squeeze.

Most DPOs are said to be seeking 5–7% reductions in payouts to broadcasters to restore some financial viability. One senior distribution executive cited in the report described the situation as “unsustainable” without such cuts, especially in light of repeated increases in channel prices.

Broadcasters’ bargaining strength
Broadcasters with strong portfolios are expected to resist substantial fee cuts. Networks such as JioStar, Zee Entertainment Enterprises, Sun TV Network and Sony Pictures Networks India together command over 70% of television viewership, giving them significant leverage at the negotiating table.

Given their audience reach and advertiser appeal, these large broadcasters are better positioned to defend current pricing structures. This sets the stage for a tense negotiation cycle, with DPOs pushing for cost relief while top networks seek to protect their subscription and carriage revenues.
BCS Bureau