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Zee, Sony and Disney Star channels go off air due to tiff with cable operators

Many viewers are seeing a blackout on some of the popular television channels due to a disagreement between broadcasters and cable operators.

Top broadcasters including Zee Entertainment, Sony Pictures Networks India and Disney Star have switched off their signals to cable operators and over 40 million households will not be able to view channels belonging to these broadcasters.

While the broadcasters have hiked channel prices, the cable operators have not agreed for the rate increase.

Broadcasters have increased prices in the range of 10-15 percent as the New Tariff Order (NTO) 3.0 allowed them to raise the prices of channels that are part of a bouquet to Rs 19, from Rs 12 earlier. The new pricing came into effect from February 1 this year.

However, cable operators or multiple system operators (MSOs) are not ready to increase channel prices as they feel the increase is steep for their customers who are price sensitive.

MSO refers to an operator of multiple cable or direct-broadcast satellite television systems who provides signals to consumers’ houses through local cable operators (LCOs). MSOs have to share a part of network capacity fees (NCF) with LCOs.

NCF is the amount customers are charged for distribution of TV channels.

On the other hand, IBDF (Indian Broadcasting and Digital Foundation, an apex body of TV broadcasters said that 90 percent of operators including DTH (direct-to-home) and MSOs (multiple system operator) have signed up for NTO 3.0 but the remaining operators are holding back.

DTH service is distribution of multi-channel TV programs by using a satellite system.

“Broadcasters have, therefore, been left with little choice but to turn off the supply of content to these distributors. We remain hopeful of their cooperation and look forward to a scenario where content is seamlessly available to all television viewers across the country,” Siddharth Jain, secretary general, IBDF, said in a statement.

However, the abovementioned broadcasters are demanding a price hike of around 25-30 percent on the channel packages, which the MSO’s haven’t agreed upon, noted Karan Taurani, senior vice President, Elara Capital.

“The interim blackout will have a significant negative impact on ad revenue for the above broadcasters, apart from a hit on the subscription revenue if this issue persists for more than a few days,” he said.

Ad revenue for broadcasters is already under pressure due to new age and commerce companies cutting ad spends, the analyst said.

TV advertising revenue recovered to 95 percent of pre-Covid in FY22 and is estimated to move to 90 percent recovery rate versus pre-Covid in FY23 due to a relatively muted festive season, he added.

But Taurani added that the negative impact will be far higher for the MSO’s who have to go through this blackout for their customer base, as these broadcasters have a substantial viewership share on TV.

He said that the three broadcasters contribute in the range of 40- 45 percent of the total TV viewership share in India.

“Eventually, some of the MSO customers may migrate to DTH if the uncertainty or blackout persists for longer than expected,” said Taurani in a note.

Cable operators including Fastway Media Cable Network Pvt Ltd and GTPL have sent notices to their customers stating that post NTO 3.0 implementation there has been massive increase in TV channel prices. But they are trying all measures including legal challenge to avoid any major increase in rates for their customers.

All India Digital Cable Federation (AIDCF), a lobby group of the MSO, has approached the Kerala High Court against NTO 3.0. They have also asked for interim relief from disconnection notices issued by broadcasters. The matter is listed for hearing on February 20. Money Control

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