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Category: Regulators

  • DAS inter-connect regime: TRAI mulling distribution fee, data sharing

    DAS inter-connect regime: TRAI mulling distribution fee, data sharing

    MUMBAI: Indian broadcast regulator TRAI may propose a percentage of the total number of TV channels that a consumer subscribes (based on their maximum retail price as proposed recently in draft tariff regulations) as distribution or facilitation fee.

    The regulator, which is likely to soon come out with its recommendations on interconnection framework for broadcasting TV services distributed through digital addressable systems, may also propose an additional fee for every 25 TV channels subscribed to by a consumer beyond 100 channels.

    The percentage of distribution fee may be between 15-20 per cent of the total cost of TV channels subscribed by a consumer. These would form part of revenue sharing formula between broadcasters and distribution platforms and LCOs.

    Who’ll pay the distribution fee and the additional cost for every 25 channels distributed beyond 100 TV channels to a consumer? It’s still not clear, but most probably the consumer. These additional costs will be exclusive of government taxes.

    Few days back, TRAI had come out with draft guidelines on tariff and regulations relating to quality of services and had, in its wisdom, tried to safeguard the interest of each stakeholder for the overall development of the broadcast and cable industry, including higher ARPUs if consumers subscribed to stand-alone premium channels where no price caps were mandated.

    The Telecom Regulatory Authority of India (TRAI) had issued an amended version of its Interconnection Regulations, 2004 in 2012 with an aim to keep pace with the evolving TV eco-system in India and introduction of digital addressable system (DAS). The 2012 regulations had laid down certain revenue sharing formula that envisaged the following:

    — (a) the charges collected from the subscription of channels of basic service tier, free to air channel and bouquet of free to air channels shall be shared in the ratio of 55:45 between multi-system operator and local cable operator respectively.

    —(b) the charges collected from the subscription of channels or bouquet of channels or channels and bouquet of channels other than those specified under clause (a) shall be shared in the ratio of 65:35 between multi-system operator and local cable operator, respectively

    Trying to update its inter-connect guidelines in 2016, the regulator is also mulling, with an aim to bring about more transparency in the system, that all agreements between broadcasters and MSOs and MSOs and LCOs should be uploaded in an encrypted format on a server that can be accessed via passwords by stakeholders.

    Though this particular move has been resisted by some stakeholders, TRAI is of the opinion that such a move on data sharing could pave way for elimination of opaqueness in agreements between broadcasters and distribution platforms.

    “The question that then arises is who should develop an IMS (integrated management system), which can be used by all service providers and ensure its proper functioning. It could be either an industry-led body, which operates as per the guidelines prescribed by the regulator or a private entity willing to offer such services in lieu of fee for each interconnection request, or any other option as suggested by the stakeholders,” TRAI had asked stakeholders earlier this year for feedback in its consultation paper on interconnect issues.

    ALSO READ:

    TRAI releases draft tariff & consumer DAS regulations

    Offer Premium channels as a la carte, don’t bundle: TRAI

     

  • TRAI tariff order: MSOs welcome its direction

    TRAI tariff order: MSOs welcome its direction

    NEW DELHI: At least two multisystem operators (MSOs) have welcomed the broad drift of the Telecom Regulatory Authority of India’s  (TRAI’s) Telecommunication (Broadcasting and Cable Services) (Eighth) (Addressable Systems) Tariff Order, 2016. The draft, released on Monday, seeks to bring in transparency to an otherwise disorganized sector.

    Indiantelevision.com spoke to a bunch of executives from broadcasting, cable TV,  and even the TRAI advisor on the proposed regulation. Most said it was too early to comment as they had not got the time to study it.

    S N Sharma, who surprised many earlier this year by returning to the national multi-system operator (MSO) DEN Networks as its  chief executive, said “It is a good draft; we welcome it. It brings a lot of transparency and ease, especially in the life of the consumer. We, as an MSO, look for a fair share of revenue, and hope to get the same.” He said he still had to study the draft in full, and would give further comments later.

    public://sn-sharma_0.jpg
    S.N.Sharma CEO,DEN Networks Limited

    Regional MSO Ortel Communications President & CEO  Bhibhu Prasad Rath, welcoming the draft, said “We believe that this draft regulation, if implemented, will bring in path-breaking changes to the industry structure with a lot of transparency and non-discrimination.”

    Rath added: “Currently, there is widespread discrimination in the content deals done by some broadcasters with various DPOs (distribution platform operators). The prices of the same channels or bouquet of channels vary widely from one DPO to another across the country. The new proposed regulation intends to bring in uniformity in the cost structure so that a level-playing field will be created while we all compete in the same market.”

    Rath also noted that the other major issue that the regulations attempts to address is the unbundling of channels. “Currently, many broadcasters offer around 80-90% discount / incentives on a bouquet deal as compared to the sum of a la carte prices of the respective channels. This, in my view, is unreasonable and intended to discourage a la carte subscription. The proposed regulation, by capping the bouquet discount at a maximum of 15%, will be a big relief to consumers who want to subscribe to channels on a la carte basis and will encourage DPOs to pass on to the benefit to consumers.”

    “Overall, this regulation, in addition to bringing in non-discriminatory and transparent practices in the industry, will go a long way in implementing digitization in its true spirit where “choice” is in the hands of the consumers,” he concluded.

    “I think it is a fabulous piece of proposed regulation,” says HITS consultant Castle Media director Vynsley Fernandes. “I think the TRAI has really outdone itself. I can only see the industry opening up and growing from hereon.”

    However, National Cable and Telecommunications head and founder of Home Cable Network of Delhi, Vikki Choudhry was the dissenting voice. Said he:  “This draft order is still not a cost-based tariff fixation, TRAI was supposed to conduct an exercise according to the Supreme Court and TDSAT orders. This draft tariff is completely anti-consumer. When the present tariff (rates) were coming down by 70 per cent, the regulator has further provisioned an increase of about 45-55 per cent for the Pay TV broadcasters.”

    (In May this year, TDSAT had said it thought TRAI “will be well advised to have a fresh look at the various tariff orders in a holistic manner and come out with a comprehensive tariff order in supersession of all the earlier tariff orders.”) Sunil Gupta, advisor to TRAI, responding to this allegation said: “We have protected the interests of the consumer: why should he pay even one extra rupee for a channel he does not want to watch? This draft brings the power of choice to the consumer’s hands. He can choose to have a lower cable TV bill or higher.”

    Gupta further added that the new category of  premium channels will allow broadcasters to offer specialized channels at higher MRPs – even Rs 100 – if the consumer wants them at this price, thus overall increasing the ARPUs of all those in the value chain.

    Gupta also said that the interconnection paper for local cable operators and multi-system operators would come out soon. The entire industry value chain should read this and understand we have protected everyone’s interests – the cable TV operators, MSOs, broadcasters, customers. The  ARPUs of the entire industry would go up in the coming months, he said.

    Also read:

    Tariff Hike Case: SC rejects appeal challenging TDSAT order; asks TRAI to out new tariff

     

  • TRAI tariff order: MSOs welcome its direction

    TRAI tariff order: MSOs welcome its direction

    NEW DELHI: At least two multisystem operators (MSOs) have welcomed the broad drift of the Telecom Regulatory Authority of India’s  (TRAI’s) Telecommunication (Broadcasting and Cable Services) (Eighth) (Addressable Systems) Tariff Order, 2016. The draft, released on Monday, seeks to bring in transparency to an otherwise disorganized sector.

    Indiantelevision.com spoke to a bunch of executives from broadcasting, cable TV,  and even the TRAI advisor on the proposed regulation. Most said it was too early to comment as they had not got the time to study it.

    S N Sharma, who surprised many earlier this year by returning to the national multi-system operator (MSO) DEN Networks as its  chief executive, said “It is a good draft; we welcome it. It brings a lot of transparency and ease, especially in the life of the consumer. We, as an MSO, look for a fair share of revenue, and hope to get the same.” He said he still had to study the draft in full, and would give further comments later.

    public://sn-sharma_0.jpg
    S.N.Sharma CEO,DEN Networks Limited

    Regional MSO Ortel Communications President & CEO  Bhibhu Prasad Rath, welcoming the draft, said “We believe that this draft regulation, if implemented, will bring in path-breaking changes to the industry structure with a lot of transparency and non-discrimination.”

    Rath added: “Currently, there is widespread discrimination in the content deals done by some broadcasters with various DPOs (distribution platform operators). The prices of the same channels or bouquet of channels vary widely from one DPO to another across the country. The new proposed regulation intends to bring in uniformity in the cost structure so that a level-playing field will be created while we all compete in the same market.”

    Rath also noted that the other major issue that the regulations attempts to address is the unbundling of channels. “Currently, many broadcasters offer around 80-90% discount / incentives on a bouquet deal as compared to the sum of a la carte prices of the respective channels. This, in my view, is unreasonable and intended to discourage a la carte subscription. The proposed regulation, by capping the bouquet discount at a maximum of 15%, will be a big relief to consumers who want to subscribe to channels on a la carte basis and will encourage DPOs to pass on to the benefit to consumers.”

    “Overall, this regulation, in addition to bringing in non-discriminatory and transparent practices in the industry, will go a long way in implementing digitization in its true spirit where “choice” is in the hands of the consumers,” he concluded.

    “I think it is a fabulous piece of proposed regulation,” says HITS consultant Castle Media director Vynsley Fernandes. “I think the TRAI has really outdone itself. I can only see the industry opening up and growing from hereon.”

    However, National Cable and Telecommunications head and founder of Home Cable Network of Delhi, Vikki Choudhry was the dissenting voice. Said he:  “This draft order is still not a cost-based tariff fixation, TRAI was supposed to conduct an exercise according to the Supreme Court and TDSAT orders. This draft tariff is completely anti-consumer. When the present tariff (rates) were coming down by 70 per cent, the regulator has further provisioned an increase of about 45-55 per cent for the Pay TV broadcasters.”

    (In May this year, TDSAT had said it thought TRAI “will be well advised to have a fresh look at the various tariff orders in a holistic manner and come out with a comprehensive tariff order in supersession of all the earlier tariff orders.”) Sunil Gupta, advisor to TRAI, responding to this allegation said: “We have protected the interests of the consumer: why should he pay even one extra rupee for a channel he does not want to watch? This draft brings the power of choice to the consumer’s hands. He can choose to have a lower cable TV bill or higher.”

    Gupta further added that the new category of  premium channels will allow broadcasters to offer specialized channels at higher MRPs – even Rs 100 – if the consumer wants them at this price, thus overall increasing the ARPUs of all those in the value chain.

    Gupta also said that the interconnection paper for local cable operators and multi-system operators would come out soon. The entire industry value chain should read this and understand we have protected everyone’s interests – the cable TV operators, MSOs, broadcasters, customers. The  ARPUs of the entire industry would go up in the coming months, he said.

    Also read:

    Tariff Hike Case: SC rejects appeal challenging TDSAT order; asks TRAI to out new tariff

     

  • TRAI may check broadcasters & distributors’ monopolistic behaviour

    TRAI may check broadcasters & distributors’ monopolistic behaviour

    NEW DELHI: The Telecom Regulatory Authority of India may intervene in case any monopolistic behaviour of significant market power (SMP) is observed or brought to its notice in future although it has decided not to regulate the market power at present.

    It said in its draft tariff orders that it will keep a watch on the developments after implementation of the new framework. It has noted that the monopolistic behaviour is well demonstrated by both, broadcasters as well as distributors of television channels. However, it says that it is prescribing a new framework for television broadcasting sector.

    In the consultation paper that has led to this draft, stakeholders had been asked to suggest whether there was a need to identify significant market powers. The stakeholders were also asked to suggest the criteria for classifying an entity as the a significant power.

    A majority of broadcasters felt that the issue of identifying SMPs was in the purview of the Competition Commission of India (CCI) and there was no need for TRAI to do so. They also said the CCI provides adequate safeguards for preventing anti-competitive behaviour. A few broadcasters however favoured the idea of SMP identification and have given suggestions on identifying SMPs.

    A few distributors of television channels submitted that there was no need to identify SMPs while the others believed that such a distinction be made. Some distributors suggested that vertically integrated entities in the distribution sector be subjected to additional regulations.

    Also read

    I&B ministry to take up cable TV monopoly recommendations

  • TRAI may check broadcasters & distributors’ monopolistic behaviour

    TRAI may check broadcasters & distributors’ monopolistic behaviour

    NEW DELHI: The Telecom Regulatory Authority of India may intervene in case any monopolistic behaviour of significant market power (SMP) is observed or brought to its notice in future although it has decided not to regulate the market power at present.

    It said in its draft tariff orders that it will keep a watch on the developments after implementation of the new framework. It has noted that the monopolistic behaviour is well demonstrated by both, broadcasters as well as distributors of television channels. However, it says that it is prescribing a new framework for television broadcasting sector.

    In the consultation paper that has led to this draft, stakeholders had been asked to suggest whether there was a need to identify significant market powers. The stakeholders were also asked to suggest the criteria for classifying an entity as the a significant power.

    A majority of broadcasters felt that the issue of identifying SMPs was in the purview of the Competition Commission of India (CCI) and there was no need for TRAI to do so. They also said the CCI provides adequate safeguards for preventing anti-competitive behaviour. A few broadcasters however favoured the idea of SMP identification and have given suggestions on identifying SMPs.

    A few distributors of television channels submitted that there was no need to identify SMPs while the others believed that such a distinction be made. Some distributors suggested that vertically integrated entities in the distribution sector be subjected to additional regulations.

    Also read

    I&B ministry to take up cable TV monopoly recommendations

  • The TRAI broadcasting & cable tariff order simplified

    The TRAI broadcasting & cable tariff order simplified

    MUMBAI: The industry could not have asked for a better Dusshera gift. On the eve of 11 October 2016, India’s telecom and TV distribution regulator  The Telecom Regulatory Authority of India (TRAI) announced two draft legislations  – The Telecommunication (Broadcasting and Cable Services) (Eighth) (Addressable Systems) Tariff Order, 2016 and Standards of Quality of Service and Consumer Protection (Digital Addressable Systems) Regulations, 2016 – that definitely look like progressing the stuck-in-quicksand-of-uncertainty broadcast TV and cable TV sector. More than that, they could possibly inject a modicum of organization, professionalism and structure to an otherwise disorganized-free-for-all TV distribution business.

    The first of the draft legislation attempts to put in place a pricing framework for the heavily conflicted cable TV distribution sector. The second seeks to upgrade the quality of services that MSOs, cable TV operators provide to the consumers. Both have been much-awaited pieces of legislation.

    The third which seeks to iron out the much-maligned and disputed subscription revenue stream that flows between broadcasters, MSOs, cable TV operators and consumers is expected to be announced soon.

    Let’s look at the pricing draft whose purpose TRAI says is to ensure:

    –       transparency, non-discrimination, non-exclusivity for all stakeholders in value chain
    –       affordable TV services for customers
    –       adequate choice to consumers
    –       balance the commercial interests of broadcasters and distributors of television  channels to enable the distributors of television channels to recover their network cost and the broadcasters to recover their content cost.

    The TRAI wants the new Tariff Order or the MRP pricing regime to become effective from 1 April 2017.In the new scheme, the authority has in detail defined the role of  broadcasters, LCOs and MSOs or HITS operators. This is an attempt to simplify the order for everyone to be able to understand it.

    The role of the broadcaster

    Under this, broadcasters will have to first declare their channels as a pay channel or a free to air channel, on an a  la carte basis, and in one of the following seven genres: devotional, general entertainment, infotainment, kids, movies, news and current affairs and sports. The TRAI has defined a ceiling on the maximum retail price (MRP) for each of the genres: devotional (Rs 3), general entertainment (Rs 12), infotainment (Rs 9), kids (Rs 7), movies (Rs 10), news and current affairs (Rs 5) and sports (Rs 19).

    Each pay channel has to have a MRP  that can vary depending on the region, but which cannot be changed before the expiry of six months of it being declared. These rates will be platform agnostic – that is, uniform across the platforms (cable TV, DTH, HITS and IPTV) across a relevant geographical market, and will have to be declared on each broadcaster’s website and be transparently available to the TRAI, TV distributors and consumers.

    The pay channels of a network or its subsidiary or holding company or subsidiary of the holding company can be packaged into a bouquet. This can be done while taking the precaution that the bouquet’s MRP is not less than 85 per cent of the sum of the MRPs of the a la carte pay channels forming a part of the bouquet. Similar conditions of holding prices for six months and in geographical areas also apply to bouquets.

    The TRAI has introduced a category called a premium channel. Broadcasters are free to notify any channel as premium channel in their reference interconnect order (RIO). There shall be no price cap on maximum retail price notified by broadcasters for customers. For HD channels, the regulatory authority has, however, stated the price cannot be more than three times the MRP of the corresponding channel transmitted in SD. For those HD channels that do not have a corresponding SD channel, the benchmark will be the ceiling on the MRP of the genre it is in. These independent HD channels will have a price ceiling of three times the ceiling of the MRP of the genre.

    As far as pay per view or VOD goes, the TRAI says it will bring it under its purview at a later date as these services are in their infancy in India and have minimal adoption.

    The television distributor’s role

    On the television distributor side, the TRAI has made them responsible to provide all channels on a la carte basis and it has also  proposed to formalize  a minimum subscription fee of Rs 130 per month per set top box from a subscriber for 100 SD channels.  Now if an HD channel is included in this, it will be equal to 2 SD channels.

    The TRAI has stated that TV distributors cannot change the bouquets formed by broadcasters or its price, but they can form bouquets themselves of pay channels of different broadcasters provided that their price is not less than 85 per cent of the sum of the MRPs of the pay channels forming part of the bouquet. Free to air, HD and SD variants of the same channel and premium channels are not permitted to be included in these bouquets.

    The authority says that the composition of the 100 channel basic tier should be left to the subscriber’s volition. It can consist of FTA, pay, premium channels, broadcast bouquets or even television distributor package bouquets. But it has to have the government mandated channels and at least five channels of each of the seven genres. If the subscriber opts for pay TV or premium or HD channels or broadcast or TV distributor bouquets, he will have to pay the retail price for these separately.

    Subscribers wanting channels beyond the basic tier can opt for other channels by paying the TV distributor Rs 20 – excluding taxes-  for each slab of 25 channels and the broadcaster the MRP of each channel.

    The TV distributors also have another responsibility. The electronic programming guide on the network must display the details of all channels and their MRP genre wise for easy navigation. Broadcasters who are relying on TV distributors to collect and remit the pay channel revenues will provide a 20 per cent distribution fee to them, which the latter can share with the LCOs who are actually doing the collection. Additionally, TV channels can also offer a maximum 15 per cent MRP discount to TV distributors to encourage them. Parameters for discounts will be disclosed by broadcasters in the RIOs that will be transparent and uniform for all distributors of television channels.

     

  • The TRAI broadcasting & cable tariff order simplified

    The TRAI broadcasting & cable tariff order simplified

    MUMBAI: The industry could not have asked for a better Dusshera gift. On the eve of 11 October 2016, India’s telecom and TV distribution regulator  The Telecom Regulatory Authority of India (TRAI) announced two draft legislations  – The Telecommunication (Broadcasting and Cable Services) (Eighth) (Addressable Systems) Tariff Order, 2016 and Standards of Quality of Service and Consumer Protection (Digital Addressable Systems) Regulations, 2016 – that definitely look like progressing the stuck-in-quicksand-of-uncertainty broadcast TV and cable TV sector. More than that, they could possibly inject a modicum of organization, professionalism and structure to an otherwise disorganized-free-for-all TV distribution business.

    The first of the draft legislation attempts to put in place a pricing framework for the heavily conflicted cable TV distribution sector. The second seeks to upgrade the quality of services that MSOs, cable TV operators provide to the consumers. Both have been much-awaited pieces of legislation.

    The third which seeks to iron out the much-maligned and disputed subscription revenue stream that flows between broadcasters, MSOs, cable TV operators and consumers is expected to be announced soon.

    Let’s look at the pricing draft whose purpose TRAI says is to ensure:

    –       transparency, non-discrimination, non-exclusivity for all stakeholders in value chain
    –       affordable TV services for customers
    –       adequate choice to consumers
    –       balance the commercial interests of broadcasters and distributors of television  channels to enable the distributors of television channels to recover their network cost and the broadcasters to recover their content cost.

    The TRAI wants the new Tariff Order or the MRP pricing regime to become effective from 1 April 2017.In the new scheme, the authority has in detail defined the role of  broadcasters, LCOs and MSOs or HITS operators. This is an attempt to simplify the order for everyone to be able to understand it.

    The role of the broadcaster

    Under this, broadcasters will have to first declare their channels as a pay channel or a free to air channel, on an a  la carte basis, and in one of the following seven genres: devotional, general entertainment, infotainment, kids, movies, news and current affairs and sports. The TRAI has defined a ceiling on the maximum retail price (MRP) for each of the genres: devotional (Rs 3), general entertainment (Rs 12), infotainment (Rs 9), kids (Rs 7), movies (Rs 10), news and current affairs (Rs 5) and sports (Rs 19).

    Each pay channel has to have a MRP  that can vary depending on the region, but which cannot be changed before the expiry of six months of it being declared. These rates will be platform agnostic – that is, uniform across the platforms (cable TV, DTH, HITS and IPTV) across a relevant geographical market, and will have to be declared on each broadcaster’s website and be transparently available to the TRAI, TV distributors and consumers.

    The pay channels of a network or its subsidiary or holding company or subsidiary of the holding company can be packaged into a bouquet. This can be done while taking the precaution that the bouquet’s MRP is not less than 85 per cent of the sum of the MRPs of the a la carte pay channels forming a part of the bouquet. Similar conditions of holding prices for six months and in geographical areas also apply to bouquets.

    The TRAI has introduced a category called a premium channel. Broadcasters are free to notify any channel as premium channel in their reference interconnect order (RIO). There shall be no price cap on maximum retail price notified by broadcasters for customers. For HD channels, the regulatory authority has, however, stated the price cannot be more than three times the MRP of the corresponding channel transmitted in SD. For those HD channels that do not have a corresponding SD channel, the benchmark will be the ceiling on the MRP of the genre it is in. These independent HD channels will have a price ceiling of three times the ceiling of the MRP of the genre.

    As far as pay per view or VOD goes, the TRAI says it will bring it under its purview at a later date as these services are in their infancy in India and have minimal adoption.

    The television distributor’s role

    On the television distributor side, the TRAI has made them responsible to provide all channels on a la carte basis and it has also  proposed to formalize  a minimum subscription fee of Rs 130 per month per set top box from a subscriber for 100 SD channels.  Now if an HD channel is included in this, it will be equal to 2 SD channels.

    The TRAI has stated that TV distributors cannot change the bouquets formed by broadcasters or its price, but they can form bouquets themselves of pay channels of different broadcasters provided that their price is not less than 85 per cent of the sum of the MRPs of the pay channels forming part of the bouquet. Free to air, HD and SD variants of the same channel and premium channels are not permitted to be included in these bouquets.

    The authority says that the composition of the 100 channel basic tier should be left to the subscriber’s volition. It can consist of FTA, pay, premium channels, broadcast bouquets or even television distributor package bouquets. But it has to have the government mandated channels and at least five channels of each of the seven genres. If the subscriber opts for pay TV or premium or HD channels or broadcast or TV distributor bouquets, he will have to pay the retail price for these separately.

    Subscribers wanting channels beyond the basic tier can opt for other channels by paying the TV distributor Rs 20 – excluding taxes-  for each slab of 25 channels and the broadcaster the MRP of each channel.

    The TV distributors also have another responsibility. The electronic programming guide on the network must display the details of all channels and their MRP genre wise for easy navigation. Broadcasters who are relying on TV distributors to collect and remit the pay channel revenues will provide a 20 per cent distribution fee to them, which the latter can share with the LCOs who are actually doing the collection. Additionally, TV channels can also offer a maximum 15 per cent MRP discount to TV distributors to encourage them. Parameters for discounts will be disclosed by broadcasters in the RIOs that will be transparent and uniform for all distributors of television channels.

     

  • Offer Premium channels as a la carte, don’t bundle: TRAI

    Offer Premium channels as a la carte, don’t bundle: TRAI

    NEW DELHI: The Telecom Regulatory Authority of India, which issued draft DAS tariff earlier today, decided that a broadcaster will be free to declare any of its channels as ‘Premium’ so long as its maximum retail price is notified to the subscriber.

    TRAI considered all the issues relevant to the classification and pricing of ‘Premium channels’ recognising the fact that encouragement of quality content through a rational classification and a distinctly different ‘Premium’ pricing policy will benefit all.

    TRAI decided that the premium channels shall be offered only on a-la-carte basis to subscribers and shall not form a part of any bouquet or package in the entire value chain.

    The distributors of television channels will also display MRP of Premium channels in their EPG and also provide a special flag in EPG for easy identification of Premium channels by subscribers.

    It noted that, with a maturing TV audience, a demand was felt for content that may not have a mass following. This is borne by the fact that there have been an increasing number of channels that cater to a niche audience. A number of niche channel issues like redefinition, classification criteria, tariff fixation, gestation and related facets were posed for consultation.

    It noted that most stakeholders responded enthusiastically to the idea of redefining ‘Niche channel’ in the new scenario and their regulation in a manner that is different from mass viewing channels like general entertainment, etc. The stakeholders also expressed concerns about possible misuse if genre price cap is totally withdrawn for certain category of the content while submitting their suggestions for classification of such niche channels.

    TRAI noted that broadcasters provide popular content for mass viewing to get large viewership of their channels, and hence more revenue from advertisements. This has resulted in minimal investments in the development of content which is viewed by a select class of viewers. Such content is not limited to niche channels only; there is other type of content which has a select viewership such as education, health, and women welfare etc.

    The advertisement revenues for Premium channels may also be relatively limited due to the limited viewership. Therefore, TRAI is of the view that the MRP of a premium channel will be under forbearance. It can be argued that forbearance may allow the broadcasters to fix high MRP for premium channels. However, high MRP may deter customers to subscribe to such channels impacting the subscription as well as advertising revenue of a broadcaster. This will compel broadcasters to price their premium channels reasonably.

    The categorization of a ‘Premium channel’ will be agnostic of the content, format (SD/HD etc). Once a broadcaster has reported a channel as a ‘Premium channel’, it will continue to do as long as the broadcaster chooses to, subject to a minimum period of six months. Any reported change in the category of a ‘Premium channel’ to other genre would then be subject to the reporting related to the genres and associated ceilings.

  • Offer Premium channels as a la carte, don’t bundle: TRAI

    Offer Premium channels as a la carte, don’t bundle: TRAI

    NEW DELHI: The Telecom Regulatory Authority of India, which issued draft DAS tariff earlier today, decided that a broadcaster will be free to declare any of its channels as ‘Premium’ so long as its maximum retail price is notified to the subscriber.

    TRAI considered all the issues relevant to the classification and pricing of ‘Premium channels’ recognising the fact that encouragement of quality content through a rational classification and a distinctly different ‘Premium’ pricing policy will benefit all.

    TRAI decided that the premium channels shall be offered only on a-la-carte basis to subscribers and shall not form a part of any bouquet or package in the entire value chain.

    The distributors of television channels will also display MRP of Premium channels in their EPG and also provide a special flag in EPG for easy identification of Premium channels by subscribers.

    It noted that, with a maturing TV audience, a demand was felt for content that may not have a mass following. This is borne by the fact that there have been an increasing number of channels that cater to a niche audience. A number of niche channel issues like redefinition, classification criteria, tariff fixation, gestation and related facets were posed for consultation.

    It noted that most stakeholders responded enthusiastically to the idea of redefining ‘Niche channel’ in the new scenario and their regulation in a manner that is different from mass viewing channels like general entertainment, etc. The stakeholders also expressed concerns about possible misuse if genre price cap is totally withdrawn for certain category of the content while submitting their suggestions for classification of such niche channels.

    TRAI noted that broadcasters provide popular content for mass viewing to get large viewership of their channels, and hence more revenue from advertisements. This has resulted in minimal investments in the development of content which is viewed by a select class of viewers. Such content is not limited to niche channels only; there is other type of content which has a select viewership such as education, health, and women welfare etc.

    The advertisement revenues for Premium channels may also be relatively limited due to the limited viewership. Therefore, TRAI is of the view that the MRP of a premium channel will be under forbearance. It can be argued that forbearance may allow the broadcasters to fix high MRP for premium channels. However, high MRP may deter customers to subscribe to such channels impacting the subscription as well as advertising revenue of a broadcaster. This will compel broadcasters to price their premium channels reasonably.

    The categorization of a ‘Premium channel’ will be agnostic of the content, format (SD/HD etc). Once a broadcaster has reported a channel as a ‘Premium channel’, it will continue to do as long as the broadcaster chooses to, subject to a minimum period of six months. Any reported change in the category of a ‘Premium channel’ to other genre would then be subject to the reporting related to the genres and associated ceilings.

  • TRAI tariff & quality of services regulations

    TRAI tariff & quality of services regulations

    NEW DELHI: The maximum retail price of a general entertainment television channel under the digital addressable system cannot exceed Rs 12 and that of a sports channel cannot go above Rs 19, according to the draft of the DAS tariff order issued by the Telecom Regulatory Authority of India.

    The maximum prices of other genres are: movies – Rs 10, infotainment – Rs nine, kids – Rs seven, news and current affairs – Rs five, and devotional – Rs three.

    Even as the TRAI permitted broadcasters to offer bouquets if they wish to, it has said that the total price of the bouquet will not exceed 85 per cent of the total individual price of each of the channels in such a bouquet.

    Furthermore, as consumers are often unsure of the fact that free to air channels are not be charged, the Authority has decided that bouquets of pay channels and FTA channels have to be separate — there can be no bundling of pay and FTA channels both, at the broadcaster as well as at the distributor of television channels level, as it will help to reduce forced bundling of packages with FTA channels in view of fixed fee/CPS deals being executed by the broadcasters. The Tariff order states that broadcasters will have to qualify a channel as a pay TV or a free channel.

    All stakeholders have been asked to respond to the tariff order draft by 24 October, after which TRAI will form its final opinion and issue the Telecommunication (Broadcasting and Cable Services) (Eighth) (Addressable Systems) Tariff Order 2016.

    The maximum retail price of a pay channel transmitted in SD format in a given genre shall not exceed the rate specified for such genre.  

    The maximum retail price of a pay channel transmitted in HD format shall not be more than three times the maximum retail price of corresponding channel transmitted in SD format, But if the corresponding SD channel of a HD channel is not available, the maximum retail price of such HD channel shall not exceed three times the rate specified for corresponding genre.

    The ceiling on maximum retail price shall apply to all the existing pay channels as well as to new pay channels that are launched or converted from free to air channel to pay channel after the commencement of this tariff order.

    In the new framework, the number of genres has been reduced to 7 from existing 11. Some of the existing genres have been grouped together to form a new genre, while some genres have been retained.

    In case a genre has been retained as it is, the maximum retail price of a channel to the customer in that genre will be 1.20 times the existing price cap for that genre for addressable systems. In case, multiple genres have been clubbed to form a new genre, maximum retail price of a channel in that genre to the customer will be 1.20 times the existing price cap of that genre which has the highest price cap for addressable systems.

    Meanwhile, TRAI also issued a draft of the Standards of Quality of Service and Consumer Protection (Digital Addressable Systems) Regulations, 2016 and wanted stakeholders to react to these by 25 October 2016.

    The broadcaster will have to ensure that the maximum retail price of such bouquet of pay channels in a relevant geographical area shall be uniform for all distribution platforms in that area; that it should not contain any free to air channel or HD or SD variants of the same channels or any premium channels.

    The Q of S Regulations have addressed almost every aspect of the cable TV ecosystem going forward fixing the responsibility of the broadcaster, the cable TV platform, the distributor and consumer. It covers everything from subscriber management systems to disconnection and reconnection of services to a la carte pricing to package pricing to the tariffs that can be charged by cable TV operators, MSOs, and broadcasters to billing to creating consumer awareness about DAS. 

    Referring to the discussions it held with stakeholders, TRAI says the Authority had prescribed a genre-ceiling subject to inflation linked hikes. All the channels have to prescribe channel rate in accordance with the applicable genre-ceilings in non-addressable and addressable systems.

    Some broadcasters had submitted that they agree with genre-wise pricing, maximum and minimum defined for channel pricing with regular revision of caps from time to time.

    Broadcasters have also submitted that the price cap should be based on channel popularity, number of channels in a particular genre and actual viewership based on distributor of television channels disclosures. They have further opined that a maximum of 33% discount on wholesale price across all genres must be allowed with the frequency to revisit genre ceilings be 1 to 2 years.

    A majority of the distributors of television channels have submitted that the price caps may be determined by TRAI using the existing commercial agreements data filed with TRAI.

    According to them, one such method to arrive the genre-wise price caps can be a simple average of current RIO rates of channels in a genre. Most of the distributors of television channels have further submitted that there exists and inverse relation between price of a channel and popularity-viewership. As a-la-carte rates increase, penetration of the channel decreases thereby decreasing ad-revenue. They are of the opinion that a maximum of 40-50% discounts should be allowed on the RIO rates for fair and non-discriminatory pricing of channels to all the distributors of television channels. They further suggested that the frequency to revisit genre ceilings may be 1- 5 years.

    The existing framework for genre ceiling is working well. Therefore in order to have continuity, the Authority is of the view that existing genre ceiling should continue. However, in the new framework, broadcasters will provide distribution fee of 20% on the MRP to distributors of television channels. Accordingly, the Authority has proposed a new genre-ceiling for MRP to customers with adequate scope to cater for additional business margins at 20% of the existing genre ceilings for addressable systems. It is expected that the prices will be regulated by the market forces based on the demand of channels or TRP.

    Also Read:  TRAI releases draft tariff & consumer DAS regulations