Tag: Broadcasters

  • A blessing in disguise for broadcasters

    A blessing in disguise for broadcasters

    MUMBAI: The Coronavirus pandemic and the consequent decision to suspend shoots from 19-31 March have proved to be a blessing in disguise for broadcasters. With major shut down of malls, theatres, schools, colleges etc., people are restricting themselves within the narrow confines of their homes, spending more time watching television or exploring OTT platforms. In such a situation, advertisers looking for building brand salience would definitely like to explore the opportunity with better SOV. And broadcasters, needless to say, should have their smart programming strategies in place for the next two to three weeks.

    Omnicom Media Group India Investment & Enterprise national head Yatin Balyan says: “We need to analyse this from a shorter-time frame perspective. Logistics have got hit, travel is restricted, people are not venturing out and I believe the scenario would continue for a week/two or more based on the situation. This will eventually have an adverse impact on business. Yes, certain categories will have more impact than others. Advertisers in specific categories may consider postponing media activities. But I see business getting impacted for a couple of months and once normalcy in attained business will recover very quickly.”

    Joel Multimedia founder and CEO Varghese Thomas says, “Well when I look at the coming quarters, there will be a slow phase across the board. It’s not only for the film, serial or content industry but it’s affecting all industries.  So, there is a slow down we are seeing across.  This would have a direct impact on the performance of these production houses in terms of making new contents and their bottom lines if the date gets extended beyond 31st March. This will also have an impact on the lives of people who work on these production sets.”

    He informs, “As far as broadcasters are concerned, they are dependent on their production team to deliver fresh content every day or on a weekly basis for telecast.   This cycle may get disturbed due to the embargo and it can create a shortage of fresh content.  The programming team may have to re-work their FPCs to fix the short coming and to find solutions to feed the audience with interesting content from their libraries.  This is applicable for all the platforms whether it’s a movie theatre, tv channels or an OTT platform.  There would be a drop in viewership in case these channels are not able to telecast new episodes of their fictions or reality shows.  They could fill the slots with repeat telecasts of their old popular shows and movies.  Movies particularly have decent ratings even for repeat telecasts hence that could be an option for many tv channels if the issue persists.”

    Balyan adds: “From a broadcasters’ perspective, they will have enough content bank to be able to sustain 2-3 weeks without disrupting the on-air programming. With smart programme scheduling they can easily sustain for 3-4 weeks. Also, one perspective to be observed is that the audience will consume more content leading to better viewership. Hence advertisers looking to build brand salience would like to explore this phase with better SOV.”

    He expects advertisers in certain categories to push out or delay media activity. He says, “Also at the same time, certain categories like e-com may continue to invest as people are not looking for offline purchases. For a shorter time period channels may have to manage inventory. Also, I see some rationalisation of media mix to navigate the current challenges.”

    “Planners and agencies are looking to evaluate impact on client’s business and would provide recommendations accordingly. As I said recommendation would be very category-specific,” he opines.

    “As for advertisers and media planners, it would be advisable to evaluate if there is any drop in numbers in terms of viewership and work out their media plans accordingly,” says Thomas.

    Havas Media Group CEO India and South East Asia Anita Nayyar says: “This will certainly affect everyone, be it companies, broadcasters, advertisers, ad agencies as it almost is a lockdown situation. Many organisations have announced work-from-home as well. The situation is scary and worrisome, for, if the consumer is contained everything related to him gets contained. Many have postponed important decisions on purchases which will lead to drop in sales leading to drop in advertising, which in turn will cause drop in spends and business for ad agencies, and hence for publishers and broadcasters.”

    “Media planners need to look at more efficient and effective ways—digital and OTT being one of them. This will also lead to an increase in viewership at home given home is the new work destination,” said Nayyar.

    On 15 March, in a joint meeting of Indian Motion Pictures Producers' Association (IMPPA)- Western India Film Producers' Association (WIPFA)- Indian Film and Television Producers Council (IFTPC)-Indian Film & Television Directors' Association (IFTDA)- Federation of Western India Cine Employees (FWICE) have taken a decision to stop shooting various Indian association bodies of television, directors and producers of films, TV serials and web series from 19 March 2020 till 31 March 2020.

    Appreciating the move by the associations Thomas says, “I personally feel that it’s a great move by these associations and governing bodies to take a break from shootings where a lot of people’s lives could be at risk due to the widely spreading epidemic.  As we all know our lives are more important than anything else right?  So, it’s a fantastic initiative and a great endeavor to break-the-chain.”

    Keeping in mind the health and safety of all concerned, ZEE will stop all shoots in the timelines stipulated in the directive. “In times where social distancing is the need of the hour to curb the outbreak of COVID-19 and people are spending more time indoors, the idea is to provide audiences with the most engaging entertainment for the entire family. Talks are still on to arrive at a strategy that ensures viewers have the best content to look forward to in the said period,” informed the broadcaster.

  • Bombay High Court reserves judgement in new tariff order amendment case

    Bombay High Court reserves judgement in new tariff order amendment case

    MUMBAI: The Bombay High Court has reserved the judgment in the case of the new tariff order amendments (NTO 2.0) as the hearing got over on Thursday. While the ambiguity still continues in the ecosystem, the court is expected to pronounce the judgment in a couple of days.

    According to sources close to the development, Telecom regulatory Authority of India (TRAI) cited the judgment by Justice Nariman of Supreme Court delivered in 2018 and judgment of Delhi HC from 2007 to support that it has full right to regulate broadcasters. It alleged that regulating bouquet formation and discounts is important because broadcasters use the same to push unwanted channels to consumers and are only interested in increasing their advertisement revenue.

    On the other hand, broadcasters argued that bouquets help to make large number of channels cheaper for consumers and also attempted to prove that due to competition from streaming services and telcos, regulation for broadcast TV ought to be reduced. As LCOs filed an independent writ petition asking for stay, they also argued that any attempt by TRAI to bring down NCF will kill their business.

    Meanwhile, Kerela HC hearing a matter from MSOs protesting against an effort to reduce NCF has also reserved its order and will pronounce it soon.

    As none of the high courts pronounced any clear order on interim relief, the amended regime came into play from 1 March. Among the DPOs, Tata Sky, Airtel, Dish TV, Siti Cable and IMCL have implemented NTO 2.0 and reduced their NCF.

  • Prasar Bharati sells MPEG-2 slot to 53 broadcasters

    Prasar Bharati sells MPEG-2 slot to 53 broadcasters

    MUMBAI: Prasar Bharati has successfully sold Free Dish’s MPEG-2 slots for the period from 01.04.2020 to 31.03.2021 through 44th online e-auction process to 53 broadcasters. The second annual e-Auction of MPEG-2 slots (44th e-auction) of DD Free Dish Platform was completed on 28 Feb 2020.

    Applications were received for e-auction under different Buckets/Genre. Subsequently, 53 channels were successfully allocated slots on various buckets on DD Free Dish slots. Subject to completion of all formalities, the channels which have successfully bid for slots will come on air on DD Free Dish Platform from 1 April 2020.

    Prasar Bharati CEO Shashi Shekhar Vempati says: “A key highlight of the e-auction was robust participation of channels across genres that saw several new channels making a debut enhancing the content diversity on DD Free Dish as a platform.”

    He further opined: “The increased competitiveness in the e-auction process is reflected in the substantial increase in bids over base prices across genres. DD Free Dish has emerged as a key enabler of competitiveness in the broadcast sector with new upstart channels challenging incumbents. Most significantly the nearly 50% growth in potential annual revenue from DD FreeDish is a key leading indicator on likely economic turnaround during FY 2020-2021.”

    Four slots were sold under bucket A+ with the reserve price of Rs 15 crore: Abzy Cool, Big Magic, Dangal, and Fun TV. The average slot price of the bucket was Rs 15.6 crore and the highest bid was Rs 15.16 crore. The A bucket was reserved for Rs 12 crore which was sold to 12 channels. The average bid price for the bucket was Rs 15.16 crore and highest bid price was Rs 15.2 crore. Under A bucket, ABZY Dhakad, ABZY Movies, B4U Kadak, B4U Movies, Blue, Cinema TV India, Enterr10, Maha Movie, Manoranjan TV, Movie Plus, Satya, and Surya Cinema reserved their place.

    Bucket B included All Music (Hindi) Channels, Sports (Hindi) Channels, GEC (Bhojpuri), Movies (Bhojpuri) and Teleshopping (Hindi) channels for the reserved price of Rs 10 crore. The pubcaster sold this slot to 16 channels- BDM GEC (Bhojpuri), Bhojpuri Cinema Movie (Bhojpuri), Big Ganga GEC (Bhojpuri), B4U Bhojpuri Movie (Bhojpuri), B4U Music Music (Hindi), Dabang Movie (Bhojpuri), Filamchi Movie (Bhojpuri), Manoranjan Grand Movie (Bhojpuri), Mastii Music (Hindi), MTV Beats Music (Hindi), Showbox Music (Hindi), Surya Bhojpuri Movie (Bhojpuri), Zee Biskope Movie (Bhojpuri), Zing Music (Hindi), 9X Jalwa Music (Hindi), and 9XM Music (Hindi). The average slot price was Rs 11.55 crore and the highest bid price was 12.25 crore.

    News & Current Affairs (Hindi) Channels, News & Current Affairs (English) and News & Current Affairs (Punjabi) Channels were included in Bucket C with the reserved price Rs 7 core. The pubcaster sold this slot to 13 channels: Aaj Tak, Aaj Tak Tez, ABP News, India News, India TV, NDTV, News Nation, News 24 Think First, News 18 India, Republic TV Bharat, TV9 Bharatvarsh, Zee Hindustan, and Zee News. The average price of Bucket C was Rs 10.85 crore and the highest bid was Rs 12.25 crore.

    All other remaining genre (language) channels and teleshopping (regional) channels were included in Bucket D with a reserved price of Rs 6 crore. Prasar Bharati sold this slot to five channels:  Fakt Marathi, Manoranjan Movies, Maha Punjabi, Shemaroo Marathibana, and Zee Punjabi. The average bid price of the bucket was Rs 6.17 crore and the highest bid price was Rs 6.25 crore.

    The Bucket R1 consisted of spiritual channels including channels promoting yoga, Ayurveda, Health & Wellness (Ayush) based on traditional methods, reserved for Rs 3 crore. The pubcaster sold this slot to three channels:  C7, Lord Budha, and Sadhana Bhakt. The average bid price for Bucket R1 was Rs 6.97 crore and the highest bid price was Rs 7.15 crore. 

  • NTO 2.0: Ambiguity persists as arguments continue in Bombay, Kerala High Courts

    NTO 2.0: Ambiguity persists as arguments continue in Bombay, Kerala High Courts

    MUMBAI: Ambiguity continues in the ecosystem with just one day left for the implementation of new tariff order amendments (NTO 2.0).

    On Friday’s hearing in Bombay high Court, no conclusion was reached regarding interim relief. The Telecom Regulatory Authority of India (TRAI) will continue its argument on Monday.

    According to sources close to the development, TRAI has been directed not to take any coercive step. Although there is no any conclusion yet, a decision will mostly be taken on Monday.

    Earlier, broadcasters’ argument was that the entire regime is set to kick in from 1 March. Since it is around the corner, they have moved the court seeking a stay. If they implement it before hearing, the entire petition becomes infructuous.

    In response to the argument, TRAI counsel said on Thursday that it’s not the entire amended interim regime that is kicking off from 1 March. The TRAI counsel added that broadcasters’ obligation to declare new prices became effective from 15 January, but they did not make any progress on it without any stay order. If they declare prices, then only other stakeholders in the industry will be able to comply with the regime, as TRAI noted.

    The Bombay High Court also asked TRAI to take instructions on deferment of NTO 2.0 as they did for the 2017 regime before the Madras High Court on Wednesday. After TRAI expressed its unwillingness to defer NTO 2.0, the hearing on interim stay started on Thursday.

    In another case, the Kerala High Court has passed an interim order directing the TRAI not to take steps that are detrimental to the interest of the All India Digital Cable Federation (AIDCF) members. Although on Friday’s hearing no judgement was passed for interim relief, the decision of interim protection has been reserved.

    In another development, Discovery has moved its petition to Delhi High Court which was heard today. The next hearing for the petition has been scheduled for 19 March.

  • Summer of IPL and a bonanza for the TV

    Summer of IPL and a bonanza for the TV

    MUMBAI: In Shaktigarh, a small town, on the outskirts of Burdwan, West Bengal, Ranjan Basu settles down in front of his TV set in his living room. It is all quiet outside, except for the chirping of crickets, as dusk settles. He picks up the TV remote, his finger pressed on the power button as his heart races with excitement.

    It’s the final of IPL 2019, featuring the Mumbai Indians and the favourites CSK.  He raises the TV’s volume and the family sits down to what they hope will be an evening of a heart-stopping cricket match. The commentary is in Bengali and the action keeps them on the edge of their seats. For the next four hours, they will be transported to another world, as they find themselves totally engrossed in the fascinating game of T20 IPL cricket on the ubiquitous medium in India: the television.
    The scenario is repeated all over the country: in the north, south and the west.

    In fact, IPL is the biggest unifier in India. The spectacular event has now become so integral to the socio-cultural narrative of the country during the last one decade that the fans of a particular team leave no stone unturned in showering their love on its players even if they are out of the hometown or the state. Moreover, people’s alacrity to watch the matches with a group on the big screen of TV is not showing any signs of receding.

    Even as the naysayers have been saying that television is yielding ground to streaming services, the facts prove otherwise. According to the KPMG report 2019, TV continues to be a critical mass entertainment medium and is expected to grow at a CAGR of 11.2 per cent between FY19 and FY24 on the back of strong viewership from rural and urban markets as well as continued investment in new regional channels and sports properties by broadcasters.

    According to the Broadcast Audience Research Council (BARC), television is the widest spread medium in India and one of the most watched pieces of content is sports, and more specifically, the IPL. The TV measurement body revealed that 462 million viewers watched last IPL, 12 percent up from the previous year.

    Not only did the number of viewers go up but engagement as well. IPL season twelve garnered 337.7 bn viewing minutes, a 13 per cent increase in live viewership. Along with cumulative reach, average time spent for the last season of IPL also went up by eight per cent, reaching 36.40 minutes.  It’s no wonder that sponsors and advertisers are getting more aggressive to make their presence visible during the league.

    Moreover, IPL is not anymore a man’s game. The marriage of entertainment and sports in the biggest cricket showbiz of the country also brought viewers across age groups and genders before TV sets. IPL 2019 saw the highest growth of viewership among kids (2-14 years), an increase of 25 per cent compared to last session. Even female viewership grew by 14 per cent during  the edition. More age groups coming to the League are also increasing the chances of new brand associations.

    According to a report by Velocity MR, brands which were not associated with any IPL teams but were advertising heavily during the tournament were seen to be doing better than brands which were associated with a particular team. As per this report, Swiggy and PhonePe are major instances of the brands which reaped benefit from the association with IPL as an advertiser. Total awareness went up by 8 per cent for Swiggy and by 10 per cent for PhonePe, as both the brands were heavily advertised or marketed during the IPL season.

    IPL 2019 went deeper into the hinterlands, too. Star’s gambit on regionalization paid rich dividends for the broadcaster. Last year,  there were dedicated Telugu, Kannada and Bangla sports channels for matches. According to BARC data, while viewing minutes in Hindi increased by 18 per cent, other regional languages including Tamil, Telugu, Malayalam, Kannada, Bengali and Marathi saw 10 per cent growth. Regional languages other than Hindi got 74.9 bn viewing minutes, which was higher than the viewership that the English language commentary got. We may see local brands trying to associate themselves with the League in coming time.

    Sports in general, and the IPL in particular, is a driver for cable TV and DTH subscriptions. While major DTH operators are trying to penetrate deep into TV dark areas, major tournaments like IPL drive that growth.

    IPL may have crossed a decade. But the excitement around the League is not ebbing. The brand value of the tournament went up to Rs 47,500 crores in 2019 from Rs 41,800 crores in 2018. With just a month or so left for the next season, we can only see the League shining even better.

  • NTO 2.0: Bombay High Court adjourns case to 26 Feb

    NTO 2.0: Bombay High Court adjourns case to 26 Feb

    MUMBAI: The Bombay High Court has adjourned the ongoing case between the Telecom Regulatory Authority of India (TRAI) and broadcasters on the new tariff order (NTO) to 26 February. During the last hearing , no interim relief had been granted.

    Last time, the advocate for TRAI made a statement at the very beginning that the arguments should be based only on the petition and not on the rejoinder. Countering that, the advocate for Film & TV Producers Guild of India stated that there is nothing new in the rejoinder and everything is available in public domain.

    He also touched upon the point of the newly imposed twin conditions levied in the amendment of new tariff order where one condition is the cap of Rs 12 in a bouquet, the other being the discount on channel bouquets to around 33 per cent.

    Earlier, broadcasters were giving higher discounts pursuant to cross subsidies available by including smaller channels in its bouquets, which was totally in favour of consumers. He argued that if a consumer has to watch the so-called popular/niche channels (terms used by TRAI), he has to pay a higher price and it will increase his monthly bill.

    He also continued that although they do not come under the direct purview of TRAI, the amendments in the tariff order can affect their revenue. As the regulatory body has put a cap of Rs 12 on pay channel that can be included in a bouquet, the broadcaster cannot charge more than Rs 12 for that pay channel in a bouquet.

    The broadcaster has to pay huge amount to acquire content. Due to the regulations, if the broadcaster is not able to include it in a bouquet, it may prefer not to acquire such high priced content. Moreover, if broadcasters can not acquire quality content, the customer will lose.

    While broadcasters have the flexibility to decide the price of its pay channel and the customer should be able to view quality content on his TV, both these conditions are violated by the order.

    Last month, the Indian Broadcasting Foundation (IBF) along with others has filed a writ petition in the Bombay High Court against the TRAI order. The petitioners mentioned that the as amendments which has been notified in “consumer interest," will have exactly the opposite effect, leading to crippling of the business of broadcasters and ultimate suffering of the consumer.

  • NTO 2.0 case: No interim relief granted, to be heard on 12 Feb

    NTO 2.0 case: No interim relief granted, to be heard on 12 Feb

    MUMBAI: The Bombay High Court has listed the next hearing of the ongoing case between the Telecom Regulatory Authority of India (TRAI) and broadcasters on the new tariff order (NTO) on 12 February. No interim relief has been granted yet which can be argued at the next hearing. It has also been directed to issue a notice to Maharashtra advocate general.

    During Thursday’s hearing, the advocate for TRAI made a statement at the very beginning that the arguments should be based only on the petition and not on the rejoinder. Countering that, the advocate for Film & TV Producers Guild of India stated that there is nothing new in the rejoinder and everything is available in public domain.

    He also touched upon the point of the newly imposed twin conditions levied in the amendment of new tariff order where one condition is the cap of Rs 12 in a bouquet, the other being the discount on channel bouquets to around 33 per cent.

    Earlier, broadcasters were giving higher discounts pursuant to cross subsidies available by including smaller channels in its bouquets, which was totally in favour of consumers. He argued that if a consumer has to watch the so-called popular/niche channels (terms used by TRAI), he has to pay a higher price and it will increase his monthly bill.

    He also continued that although they do not come under the direct purview of TRAI, the amendments in the tariff order can affect their revenue. As the regulatory body has put a cap of Rs 12 on pay channel that can be included in a bouquet,  the broadcaster cannot charge more than Rs 12 for that pay channel in a bouquet.

    The broadcaster has to pay huge amount to acquire content. Due to the regulations, if the broadcaster is not able to include it in a bouquet, it  may prefer not to acquire such high priced content. Moreover, if broadcasters can not acquire quality content, the customer will lose.

    While broadcasters have the flexibility to decide the price of its pay channel and the customer should be able to view quality content on his TV, both these conditions are violated by the order.

    Earlier in the month, the Indian Broadcasting Foundation (IBF) along with others has filed a writ petition in the Bombay High Court against the TRAI order. The petitioners mentioned that the as amendments which has been notified in “consumer interest," will have exactly the opposite effect, leading to crippling of the business of broadcasters and ultimate suffering of the consumer.

  • Subscribers’ DTH/Cable bills to go down by 14% for a-la-carte channels: ICRA

    Subscribers’ DTH/Cable bills to go down by 14% for a-la-carte channels: ICRA

    MUMBAI: The recent Telecom Regulatory Authority of India (TRAI) amendments over tariff charges could potentially lower the direct-to home (DTH)/ cable bills of the subscribers up to 14 per cent from the present levels, a credit rating agency ICRA said in an analytical report.

    According to a press statement, ICRA said that the amendment encourage subscribers to exercise their right to choose and opt for a-la-carte channels. TRAI on 1 January 2020 amended some provisions of the Telecommunication (Broadcasting and Cable) Services (Eight) (Addressable Systems) Tariff Order, 2017.

    The amendments are slated to come in effect from March 1, 2020.

    The Tariff Order released in 2017 had allowed the subscribers to choose the nature of channels as free to air (FTA) or pay channel as well as declare a-la-carte pricing of all channels.

    However, contrary to TRAI’s expectations, the rating agency said, given the high channel pricing of the popular general entertainment channels (GECs) and sports channels (with 66 of the 330 existing pay channels being priced at the ceiling rate of Rs. 19 per month).

    This move by broadcaster had tarnished the very purpose of the Tariff Order, resulting in up to 23% surge in bills for subscribers, ICRA estimated, and continued the dominance of bouquets in the subscription patterns.

    ICRA’s vice president Kinjal Shah said, “The recent amendments will adversely impact the broadcasters, revenues, the subscription revenues are also expected to reduce (as subscription charges for a-la-carte channels will reduce and due to the expected shift of subscribers from bouquets to a-la-carte selection).”

    Shah further said, “Furthermore, given the reduction in the number of channels that can be offered in a bouquet (for a given price), bundling of non-popular channels with established ones will reduce, thereby impacting their reach and thus advertisement revenues for the broadcaster. This, however, would eventually lead to an increased focus on content quality.”

    TRAI in the amendment of 2017 tariff order has also increased the channel offerings for the network capacity fee (NCF) of Rs. 130 (excluding taxes) per month to 200 standard definitions (SD) (pay or FTA) channels from the present 100 SD channels.  

    The amendments are expected to be a mixed bag of positives and negatives for DPOs. The overall reduction in NCF and the cap on NCF to be charged for additional TVs in a multi-TV home is negative for the DPOs.

    TRAI has, however, allowed DPOs to offer different NCF across geographical regions (state / district / towns) as well as offer promotional schemes (on NCF / Distributor Retail Price – DRPs), up to 90 days at a time, twice in a calendar year. DPOs are additionally allowed to offer discounts on NCF / DRPs for long-term subscription plans.  

    ICRA’s assistant vice president Sakshi Suneja, said, “After the recent changes in the tariff, the prices of popular GECs and sports channels are expected to reduce from Rs. 19 per month to Rs. 12 per month, given the revised ceiling rates for a-la-carte channels, to be included in bouquets.”

    “The amendments also seek to improve the attractiveness of a-la-carte channels, by reducing discounts that can be offered on bouquet pricing to 33% (vis-a-vis a-lacarte prices, from the existing average levels of discounts of 40-54%),” Suneja said.

    She pointed out that through the introduction of two new conditions: i) capping the maximum retail price (MRP) of a-la-carte channel that can be included in a bouquet to up to three times of the average MRP per month of a pay channel of that bouquet and ii) MRP, per month, of a pay channel to not exceed the MRP, per month, of the bouquet containing that pay channel.

  • Edelweiss bearish on Q3 performance of media industry

    Edelweiss bearish on Q3 performance of media industry

    MUMBAI: Financial services conglomerate Edelweiss is bearish on the third-quarter performance of the media industry. The firm has predicted it to be one of the toughest quarters for the industry with a  decline in both revenue and EBITDA. The report has also suggested that ad growth of broadcasters is likely to be under severe pressure due to an economic slowdown and high base while subscription revenue growth for broadcasters is likely to remain robust owing to the new tariff order (NTO).

    The report anticipates ZEEL’s Q3 revenue, EBITDA and PAT to decline by 5 per cent, 22 per cent and 21 per cent YoY respectively. It has also predicted advertisement revenue to decline owing to the economic slowdown, cutback in ad spends by large categories like consumer goods, auto, telecom and retail and withdrawal from the FreeDish platform. However, it belives subscription revenue growth to remain roboust owing to the tailwind from NTO and viewership gains in portfolio channels.

    “Amidst this challenging environment, we expect ZEEL's revenue to decline 5 per cent YoY, with domestic ad revenue declining 13 per cent (on a base of 22 per cent) and subscription revenue growing ~19 per cent YoY (on a base of 29 per cent). We expect EBITDA margin to contract ~630bps YoY owing to decline in ad revenues,” it added.

    It anticipates SUN TV Network’s Q3 EBITDA and PAT to decline by 12 per cent, 26per cent and 15 per cent  YoY respectively. Sun TV Network’s ad growth likely to be impacted by the broad-based ad slowdown and increased competition in regional markets. On the other hand, subscription revenue growth is likely to remain robust in the quarter as well.

    "Overall, we anticipate SUN TV’s revenue growth to decline 12 per cent YoY on account to dwindling ad revenue and absence of movie release (blockbuster movie in the base – Sarkar). Advertising growth for the business is expected to decline by low to mid double digit YoY. Subscription growth expected to be 16 per cent in Q3FY20 on a base of 24 per cent (9 per cent growth in DTH; 40 per cent in cable). The production business did not have any releases this quarter. We estimate EBITDA to decline 26 per cent in the wake of weak ad revenue growth and increased investment in fresh programming for SUN NXT and other tele channels,” the report adds.

    At the same time, it predicts a flattish performance of DTH operator Dish TV as well. Moreover, the pressure on subscriber addition and ARPU is predicted to remain given stress in rural economy and migration of customers to the FreeDish platform. Overall, a fall of 4 per cent qoq in both revenue and EBITDA, while ARPU is likely to decline at Rs 108, as per Edelweiss estimates.

    After a transform change last year with the roll out of NTO, the Telecom Regulatory Authority of India (TRAI) has released a few amendments to the new price regime very recently. While the proposed changes are beneficial for customers, broadcasters’ subscription growth could slow down due to the price revision as the financial services group suggests at the same time.

    While the amendments are consumer friendly, the report suggests that the new guidelines can lead to reduction in end-consumer ARPUs owing to the constraints placed on – bouquet discounting , price-linked bouquet inclusion of channels, and cap on the network capacity fee. However for broadcasters, this could lead to slowdown in the subscription revenue growth in the NTO as the prices are likely to come down.

    “On the flipside, we might also see – i) increased offtake of channels due to the downward price revision. ii) Migration of FreeDish customers to pay TV which could partially offset the slowdown in subscription revenues,” it adds.

    “Q4FY20 to be impacted marginally due to these amendments as they are effective from 1 March 2020. Overall, this is likely to be potentially negative for broadcasters given – ad revenue growth has been sluggish and resumption looks challenging; larger portion of growth for broadcasters in FY20 had been driven by the subscription revenues. However, in the long run, this would have a positive impact for the  broadcasters, as this reduces the OTT migration risk by reducing the price differential,” Edelweiss points out. 

  • NTO 2.0 will affect viability of pay TV industry: IBF

    NTO 2.0 will affect viability of pay TV industry: IBF

    MUMBAI: The broadcast sector has expressed its shock and dismay with the latest notification from TRAI issued on 1 January 2020, amending the new tariff order (NTO) and interconnection regulations. Indian Broadcasting Foundation (IBF) believes that both the amendments will severely impair broadcasters' ability to compete with other unregulated platforms and adversely affect the viability of the pay TV industry.

    "IBF is disappointed at the lack of understanding shown by the regulator. It will strategise its future course of action, including evaluating legal options, based on feedback from its member channels and networks," said the body.  

    The association in its response to TRAI's consultation paper had pleaded with the regulator to adopt a "soft touch" and allow the industry to come to terms with the NTO before making further changes. "In fact, TRAI itself had acknowledged this need by proposing a two year moratorium on further regulation. It appears all IBF's pleas have been ignored. Unfortunately, in this exercise, content creators and owners have been disempowered and the entire authority has shifted to the middlemen," expressed IBF.

    IBF has conveyed that these changes will have very significant and industry growth-hampering ramifications for the broadcast sector. At a time when the economic environment is tough, this tariff order will force a lot of channels to shut down and will lead to unemployment in the sector. While the government is looking at ramping up growth, these changes will have the opposite effect for the broadcast sector just recovering from the twin shocks of NTO in the first half of 2019 and the ad slowdown business.

    IBF said that it has always believed that consumers pay for the value of the content. Post NTO, the ecosystem had just settled down with about 200 million consumers choosing their favourite channels. "We have to allow the changes to fully settle down and the market forces to prevail while resisting the temptation to continuously tinker with the regulation. The Regulator’s intent was to address infirmities in the NTO, however, it has been done solely at the cost of the broadcasting fraternity," said IBF.   

    In the last 15 years of regulating the broadcast sector TRAI has issued more than 36 tariff orders and ancillary regulations in an attempt to micromanage what is arguably the cheapest form of news and entertainment in the world. This goes contrary to the government's stated position of ensuring the "ease of doing business". While TRAI claims the amendments are in the consumers’ interest, it appears to have conveniently forsworn the interest of broadcasters. This change will only benefit the DPOs as they have been allowed to charge as much as Rs 160 for the channels that are supposed to be ‘FREE’.

    "As per the new amendments, TRAI has reduced the cap on the MRP of individual channels, which can form part of any bouquet, to Rs 12 per month, from the earlier cap of Rs 19. Less than a year ago, TRAI itself determined that the price per channel can be Rs 19, which has now been reduced to Rs 12 without giving any logical reason. Thus making the change totally arbitrary," said IBF.  

    It also said, "Over-regulation, inconsistency and frequent changes in the regulations by the regulator has already cost the broadcast sector 10-12 million TV subscribers as per various industry estimates in 2019. These amendments will compound the problem further."