Blackout: Why has the broadcaster-cable operator fracas come to a head?

The issue has been fermenting since TRAI raised the price cap for a TV channel from Rs 12 to Rs 19

Over a third of cable and satellite homes in India have been missing popular channels from Star, Sony and Zee networks since Saturday, following channel pricing issues with cable operators. The issue exposes the fault lines in the television broadcasting industry. A look at what the fight is all about.

What has led to the blackout of channels by some of the country's top broadcasters?

Channel pricing is a tenacious issue in the television broadcasting market in India. Cable operators maintain that top networks tend to dictate pricing terms to them owing to the popularity of their channels, while broadcasters say that cable operators under-declare their subscriber base resulting in loss of subscription revenue to them.

This particular matter had been fermenting for a few months now, after the Telecom Regulatory Authority of India (TRAI) amended the new tariff order (NTO) 2.0 (now called NTO 3.0) in November 2022, restoring the price cap for a television channel, which is part of a bouquet, to Rs 19 from Rs 12 earlier.

What kind of tug of war has this caused?

Cable operators led by the All India Digital Cable Federation (AIDCF) say that this increase from Rs 12 to Rs 19 for a TV channel will lead to sharp price hikes and that the domestic cable and satellite market is price sensitive.

Its members have, therefore, not signed agreements with the said broadcasters over channel pricing. The price hikes, says AIDCF, could vary from 25 to 30 per cent for some channels, going up to 60 per cent in the case of others.

The Indian Broadcasting and Digital Foundation (IBDF), on the other hand, says that the price rise is to the tune of 5-15 per cent only, coming after four years. Also, IBDF says that the actual disconnection happened only after serving notices to cable operators who had not signed agreements with them.

What is the picture on the ground?

Due to the friction, some 45 million cable homes now do not have Star, Sony and Zee network channels. While the matter is being heard in court, the blackout could result in a shift in cable consumers to direct-to-home (DTH), according to some experts.

As it is, the pay TV market in India is said to be declining, with some experts saying that the pay TV base in India stands at about 108 million homes. Others, such as Karan Taurani, senior vice-president-Research at brokerage Elara Capital, say that the number is about 125 million currently. This constitutes around 74 per cent of the total TV households of 170 million in India.

Will the current impasse come to an end?

The hope is that it will after the intervention of the Kerala High Court on Monday.

Experts hope that cable operators and broadcasters can find common ground when it comes to channel pricing, so that cable subscribers do not suffer blackouts.

As such, cable homes in Mumbai end up paying Rs 550 per month for around 1,000 channels. This includes free-to-air as well as pay channels plus local channels from cable operators. DTH consumers also pay a similar amount, according to media industry sources.