Remove price cap and channel bundling restrictions: Broadcasters tell TRAI

Industry lobby responds to regulator's consultation paper on the New Tariff Order (NTO 2.0) in the sector.

The country’s leading broadcasters, including Disney-Star, Zee Entertainment, Viacom-18, Sun TV and Sony Pictures Networks India, have urged the Telecom Regulatory Authority of India (Trai) to deregulate broadcast tariff and remove restrictions on channel bundling.

Submitting their recommendations under the aegis of the Indian Broadcasters and Digital Foundation (IBDF) — an apex body — on Thursday, the broadcasters said they should be allowed to offer discounts on both a-la-carte and bouquet offerings rather than operating under a price cap on channels.

The recommendations were made in response to a consultation paper floated by Trai to address issues related to the implementation of the New Tariff Order (NTO 2.0) in the broadcast sector.

Under NTO 2.0, Trai has reduced the cap on the maximum retail price of individual channels that can be part of a bouquet to Rs 12 from Rs 19 per month. 

The order also sets conditions for the formation of channel bouquets.

Seeking a “forbearance model” instead of price regulation, IBDF said a-la-carte and channel bouquets were different offerings that catered to different target audiences. Bundling is a globally acceptable business practice, which would be adversely affected by price ceilings, the body said.

“It is reiterated that market forces of demand and supply are the best parameters for determining the price of channels, and broadcasters seeking to ensure the highest market penetration will be incentivised to invest in high quality content and to price the same competitively. Market forces will also ensure that these prices remain stable,” it said.

IBDF also pointed to the drop in the time spent by consumers on linear TV by 8 per cent in 2021 from 2020 levels to drive home its point of tariff deregulation. 

“There is, hence, a need felt to implement commercial decisions to retain and eventually increase viewership. Such decisions will require flexibility in pricing and offering of channels,” the body said.

Last week, TRAI had extended the deadline for the implementation of NTO 2.0 for broadcasters to November 30. Earlier, NTO 2.0 was supposed to be implemented from June 1. 

It has faced a wall of opposition from broadcasters as well as direct-to-home (DTH) operators.