Broadcasters, MSOs lock horns over carriage fees

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New Delhi, Nov 18 : There is a fight brewing between the multi-system operators(MSOs) and the broadcasters on nonpayment of predetermined carriage fees (the price that channels pay so that their content is carried on the distributor’s platform) by broadcasters to the cable operators.

Although the MSOs haven’t yet declared war, they allege that broadcasters have violated their contractual obligation with the cable operators and have gone back on their promises to pay carriage fees, which have been quoted in the legal documents that both parties have signed. The broadcasters have apparently cited the sudden liquidity crunch brought about by the economic slowdown as the apparent reason for non-payment.

The MSOs further claim that the broadcasters have not made payments for the services that have already been rendered. When contacted Ashok Mansukhani, President, MSO Alliance confirmed that a problem of the above nature has sprouted between the broadcasters and the MSOs. However he clarified that the MSOs are looking at an amicable solution and will soon initiate talks with the Indian Broadcasting Foundation (IBF) seeking a resolution of the issue.

Asked whether MSOs may seek legal recourse, which lies well within their rights, another MSO also told FE “Not as our first line of action.” MSOs say that broadcasters have been religiously enforcing collection of their share of subscription fee from them and this may now create an lopsided liquidity problem arising out of a one sided liquidity flow-from distributors to broadcasters.

There are two way documents signed between the distributors like DTH and cable service providers on one hand and broadcasters on the other after long negotiations.

Such agreements often decide how much subscription fees the broadcasters will earn from the distributors and how much the players in distribution will earn from broadcasters as the cost of showcasing their content vis a vis the content of another channel.