With more television channels coming up, direct-to-home (DTH) players are now planning to impose carriage fees on broadcasters for using their platforms.
The fee is likely to be charged by the existing players as well as those likely to step into the space in future. High carriage fees have become a significant source of revenues for signal providers or multi-system-operators (MSOs) in the cable industry.
According to DTH officials, a DTH company incurs huge technical costs for infrastructure, maintaining the billing system and encryption technologies. DTH players have limited number of transponders and can carry limited channels. So, it makes sense for a DTH player to charge carriage fees from broadcasters.
Industry insiders believe that the forthcoming broadcasters are likely to follow the free-to-air model for DTH platform. According to experts, most of the upcoming channels will be pay channels in the cable market. However, they can follow the free-to-air model on the DTH platform. Under this business model, channels pay carriage fees or placement charges or technical fees.
“As far as carriage fees or placement charges are concerned, figures have gone through the roof. Cable networks have started asking for huge amount of placement or carriage fees as there is a squeeze in the bandwidth”, said Gurjeev Singh Kapoor, the head of the SET-Discovery platform.