In rift over TV channel tariff hike, millions of viewers bear the brunt

On an average, a TV channel bouquet bill of Rs 350 per month will rise 20% to Rs 420 per month.

tv, trai
Consumers are now hoping for some understanding between the two sides, especially with the Indian Premier League (IPL) scheduled to start next month. (Image: Representational)

Millions of cable TV consumers on Saturday suddenly lost access to their favourite shows on Zee, Star, and Sony channels, despite having paid the monthly recharge fee. This was because their cable TV operators did not agree to raise channel rates under the new tariff order (NTO 3.0) that came into effect on February 1.

Cable TV distribution companies such as as Reliance Industries-owned Hathway Cable, GTPL Hathway, and DEN Networks argue that the raising rates of TV channel bouquets and individual channels would lead to a loss of consumers, while broadcasters say the hikes are not so steep as to affect the consumer base.

Consumers are now hoping for some understanding between the two sides, especially with the Indian Premier League (IPL) scheduled to start next month. On Sunday, many complained about the issue on Twitter, tagging the ministry of information and broadcasting, department of telecommunications, and the Telecom Regulatory Authority of India (Trai).

“This is for your information that my cable TV service provider has stopped the channels. Kindly look into the the matter and take stringent action action against cable TV service provider,” one such consumer, Vaibhav Kumar Tiwari, tweeted at the authorities.

Currently, direct-to-home (DTH) operators such as Dish TV and Tata Play have complied with NTO 3.0, while most cable TV operators who are members of the All India Digital Cable Federation are yet to do so. Those who have not complied with the order have around 40 million subscribers out of the total base of around 140 million DTH and cable TV users.

The cable federation said in a statement that sector regulator Trai “being aware of this disconnection notices has not taken any steps to ensure that cable TV subscribers are not inconvenienced”.

With the tariff hikes, a consumer who was earlier paying `49 per month for a Star Hindi Super Value Pack with 15 channels will now pay Rs 54 for a bouquet of 16 channels. Broadcasters offer different channel bouquets, with charges over and above the mandatory Rs 130 or Rs 160 per month network capacity fee (NCF) paid by consumers to their operators. Based on the NCP plan chosen, a consumer gets 100 or 220 free channels.

On an average, a TV channel bouquet bill of Rs 350 per month will rise 20% to Rs 420 per month. Individual channel prices are steeper than the hike in the bouquets, cable operators said.

In a recent letter to minister of information and broadcasting Anurag Thakur, local cable TV operators (LCOs) said they have lost nearly 15,000 customers each in the last three years due to the increase in price and becoming uncompetitive with the OTT applications and Free Dish. “The number of LCOs has also reduced significantly in the last three-four years from 1.2 million to nearly 700,000 now, wherein many of our peers have migrated to other businesses and left the cable TV business.”

However, a report by the Broadband India Forum (BIF) and Consumer Unity & Trust Society (CUTS) in August last year said that while people have turned to OTT platforms, especially since the pandemic, television viewership is still higher than that of OTT platforms. According to the report, 70% of consumers said television offers value for money, as compared to 27% in the case of digital/OTT platforms.

“First, this is not a steep hike given the fact it is coming after such a long time and considering the inflation and our increasing cost of content. Second, today cost of shifting to an OTT platform is way higher than TV because that also involves internet expenses,” a representative of television broadcasters said, adding that the price hikes are essential to prevent advertisers from taking hold of content.

Currently, broadcasters such as Sony, Star, and others get 70% of their revenues from advertisements and 30% from subscriptions. “We cannot let the channel TV prices come down to zero, because in that case advertisers may take hold of content,” a government official said on the condition of anonymity.

There is also the matter of content with large costs. For instance, Star bagged the rights to broadcast IPL on TV for `23,575 crore — around `60 crore per match.

“There is a huge content cost involved and banking only on advertisers is not going to work in the favour of the company that bagged the TV rights, especially when Viacom 18 has offered to stream IPL for free on the Jio Cinema app,” an executive of a leading TV broadcasting company said.

“If cable TV operators do not hike the tariffs, they will start losing consumers because of absence of services. The move is going to affect only them,” the executive said.

The new pricing regime came into effect on February 1 following a Trai order in November. All India Digital Cable Federation has challenged the order in the Kerala high court and asked for relief from notices related to disconnections issued by broadcasters. The matter is listed for hearing on Monday.

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First published on: 20-02-2023 at 02:05 IST
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