Despite Trai directive to pay for what you watch, annual bills for cable higher than apps.
The Telecom Regulatory Authority of India (Trai) might have allowed cable and direct-to-home (DTH) viewers the freedom to only pay for and watch the channels they choose, but despite this, their annual bill will still be higher compared to watching those same channels on OTT apps like Hotstar, Zee5 and Sony LIV.
Trai’s new regulatory framework for cable operators and broadcasters ensures that from February this year subscribers can choose their favourite channels and pay only for the selected ones as against the earlier system of paying for a bundle of channels that were being pushed at a fixed rate.
Although the new framework brings in more transparency, uniformity and offers more freedom of choice for viewers, a simple calculation of the price of watching the channels offered by Hotstar, Zee5 and Sony LIV and comparing them with the prices offered by cable and DTH operators shows that OTT apps are cheaper.
It’s important to note that app users would be consuming this content on their mobile data or WiFi data, the charges for which would be additional. With data prices hitting rock bottom, an average WiFi connection costs around Rs 1,000 per month and a regular mobile phone postpaid bill is in the range of `400-900. Hence, even after adding the data charges, the monthly bill would rise to only about Rs 3,500 a month.
For keeping the calculation simple and making the cost of watching the channels on OTT apps vis-a-vis cable TV comparable, FE considered only those 17 channels that a subscriber can easily watch on these apps by paying the premium content charge, and compared it with the prices offered by cable and DTH operators.
For instance, a consumer can opt for the premium content option in Hotstar, Sony LIV and Zee5, which comes at an annual cost of Rs 999, Rs 499 and Rs 999, respectively. So in effect, a consumer will pay a total of Rs 2,497 per year and will be able to watch all the content on these 17 channels like Star Sports, Star World, HBO, Star Plus, Zee TV, Zee Cinema, &flix, &pictures, Sony Set, SAB, SET Max, Pix, etc.
Now, if a subscriber chooses these same 17 channels on their cable or DTH connection, he/she will end up paying Rs 430.70 per month, which translates into an annual cost of Rs 5,168.40. The cable bill is higher as the payment to the service provider has two parts, first is the Network Capacity Fee (NCF) of Rs 130 per month and the second one is price of any pay channel that is selected.
Another point to be noted is that for calculating the NCF in case of pay SD/HD channels, every SD channel is counted as one channel, while every HD channel is counted as two channels.
The Rs 130 charge for NCF is the maximum that can be charged and it offers 100 standard definition (SD) channels, including 25 free-to-air (FTA) channels. A subscriber for an extra Rs 20 will be able to view an additional 25 SD channels. Operators usually offer discounts to subscribers on NCF. Consumers have the freedom to choose 75 SD channels within the prescribed NCF and these could be in a la carte free to air (FTA) or pay channels or a bouquet of pay channels, etc.
A simple calculation on Trai’s channel selection website, where one chooses the same 17 channels in SD format that are offered by Hotstar, Zee5 and Sony LIV shows that the price for these comes to Rs 235 per month. Adding the NCF of Rs 130 (in case no discount is there) and the GST (18%) of Rs 65.70 brings the total cable bill to Rs 430.70 per month.