At a time when the Indian Premier League (IPL) is round the corner, around 20 million television viewers may have to spend extra to watch the cricket league as three major multi-system cable operators –DEN Networks, Hathway Cable & Datacom and GTPL Hathway – have intimated subscribers about removing Star Sports and other channels of Star from their basic plans effective April 1. The development can also lead to a regulatory intervention if the consumers choose to approach the sector regulator, Telecom Regulatory Authority of India (Trai).
Under broadcasting regulations consumers have the right to demand from their cable or DTH operators the channels they want to view. If the consumers as a group move to Trai complaining that the cable operators concerned have removed some channels from their base pack, the regulator is likely to direct them to restore the channels.
The removal of Star channels, especially Star Sports by the Reliance Industries-owned operators from their base plans will cost their subscribers about 15-20% higher as they will have to upgrade their subscription plans in order to watch the sports and general entertainment channels from Star.
The development assumes significance in the sense that currently Disney Star owns the rights of IPL for television, whereas Reliance-owned Viacom18 owns digital media rights. Further, Reliance will also stream IPL free on its JioCinema OTT app. Now, the removal of channels from the base packs by Reliance-owned cable operators could affect the viewership of Star as majority of the people might not upgrade their packs and switch to OTT, according to some experts. Recently, the television channel prices were increased by 15-20% based on the new tariff order (NTO 3.0).
Currently, GTPL has a Power Lite Pack of `325 which includes 65 pay channels, including general entertainment channels from other broadcasters like Zee, Sony, Viacom18’s Colors etc and sports channels of other brands, whereas entertainment and sports channels of Star are part of the `375 plan now, according to the information available on the GTPL’s website.
Hathway, Den, and GTPL Hathway could not be reached out immediately for comments.
“These companies might have been seeing the opportunity to increase their Arpu (average revenue per consumer) by removing Star Sports from the bundled offering,” said Karan Taurani, senior vice-president at Elara Securities. “The move can have both positive as well as negative impacts on Star. If subscribers buy A-La-Carte or individual channel to watch IPL or upgrade their subscription plans, Star will also benefit from the increased revenues,” Taurani said.
Currently, A-La-Carte channels have an 8% subscription rate, whereas 92% subscribers prefer bouquet. Broadcasters get around 35-40% revenue from subscriptions.
According to Taurani, consumers can ask the cable operators about what channels they want to get included in their bouquet plans and based on the guidelines, the operators will have to do that. However, consumers are not proactive and there is a lack of awareness, he added.
According to some market analysts, Jio is trying for migration from television to digital. The company is strategically offering IPL based on the perception that television is on decline. Viacom18 (which is a major broadcaster and owns 38 television channels) is also maintaining that subscribers prefer digital to television, they said.
“There has been a decline in Pay TV subscriptions. The trend is especially visible in the viewership of the Indian Premier League, with a drop of 45 million viewers between 2020 and 2022 on traditional linear TV, as more and more viewers have transitioned to streaming services,” Viacom18 Sports said in a post on LinkedIn. “Looking ahead, it is expected that Tata IPL will attract a staggering 500 million digital viewers on Jio Cinema,” Viacom18 Sports said.
While there has been some shift from TV to OTT, but experts do not believe it will lead death of the television industry.
According to a survey by YouGov last year, 83% subscribers prefer consuming sports content on television due to factors such as ability to watch on a big-screen (compared to smartphones/tablets), superior audio/video quality, fewer number of distraction such as push-notifications on smartphones.