MUMBAI: The network capacity fee (NCF) and channel prices announced by broadcasters and distributors as per the Telecom Regulatory Authority of India’s (TRAI) new guidelines could increase the monthly bill of most subscribers of television channels.
Trai’s new regulatory framework for broadcasting and cable services industry is intended to usher in transparency and uniformity, and will afford far greater freedom of choice to viewers.
According to Crisil Ratings, more than 90 per cent of TV viewers flip 50 or fewer channels, and the new rules will let them subscribe to what they want and not be saddled with channels they are not interested in.
Crisil’s analysis assumes a scenario where subscribers opt for the top 10 channels by viewership in addition to the free-to-air (FTA) ones. The regime, which came into effect on February 1, 2019, will benefit popular channels and hasten adoption of over-the-top platforms or content providers who stream media over the internet, such as Netflix and Hotstar. This will be a mixed bag for viewers and distributors.
“Our analysis of the impact of the regulations indicates a varied impact on monthly TV bills. Based on current pricing, the monthly TV bill can go up by 25 per cent from Rs 230-240 to Rs 300 per month for viewers who opt for the top 10 channels, but will come down for those who opt upto top 5 channels,” said Sachin Gupta, senior director, Crisil Ratings.
It noted that the new regime could drive consolidation in the broadcasting industry because content will clearly be the king and key differentiator. Subscription revenues of broadcasters would rise 40 per cent to Rs 94 per subscriber per month compared with Rs 60-70 now.
With viewers likely to opt for popular channels, large broadcasters will have greater pricing power. Conversely, broadcasters with less-popular channels will find it tough to piggyback on packages, and the least popular ones will hardly have a business case and could go off air, the agency added.