1 year down the lane, Freeze on Pricing remains in place for NTO 2.0 non-compliant broadcasters

The Bombay High Court heard arguments in February and March 2020 at length for six days before reserving its order for plea on interim relief.

Estimated reading time: 3 minutes, 36 seconds

Exactly 425 days back, the Telecom Regulatory Authority of India (TRAI) came out with the NTO 2.0 amendments on January 1, 2020 in a bid to reduce the inflated monthly bills of Cable and DTH users. The leading broadcasters assembled in a jiffy in a presser against the NTO 2.0 amendments followed by a legal challenge. The Bombay High Court heard arguments in February and March 2020 at length for six days before reserving its order for plea on interim relief. The same was expected to be pronounced shortly in March 2020 before the pandemic entered the scenario sending the country into a lockdown.

While NTO 2.0 largely remains unimplemented due to the impasse between broadcasters and TRAI, Tata Sky on 28th February 2020 started implementing NTO 2.0 by cutting down on Multi TV NCF which was followed by other pay DTH operators complying with NTO 2.0 amendments in the first week of March 2020 itself. Cable TV operators largely remained undeterred and chose not to make changes given the cold feet from broadcasters who largely refused to declare NTO 2.0 pricing.

Yet few pay-broadcasters including Mavis Satcom, CSL Infomedia, Odisha Television, and IN10 Media declared NTO 2.0 RIO before March 2020. The rest refrained waiting for Bombay HC’s order which never came thanks to COVID-19. Amidst the lockdown, Sony Pictures Network India started streamlining its offerings by first shutting down Sony MIX, Sony ESPN, and Sony ESPN HD in March 2020 followed by AXN and AXN HD shut down in June 2020.

The shut-down of pay-channels bundled in existing bouquets forced SPN to slash the existing bouquet prices to compensate for the shutdown resulting in a hole in the subscription revenue amidst the pandemic.

The Big 4 broadcasters namely Star India, Zee Entertainment, TV18 Broadcast, and Sony Pictures Network India apart from Discovery India had come up with fresh RIOs to be implemented from March 2020 carrying revised offerings with price hike in range of 10-15%.

The RIOs went in deep freeze thanks to the NTO 2.0 impasse. Even though the Bombay High Court reserved its order in the NTO 2.0 case it never stayed the implementation of NTO 2.0. Things stood at a standstill during the pandemic with zero chatter whatsover. Star India delayed its expansion of channels and offerings and held back on shut down of certain channels while others stay put due to status quo.

The inability to push new RIO left SPN high and dry with bouquet pricing taking a hit due to shut down of multiple pay channels. The broadcaster attempted to discontinue certain lower-priced bouquets in a bid to increase its subscription revenue which led to opposition from distribution platform operators. The regulator stepped in cracking the whip and directing broadcasters to comply with NTO 2.0 amendments by publishing compliant RIOs by 10th August 2020. ZEEL and TV18 moved back Bombay HC which told TRAI not to take any coercive action while the hearing went on.

Lex Sportel Vision and Suryansh Broadcasting joined the league of NTO 2.0 compliant broadcasters post TRAI’s nudge to broadcasters in July 2020.

The Bombay High Court later in October 2020 reserved its verdict after finishing the arguments. The verdict remains awaited to date with TRAI believed to have nudged the High Court recently to pronounce the verdict.

While broadcasters are still free to launch channels, shut down channels, and rebrand channels by amending RIO, there is an effective freeze on price due to the status quo restraining broadcasters from bundling newly launched channels into existing bouquets or from revising the bouquet prices in the upward scale or discontinuing lower-priced bouquets.

Star India attempted to push its new RIO from October 2020 but again met opposition from distribution platform operators who ended up complaining to TRAI and subsequently TRAI warned Star India against any attempt to push NTO 2.0 non-compliant RIOs.

WarnerMedia has recently had to slash bouquet price by upto 40-50% in response to HBO, HBO HD, and WB shut down that has forced it to compensate viewers for the shut down. Even if the broadcaster wanted to revise its bouquet prices it cannot do so unless it falls in line with NTO 2.0 regulations.

The status-quo continues to drag on and here we are into 2021. The freeze on pricing has undoubtedly affected Big 4’s plans to bump up subscription revenue this fiscal year and probably will affect the next fiscal year as well. How long this impasse will drag on is something the Bombay High Court can only answer.

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Avatar of Basil Kannagi Arasu
Basil Kannagi Arasu

News Reporter

Basil likes to cover the latest happenings in the Media and Entertainment Industry in India. You can always find him browsing his phone.

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