MUMBAI: The government is currently putting together relevant rules on the Digital Addressable System (DAS) - set to roll out in phases from July 1, 2012 - under which it will be mandatory for all viewers to get a digital set-top box, and for operators to distribute channels in a digital and addressable format. This will give viewers a wider choice of channels with better viewing quality.
Industry experts have said that critical measures such as making the "must carry" of all private TV channels mandatory and disallowing carriage fees under digitization would revive the sick TV broadcast industry.
Digitization is now being seen as the game changer for the entire Indian TV industry as it will also significantly benefit distributors - the multi-system operators (MSOs) and local cable operators (LCOs), whose paying base will improve even further.
The TV distribution market, at 146 million households, is already the third largest in the world, with pay TV penetration at 80% - much higher than in most other countries. This last mile of distributors (also very fragmented at over 60,000) are also very cash rich because they pocket Rs 16,000 crore out of the Rs 20,000 crore paid by viewers. Only Rs 4,000 crore reaches the pay TV channels.
Hence, unlike most sectors of the economy, which have flourished under economic liberalization, the TV channels' revenue model has fallen apart as cable operators and distributors create an artificial bandwidth shortage so that they can carry channels as per their own whims, demanding usurious and anti-competitive, ransom-like carriage fees from broadcasters.
These practices have deprived the government of huge amounts of revenue through taxes, (estimated at more than Rs 10,000 crore per annum), which the TV channels would otherwise have paid to the exchequer, leading to the creation of a black economy.
These factors, along with under-declaration of subscribers by cable operators and low tariffs for pay channels, have bled most TV channels in India over the years, with the result that more than nine-tenths of the industry is currently hemorrhaging profusely. Moreover, some cable operators are owned by broadcasters and squeeze direct competitors with carriage fees, which is both anti-competitive and an abuse of power.
Industry experts say that the correct regulations in tandem with the introduction of DAS would be the tipping point for the Indian TV broadcast industry, and listed, among others, the mandatory carriage of all channels, stopping carriage fees and regulation of tariffs as measures that are necessary to revive a veritable sick industry within a few years.
They said the first step would be to ensure that digitized distributors are mandatorily equipped to carry the maximum number of channels, including using the latest compression technologies (universally recognized as at least 999 channels). Hence, the attempt of any distributor to under-equip itself must be seen as an attempt to subvert the intention of digitization.
The second measure necessary was to ensure that the "Must Carry" proviso is now introduced in tandem with the "Must Provide" proviso so that both are enforced equally in a time bound manner. While Trai rules currently mandate that the broadcaster must provide his channel to the distributor within 60 days of a request on a non-discriminatory manner. This delay must be reduced to less than 30 days to give consumers the access to their choice, without delay. It is critical that Trai must, in turn, protect the rights of the broadcasters and mandate that all distributors must carry the channels specified too not later than 30 days from the date of the request, in a similarly non-discriminatory manner. The "Must Carry" proviso was especially necessary given common ownership between channels and distribution platforms, to avoid abuse of power.
All TV channels, which have been granted a downlink licence by the government, have a right to be viewed by virtue of that licence. Sources said it was imperative that channels must be carried. It is necessary in the larger consumer interest, a "basic pack" should be created, consisting of mainstream channels in English, Hindi and the relevant regional language channel. Viewers should be able to choose channels a la carte as they wish.
The fourth and the most critical requirement, industry sources said, is for a total ban on carriage and placement fees (the money demanded by distributors to carry the channel and get it a favourable frequency band). This is nothing but a "ransom demand", totally against the transparent regime as mandated by Trai. Once the commercial terms based on marketplace determinants had been decided between the TV channel and the carrying platform, there could not be any scope for carriage or placement fees, directly or indirectly.
TOI
Industry experts have said that critical measures such as making the "must carry" of all private TV channels mandatory and disallowing carriage fees under digitization would revive the sick TV broadcast industry.
Digitization is now being seen as the game changer for the entire Indian TV industry as it will also significantly benefit distributors - the multi-system operators (MSOs) and local cable operators (LCOs), whose paying base will improve even further.
The TV distribution market, at 146 million households, is already the third largest in the world, with pay TV penetration at 80% - much higher than in most other countries. This last mile of distributors (also very fragmented at over 60,000) are also very cash rich because they pocket Rs 16,000 crore out of the Rs 20,000 crore paid by viewers. Only Rs 4,000 crore reaches the pay TV channels.
Hence, unlike most sectors of the economy, which have flourished under economic liberalization, the TV channels' revenue model has fallen apart as cable operators and distributors create an artificial bandwidth shortage so that they can carry channels as per their own whims, demanding usurious and anti-competitive, ransom-like carriage fees from broadcasters.
These practices have deprived the government of huge amounts of revenue through taxes, (estimated at more than Rs 10,000 crore per annum), which the TV channels would otherwise have paid to the exchequer, leading to the creation of a black economy.
These factors, along with under-declaration of subscribers by cable operators and low tariffs for pay channels, have bled most TV channels in India over the years, with the result that more than nine-tenths of the industry is currently hemorrhaging profusely. Moreover, some cable operators are owned by broadcasters and squeeze direct competitors with carriage fees, which is both anti-competitive and an abuse of power.
Industry experts say that the correct regulations in tandem with the introduction of DAS would be the tipping point for the Indian TV broadcast industry, and listed, among others, the mandatory carriage of all channels, stopping carriage fees and regulation of tariffs as measures that are necessary to revive a veritable sick industry within a few years.
They said the first step would be to ensure that digitized distributors are mandatorily equipped to carry the maximum number of channels, including using the latest compression technologies (universally recognized as at least 999 channels). Hence, the attempt of any distributor to under-equip itself must be seen as an attempt to subvert the intention of digitization.
The second measure necessary was to ensure that the "Must Carry" proviso is now introduced in tandem with the "Must Provide" proviso so that both are enforced equally in a time bound manner. While Trai rules currently mandate that the broadcaster must provide his channel to the distributor within 60 days of a request on a non-discriminatory manner. This delay must be reduced to less than 30 days to give consumers the access to their choice, without delay. It is critical that Trai must, in turn, protect the rights of the broadcasters and mandate that all distributors must carry the channels specified too not later than 30 days from the date of the request, in a similarly non-discriminatory manner. The "Must Carry" proviso was especially necessary given common ownership between channels and distribution platforms, to avoid abuse of power.
All TV channels, which have been granted a downlink licence by the government, have a right to be viewed by virtue of that licence. Sources said it was imperative that channels must be carried. It is necessary in the larger consumer interest, a "basic pack" should be created, consisting of mainstream channels in English, Hindi and the relevant regional language channel. Viewers should be able to choose channels a la carte as they wish.
The fourth and the most critical requirement, industry sources said, is for a total ban on carriage and placement fees (the money demanded by distributors to carry the channel and get it a favourable frequency band). This is nothing but a "ransom demand", totally against the transparent regime as mandated by Trai. Once the commercial terms based on marketplace determinants had been decided between the TV channel and the carrying platform, there could not be any scope for carriage or placement fees, directly or indirectly.
TOI
