As the deadline for the digitisation of the cable-TV sector nears, CNBC-TV18 spoke to representatives of all the three parties concerned- multi-system operators (MSOs), broadcasters and the DTH community.
Ashok Mansukhani, president, MSO Alliance, calls the TRAI order "completely baseless and unfair". He explains that MSOs will have to spend heavily on encryption and increasing capacity.
"Unlike overseas, boadcasters don't share ad revenues with MSOs. Providing 500 channels is a tough call for small and independent operators," he retorted.
Presenting the broacasters' views, KVL Narayana Rao, director, Indian Broadcasting Federation (IBF), says that the carriage fee will severely burden news broadcasters.
"Broadcasters will no be unable to set aside funds for business development and content generation." Rao adds that the broadcasters were assured that the carriage fee would be removed and says that the association has appealed to TRAI and the government to reconsider the order.
Amidst both parties venting ire on the TRAI order, DTH representative
RC Venkateish, CEO, Dish TV maintained a positive note. He said that TRAI had struck a balanced note and was extremely fair. "I don't see any reason for why all this hullabaloo is being made."
Below is the edited transcript of the discussion. Also watch the accompanying videos.
Q: What is your view on concerns by News Broadcaster’s Associations about TRAI order?
Venkateish: TRAI has struck a very fine balance with its regulations and the recommendations. It clearly says that where a platform or a multi-system operator approaches a channel for its content, then there is no question of carriage. On the other hand, when the channel approaches the platform to be carried then the concept of carriage applies. It is extremely fair and I don’t see any reason for why this entire hullabaloo is being made.
Q: As far as, viability of this sector is concerned, NBA says that this recommendation unfairly penalises the broadcast industry and threatens its survival, is that a justified statement?
Manuskhani: Completely baseless and unjustified. Today, most of the distributing cable and companies who have digitalization have about 200 channel capacity. We have voluntarily agreed to start with 200 and we will have to go up to 500 by January.
The total number of channels actually telecast in India is under that.
Therefore, if every channel is available in a 500-channel capacity by January, the question that arises is that, we have had to spend huge sums of money to encrypt channels, create 500 channel capacities, provide two million boxes, 24 hour call centers, billing etc and then work with broadcasters to create a viable subscription model.
In the present scenario, it means that free to air networks which otherwise ride on advertisement platforms don’t really share their advertisement revenue with MSO’s or with DTH companies like it’s done aboard in the form of local ads and so on or local inserts.
On the other hand, TRAI want a ban on carriage fees when there is actually a very fair carriage regulation that has already been brought into place.
Q: What are the immediate negatives if at all that you have seen in the TRAI orders?
Manuskhani: The deadline of 500 channels is okay for National Multi-System Operators like the ones that belong to MSO alliance. 500 channels is a tough call even by next April for smaller operators or independent cable operators in different parts of the country.
It is possible to have 500-channel viewership in national or bigger cities, but difficult is small towns. This should have been left to market forces.
Q: This very comment about market forces and how we should perhaps not end up over regulating this entire sector. Do you share any concerns with what the TRAI has ordered and do you think there is scope for it being relooked at a later stage once this current regime is put in practice?
Venkateish: The TRAI has done a commendable job of balancing the interest of all the stakeholders. Market forces works in an efficient market environment and environment in media industry is not necessarily efficient because content providers and distribution platforms who have some sort of monopoly over their things.
In such a scenario, there are always possibilities of market failure because if two broadcasters have an exclusive content and the distribution provider has a exclusive distribution then the potential for adversity and conflict always exists. Therefore, the regulator has to play a very important role in maintaining and ensuring that there is no market failure.
The regulator has always in this particular regulation tried to step a fine line and opened up the competition at the retail end where there is genuine competition.
We have seen that in DTH. All six DTH providers are competing against each at the consumer end and therefore the consumer’s end is protected, but at the input end where there are monopolies and possibility of market failures the regulator has stepped in to regulate.
Q: The distributors say that TRAI recommendations are good and the practice of carriage fees is essential. The NBA on its part is distressed by the move, why is that?
Rao: We welcome digitization and it is something that we have been asking for several years. The government and TRAI have done the right thing by coming out with digitisation rollout plan and the relevant orders that will allow it to take place.
However, we are distressed that the problem of carriage fee continues. Carriage has burdened broadcasters, in particular news broadcasters very severely over the last few years. It constitutes a third of our total cost. We are unable to keep aside revenues for development of our channels, business and generation of good quality content. We were assured that carriage would be removed. So, to that extent we are very distressed.
Q: Do you intend to take this order head on or challenge the order?
Rao: I don’t think we need to go to a court at this moment and I hope that will not arise. We have appealed; we have urged the government and TRAI to relook at the order, issue more clarifications, what exactly they have in mind when they say a carriage fee would need to be paid before we can react.
At this moment it is very open ended. It just says it will continue, while they say that it is because investments have to be made into digitisation and therefore carriage must continue. The fact is, its very open ended and without any kind of a time limit. It’s difficult for us to understand what exactly they mean and what they have in mind. At this moment it appears that the problem and the burden continues and that is very worrying.
Source
Ashok Mansukhani, president, MSO Alliance, calls the TRAI order "completely baseless and unfair". He explains that MSOs will have to spend heavily on encryption and increasing capacity.
"Unlike overseas, boadcasters don't share ad revenues with MSOs. Providing 500 channels is a tough call for small and independent operators," he retorted.
Presenting the broacasters' views, KVL Narayana Rao, director, Indian Broadcasting Federation (IBF), says that the carriage fee will severely burden news broadcasters.
"Broadcasters will no be unable to set aside funds for business development and content generation." Rao adds that the broadcasters were assured that the carriage fee would be removed and says that the association has appealed to TRAI and the government to reconsider the order.
Amidst both parties venting ire on the TRAI order, DTH representative
RC Venkateish, CEO, Dish TV maintained a positive note. He said that TRAI had struck a balanced note and was extremely fair. "I don't see any reason for why all this hullabaloo is being made."
Below is the edited transcript of the discussion. Also watch the accompanying videos.
Q: What is your view on concerns by News Broadcaster’s Associations about TRAI order?
Venkateish: TRAI has struck a very fine balance with its regulations and the recommendations. It clearly says that where a platform or a multi-system operator approaches a channel for its content, then there is no question of carriage. On the other hand, when the channel approaches the platform to be carried then the concept of carriage applies. It is extremely fair and I don’t see any reason for why this entire hullabaloo is being made.
Q: As far as, viability of this sector is concerned, NBA says that this recommendation unfairly penalises the broadcast industry and threatens its survival, is that a justified statement?
Manuskhani: Completely baseless and unjustified. Today, most of the distributing cable and companies who have digitalization have about 200 channel capacity. We have voluntarily agreed to start with 200 and we will have to go up to 500 by January.
The total number of channels actually telecast in India is under that.
Therefore, if every channel is available in a 500-channel capacity by January, the question that arises is that, we have had to spend huge sums of money to encrypt channels, create 500 channel capacities, provide two million boxes, 24 hour call centers, billing etc and then work with broadcasters to create a viable subscription model.
In the present scenario, it means that free to air networks which otherwise ride on advertisement platforms don’t really share their advertisement revenue with MSO’s or with DTH companies like it’s done aboard in the form of local ads and so on or local inserts.
On the other hand, TRAI want a ban on carriage fees when there is actually a very fair carriage regulation that has already been brought into place.
Q: What are the immediate negatives if at all that you have seen in the TRAI orders?
Manuskhani: The deadline of 500 channels is okay for National Multi-System Operators like the ones that belong to MSO alliance. 500 channels is a tough call even by next April for smaller operators or independent cable operators in different parts of the country.
It is possible to have 500-channel viewership in national or bigger cities, but difficult is small towns. This should have been left to market forces.
Q: This very comment about market forces and how we should perhaps not end up over regulating this entire sector. Do you share any concerns with what the TRAI has ordered and do you think there is scope for it being relooked at a later stage once this current regime is put in practice?
Venkateish: The TRAI has done a commendable job of balancing the interest of all the stakeholders. Market forces works in an efficient market environment and environment in media industry is not necessarily efficient because content providers and distribution platforms who have some sort of monopoly over their things.
In such a scenario, there are always possibilities of market failure because if two broadcasters have an exclusive content and the distribution provider has a exclusive distribution then the potential for adversity and conflict always exists. Therefore, the regulator has to play a very important role in maintaining and ensuring that there is no market failure.
The regulator has always in this particular regulation tried to step a fine line and opened up the competition at the retail end where there is genuine competition.
We have seen that in DTH. All six DTH providers are competing against each at the consumer end and therefore the consumer’s end is protected, but at the input end where there are monopolies and possibility of market failures the regulator has stepped in to regulate.
Q: The distributors say that TRAI recommendations are good and the practice of carriage fees is essential. The NBA on its part is distressed by the move, why is that?
Rao: We welcome digitization and it is something that we have been asking for several years. The government and TRAI have done the right thing by coming out with digitisation rollout plan and the relevant orders that will allow it to take place.
However, we are distressed that the problem of carriage fee continues. Carriage has burdened broadcasters, in particular news broadcasters very severely over the last few years. It constitutes a third of our total cost. We are unable to keep aside revenues for development of our channels, business and generation of good quality content. We were assured that carriage would be removed. So, to that extent we are very distressed.
Q: Do you intend to take this order head on or challenge the order?
Rao: I don’t think we need to go to a court at this moment and I hope that will not arise. We have appealed; we have urged the government and TRAI to relook at the order, issue more clarifications, what exactly they have in mind when they say a carriage fee would need to be paid before we can react.
At this moment it is very open ended. It just says it will continue, while they say that it is because investments have to be made into digitisation and therefore carriage must continue. The fact is, its very open ended and without any kind of a time limit. It’s difficult for us to understand what exactly they mean and what they have in mind. At this moment it appears that the problem and the burden continues and that is very worrying.
Source
