Hmmm.... Firstly Hi Friends & Members, it feels good to be back here to interact & share information with all of you. Just like the DTH industry, we have also grown up & matured as people or interms of knowledge regarding various things. Hope to have a great time as interesting times are ahead for us with lots of options to chose or explore.
Coming back to this topic, though i had made a return to the forum couple of days back & wanted to present my perspective on this but i thought it was better for facts to come out before making assumptions on basis of rumours.
So after carefully analyzing & researching i have understood where the issue lies and here is the explanation
- Sony had signed a 3 year fixed deal with Tata Sky back in 2015 when their DTH subscriber base was 10 million while Sony had a bouquet of 13 channels. Now in 2018, Tata Sky has subscriber base of 16 million while Sony's channel bouquet comprises of 32 channels, Sony has not increased price of their channels but all they are "rightfully" demanding from Tata Sky is that as there is a significant increase in number of people opting for their channels + they have added new channels in its bouquet hence there needs to be a proportionate increase in revenue they receive from operator.
- Now let's see Tata Sky's reasoning, they are saying that if they adhere to Sony's terms then they would be forced to increase prices. This logic seems to be completely flawed bcoz firstly their revenue has gone up not only bcoz of expansion of subscriber base but on a periodic basis their prices have seen upward trend which they clearly claimed to us was bcoz of addition of new channels on the platform. So when Sony is asking for revision in revenue sharing agreement they are totally entitled for that. On a number of occasions CEO of Tata Sky has expressed that they believe in strengthening the broadcaster as only when they have more money then they can invest in good quality content so why this hesitation now? Vadi bro had stated few days back that Tata Sky charges a premium from us but shares minute part of it with broadcasters, well can't say that's completely correct based on past situation but surely they are doing this at present.
- Finally there is a major factor which might be making Tata Sky uneasy in present situation, Reliance Jio is about enter in broadband market where they will offer Giga TV services too at very low prices. When this happens DTH operators will be forced to offer massive discounts to its subscribers in order to retain them. If Tata Sky signs new fixed deals at higher cost with broadcasters then the losses they would have to incur in forthcoming situation will also widen so they have decided to hold their foot strong without backing out. Also right now Tata Sky has retained few channels from Sony Pictures Networks India on basis of RIO or A-La-Carte as its referred to in regular usage, under this option operator has to pay much more on channels being opted on per subscriber basis to the broadcaster though i must make it clear that as per New TRAI Tariff Order this has considerably reduced bit still hard bet for Tata Sky. This is the reason they are not reducing prices.
Let's wait n watch, final verdict by Honourable Supreme Court Of India regarding TRAI Tariff Order will also change certain outcomes which i will discuss at later stage. OTT has dried up top layer ARPU for Tata Sky as most people in urban areas are consuming international content on various apps while Jio will further lead to tough times, if DTH prices go any further up then middle income people will shift back to digital cable while lower middle class + poor are already consuming content thru DD Free Dish. Hope for the best, for long we have been charged more & high time that some normalcy returns, not keen on a major price war as giving things free reduces quality like it happened in telecom sector. Each stakeholder has important role to play & balance needs to be maintained for healthy growth
I am not joking.
