Discussion TRAI announced important changes in the Tariff Order

[Rajat Basak]

TRAI now restricted discounts to 33.33% on boutiques? or any thing?

Yes now it's restricted to 33.33%. But no reflection on their new RIO. Most probably they are going to fight again.

 

[Elvin Paul]

TRAI now restricted discounts to 33.33% from 15% on boutiques? or any thing?

A friendly reply, noticed many times, it's bouquet and not boutique.

 

[KGF]

Yes now it's restricted to 33.33%. But no reflection on their new RIO. Most probably they are going to fight again.

Its not the new RIO.

 

[IamTRoy4]

But no reflection on their new RIO.

because the RIO they've published is based on 2018 Tarrif Order, not the new 2020. So assuming that broadcasters already planned to publish this RIO last year, BUT outtanowhere TRAI came with NTO 2020. So they need to work again.

 

[Elvin Paul]

Imagine the heat of discussion by broadcasters on new amendment now. Whether to kick out so called premium from bouquets or to reduce price. Whatever may be the change it's gonna make a severe impact on their future. To foresight or forecast the market now is painstaking.

They thought everything would be fine by publishing a new tariff card on New year. Sony even planned to grab some extra bucks as they put many ₹15 - ₹17 items to the maximum of ₹19. TRAI just outperformed them and released the NTO days before their release. Now all those work by broadcasters are like a line on water or of short life.

 

[Siva]

No. Trai withdrew that case from supreme court so broadcasters can give discounts without any restriction..

TRAI tariff order: Supreme Court respite for broadcasters

TRAI withdrew the case because Supreme Court got frustrated with their petition again, after a judgement was already passed upholding the entire order, including the bouquet discount!

By the way, It was explained many times on this thread that the RIO released by various broadcasters recently is as per the old Tariff Order (i.e. The one before 01-01-2020). You keep saying the same thing that those are as per the new Tariff Order (Released by TRAI on 01-01-2020). Which part of it is not clear for you?

 

[satyajeet]

upholding the entire order, including the bouquet discount!

Never got this point that why TRAI didnt implement NTO in full. why they left out discount regulation because NTO was upheld in full by SC injudgement.. TRAI never explained reason for leaving it out earlier. I guess some under table arrangement for leaving out discount regulation as 15% from start would have allowed less space for broadcasters. Now they doing 33% i.e. too little and late. Again it will cause huge churn. Such disruption and uncertainity consecutive years, not healthy at all

 

[Siva]

Never got this point that why TRAI didnt implement NTO in full. why they left out discount regulation because NTO was upheld in full by SC injudgement.. TRAI never explained reason for leaving it out earlier. I guess some under table arrangement for leaving out discount regulation as 15% from start would have allowed less space for broadcasters. Now they doing 33% i.e. too little and late. Again it will cause huge churn. Such disruption and uncertainity consecutive years, not healthy at all

The problem was the Madras HC judgement. They upheld the entire order while dismissing the bouquet discount clause. Appeal to SC was made by the broadcasters on the judgement that was opposite to them i.e. the rest of the order, except the discount, Because they won on the discount clause in the HC. And SC upheld the regulatory powers of TRAI, that the broadcasters appealed against, and didn't specifically say anything about the bouquet discount in the judgement, except for a reference buried inside somewhere. Then TRAI filed an SLP, and later it was "Dismissed as withdrawn". TRAI also didn't push on this further, as they wanted to get the NTO rolled out first and they probably knew they can amend it later, after observing the market. Now, they have a year's worth of data and their argument will be stronger, even if they need to battle legally, as the broadcasters' tactics with the bouquets being in public for a year. Below is what TRAI had mentioned about this in the order, there are more statements, but only quoting the parts related to the SC judgement.

While recognizing the need for prescribing a cap on the sum of the a-la-carte price of the channels forming part of the bouquet, Hon’ble Supreme Court did not pass any order in this regard. TRAI filed an SLP before the Hon’ble Supreme Court challenging the above said decision of the Hon’ble Madras High Court, however, the same was dismissed as withdrawn on 03.01.2018 by the Apex Court.

6. As mentioned in the consultation paper, the Hon’ble Madras High Court declared that the capping of price of bouquets at 85% of the sum of a-la-carte prices of the pay channels, as provided for in the third proviso to clause 3(3) of the Tariff Order 2017, is arbitrary and un-enforceable. However, Hon’ble Madras High Court upheld the power of TRAI to regulate the broadcasting services. An appeal was filed in Hon’ble Supreme Court against the judgment of Hon’ble High Court of Madras in this matter. Hon’ble Supreme Court in its judgment dated 30.10.2018 while considering the limited question of TRAI’s powers to regulate broadcasting services, inter-alia observed that subscribers are forced to take bouquets if the a-la-carte rates of the pay channels are much higher. In this regard, Para 37 of the judgment dated 30.10.2018 is reproduced below:

It can thus be seen that both the Regulation as well as the Tariff Order have been the subject matter of extensive discussions between TRAI, all stake holders and consumers, pursuant to which most of the suggestions given by the broadcasters themselves have been accepted and incorporated into the Regulation and the Tariff Order. The Explanatory Memorandum shows that the focus of the Authority has always been the provision of a level playing field to both broadcaster and subscriber. For example, when high discounts are offered for bouquets that are offered by the broadcasters, the effect is that subscribers are forced to take bouquets only, as the a-la-carte rates of the pay channels that are found in these bouquets are much higher. This results in perverse pricing of bouquets vis-à-vis individual pay channels. In the process, the public ends up paying for unwanted channels, thereby blocking newer and better TV channels and restricting subscribers’ choice. It is for this reason that discounts are capped. While doing so, however, full flexibility has been given to broadcasters to declare the prices of their pay channels on an a-la-carte basis. The Authority has shown that it does not encroach upon the freedom of broadcasters to arrange their business as they choose. Also, when such discounts are limited, a subscriber can then be free to choose a-la-carte channels of his choice. Thus, the flexibility of formation of a bouquet, i.e., the choice of channels to be included in the bouquet together with the content of such channels, is not touched by the Authority. It is only efforts aimed at thwarting competition and reducing a-la-carte choice that are, therefore, being interfered with…...”(emphasis provided)

7. While recognizing the need for prescribing a cap on the sum of the a-la-carte price of the channels forming part of the bouquet, Hon’ble Supreme Court did not pass any order in this regard. TRAI filed an SLP before the Hon’ble Supreme Court challenging the above said decision of the Hon’ble Madras High Court, however, the same was dismissed as withdrawn on 03.01.2018 by the Apex Court.

 

[Siva]

Advertising is heavily affected on niche channels. Almost no brand ads on Sony's Sports and Viacom's English channels. Only showing in house promotion. I don't follow much broadcasters. I can assure you it's badly affected them as well. Hence, price reduction is a bad decision. TV channels already had to compete against OTT. Now they have to be desperate for advertising as well. Low subscription revenues plus lack of advertising interested will result in shutdown.

Advertising was heavily impacted by the economic slowdown. It's the first thing that gets impacted and the last thing to recover when the economy slows. Blaming the NTO completely for the effect on advertising doesn't make sense. It might have had some impact due to the reduced subscription revenue of the niche channels, but such users have already been using OTT for long, even before the NTO. ZEEL CMO seemed very happy with the NTO, which shouldn't be the case if it affected them negatively! She also ruled out any competition against OTT for both subscription and ad revenue. Subscription revenues were up by 46% for ZEEL after the NTO and it's the same case with most of the major broadcasters.

You can read part of her interview here.

New Trai order is unlocking value in TV sector; find out how

You can google for her interview with various media houses and read all she said on the NTO. In all of them, she was in total support of the NTO.

 

[Mathan810]

Before the 2019 NTO, a HD subscriber used to pay twice for the same channel (once to SD version and once to HD version). On top of that if you happen to be a Tatasky customer, you end up paying 260 rs more. Isn't that ridiculous.

If the content production/acquisition costs are so high, let the broadcasters take those channels out of the bouquets and price them as alacarte channels at 19 (or even 190).

This new amendment doesn't stop the broadcasters from doing that. So why do they have to cry foul?

Really? Before the NTO 2019 I used to get all Tamil channels and 40 HD channels for Rs.219 with recorder subscription included in it. But today I'm paying Rs.234 for Tami FTA channels and just 4 HD channels. Surprised to hear that bills have come down.