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The Telecom Regulatory Authority of India (TRAI) has asked broadcasters to provide details of all free-to-air (FTA) channels, premium channels, maximum retail price (MRP) of pay and premium channels, as well as bouquets of pay channels and their rates, by 1 March as per the draft tariff order issued by the regulator.
The Telecommunication (Broadcasting and Cable Services) (Eighth) (Addressable Systems) Tariff Order, 2016 will enter into force from 1 April 2017. It will be applicable to television broadcasting and cable services provided to subscribers through addressable systems.
Broadcasters have to provide names, genre, language and relevant geographical area of all FTA channels they provide. They also have to provide name, MRP, genre, language and relevant geographical area of each pay and premium channel they offer. The list of all bouquets of pay channels offered with the MRP of each bouquet, indicating the names of all the pay channels, will also have to be provided.
They will need to disclose whether the pay channels are pay channels in the whole country or only in some parts of the country. This is because TRAI has provided broadcasters the flexibility to fix different MRPs for different geographical areas within the genre ceiling.
Further, broadcasters will have to provide ad revenue details to TRAI for each financial year in 90 days from the end of that financial year.
Broadcasters are also required to provide details of introduction, conversion, discontinuation, or change of channel or bouquet 90 days prior to such change.
As per the new tariff order, the TV channel operators will have to declare the MRP of channels to the consumers. The tariff order will come into force on 1 April.
The draft tariff has come almost nine months after TRAI had issued the consultation paper on the matter. The authority has invited comments from stakeholders on the draft tariff order by 24 October.
Broadcasters to price channels to the consumers
Broadcasters will price their channels to the consumers, both at the a la carte and at the bouquet level. Their subscription revenue will depend on that.
TRAI is of the view that prescribing of MRP by the broadcasters to consumers will self-regulate the pricing of the pay channels as higher price will reduce the number of customers for such channels, thereby impacting ad revenue.
However, the MRP of channels will be subject to genre-wise price caps prescribed by TRAI. The authority has prescribed seven genres under which broadcasters can price their channels.
Genre price cap
As per the genre caps prescribed by TRAI, sports channels have the highest MRP cap at Rs 19. General entertainment channels have a ceiling of Rs 12. The ceiling for movie channels is Rs 10. Kids and infotainment channel cannot be priced above Rs 7 and 9 respectively. The cap for news channels is Rs 5 while that for devotional channels is Rs 3.
Broadcasters will have to publish the MRP of their pay channels on their websites, report to TRAI and also inform all the distributors of TV channels. The MRP must be visible to all the customers in the electronic programme guide (EPG).
MRP of bouquets
Broadcasters can offer channels on a la carte basis or in the form of bouquets and declare the MRP, excluding taxes, of such bouquets to be paid by the subscriber. The MRP of bouquets should not be less than 85% of the sum of MRP of the a la carte pay channels forming part of the bouquet.
15% permissible discount to distributors of TV channels
In order to ensure that the price of the a la carte channel is kept reasonable, the authority has prescribed maximum permissible discount of 15% that a broadcaster can offer to distributors of TV channels.
Distributors can’t alter composition of bouquets of broadcasters
The bouquets offered by the broadcasters to subscribers will have to be provided by the distributors of TV channels to the subscribers without any alteration in composition of the bouquets.
TRAI has refused to permit forbearance at the wholesale-level tariff as there is not enough competition. It noted that though there are presently 48 broadcasters providing 275 pay channels, there is no effective competition among them.
Broadcasters are allowed to combine pay channels of their subsidiary company or holding company, or subsidiary company of the holding company. The companies should have TV channel licences in their names.
Geographical market pricing of channels allowed
Broadcasters are also permitted to declare a channel as pay in one geographical market and FTA in another geographical market. The MRP bouquets of pay channels in a relevant geographical area will have to be uniform for all distribution platforms in that area.
Price of HD channel can’t exceed 3 times that of corresponding SD channel
While premium channels are under price forbearance, TRAI has also prescribed a price cap for HD channels. Broadcasters will be free to declare any of its channels as ‘premium’ irrespective of content and format.
The cost of an HD channel should not exceed three times the cost of a corresponding SD channel. The formula has been derived from the fact that one HD channel occupies the bandwidth of 2–3 SD channels.
Price of HD channel with no SD variant
For HD channels that have differential content from its SD variant, the price ceiling will be three times the ceiling on the retail price of that genre.
For now, the regulator has left cloned channels untouched. However, it has stated that broadcasters or distributors of TV channels should not bundle a cloned channel with the original channel in the same bouquet and that consumers should have the option to select their preferred language.
TRAI asks broadcasters to submit channel list and pricing by 1 Mar 2017 | TelevisionPost.com
The Telecommunication (Broadcasting and Cable Services) (Eighth) (Addressable Systems) Tariff Order, 2016 will enter into force from 1 April 2017. It will be applicable to television broadcasting and cable services provided to subscribers through addressable systems.
Broadcasters have to provide names, genre, language and relevant geographical area of all FTA channels they provide. They also have to provide name, MRP, genre, language and relevant geographical area of each pay and premium channel they offer. The list of all bouquets of pay channels offered with the MRP of each bouquet, indicating the names of all the pay channels, will also have to be provided.
They will need to disclose whether the pay channels are pay channels in the whole country or only in some parts of the country. This is because TRAI has provided broadcasters the flexibility to fix different MRPs for different geographical areas within the genre ceiling.
Further, broadcasters will have to provide ad revenue details to TRAI for each financial year in 90 days from the end of that financial year.
Broadcasters are also required to provide details of introduction, conversion, discontinuation, or change of channel or bouquet 90 days prior to such change.
As per the new tariff order, the TV channel operators will have to declare the MRP of channels to the consumers. The tariff order will come into force on 1 April.
The draft tariff has come almost nine months after TRAI had issued the consultation paper on the matter. The authority has invited comments from stakeholders on the draft tariff order by 24 October.
Broadcasters to price channels to the consumers
Broadcasters will price their channels to the consumers, both at the a la carte and at the bouquet level. Their subscription revenue will depend on that.
TRAI is of the view that prescribing of MRP by the broadcasters to consumers will self-regulate the pricing of the pay channels as higher price will reduce the number of customers for such channels, thereby impacting ad revenue.
However, the MRP of channels will be subject to genre-wise price caps prescribed by TRAI. The authority has prescribed seven genres under which broadcasters can price their channels.
Genre price cap
As per the genre caps prescribed by TRAI, sports channels have the highest MRP cap at Rs 19. General entertainment channels have a ceiling of Rs 12. The ceiling for movie channels is Rs 10. Kids and infotainment channel cannot be priced above Rs 7 and 9 respectively. The cap for news channels is Rs 5 while that for devotional channels is Rs 3.
Broadcasters will have to publish the MRP of their pay channels on their websites, report to TRAI and also inform all the distributors of TV channels. The MRP must be visible to all the customers in the electronic programme guide (EPG).
MRP of bouquets
Broadcasters can offer channels on a la carte basis or in the form of bouquets and declare the MRP, excluding taxes, of such bouquets to be paid by the subscriber. The MRP of bouquets should not be less than 85% of the sum of MRP of the a la carte pay channels forming part of the bouquet.
15% permissible discount to distributors of TV channels
In order to ensure that the price of the a la carte channel is kept reasonable, the authority has prescribed maximum permissible discount of 15% that a broadcaster can offer to distributors of TV channels.
Distributors can’t alter composition of bouquets of broadcasters
The bouquets offered by the broadcasters to subscribers will have to be provided by the distributors of TV channels to the subscribers without any alteration in composition of the bouquets.
TRAI has refused to permit forbearance at the wholesale-level tariff as there is not enough competition. It noted that though there are presently 48 broadcasters providing 275 pay channels, there is no effective competition among them.
Broadcasters are allowed to combine pay channels of their subsidiary company or holding company, or subsidiary company of the holding company. The companies should have TV channel licences in their names.
Geographical market pricing of channels allowed
Broadcasters are also permitted to declare a channel as pay in one geographical market and FTA in another geographical market. The MRP bouquets of pay channels in a relevant geographical area will have to be uniform for all distribution platforms in that area.
Price of HD channel can’t exceed 3 times that of corresponding SD channel
While premium channels are under price forbearance, TRAI has also prescribed a price cap for HD channels. Broadcasters will be free to declare any of its channels as ‘premium’ irrespective of content and format.
The cost of an HD channel should not exceed three times the cost of a corresponding SD channel. The formula has been derived from the fact that one HD channel occupies the bandwidth of 2–3 SD channels.
Price of HD channel with no SD variant
For HD channels that have differential content from its SD variant, the price ceiling will be three times the ceiling on the retail price of that genre.
For now, the regulator has left cloned channels untouched. However, it has stated that broadcasters or distributors of TV channels should not bundle a cloned channel with the original channel in the same bouquet and that consumers should have the option to select their preferred language.
TRAI asks broadcasters to submit channel list and pricing by 1 Mar 2017 | TelevisionPost.com
