Lessons to be learned from Hathway-Star Sports row

[superdudebuddy]

Lessons to be learned from Hathway-Star Sports row


The very public disagreement between Hathway Cable & Datacom and Star Sports—and by proxy the Star bouquet of channels—has surprised me with their virulence and high volume. While it can be viewed as a spat between two business partners having a disagreement on a commercial transaction, some of the questions it poses are quite fundamental as to how, going forward, the business will be managed and regulated. It also gives a peek into how the market may work as it consolidates under major content and distribution moves in the industry.

Clearly, there is an issue at stake today on the cable operator’s payouts. Multi-system operators (MSOs) have historically under-paid the sports channels, and having been on the other side of the table for many years, I do understand the angst the broadcasters hold against some of the companies.

Added to this is the systematic leaking of signals in certain areas due to piracy with little option for redress and control. The post facto Telecom Disputes Settlement and Appellate Tribunal (TDSAT) orders have always been too little too late—in a way bolting the stable door after the horse has fled away. While action of this kind needs to be supported, there are significant issues related to consumer, regulatory and business practices that need to be debated and addressed to help build a stronger, more transparent, and a fair revenue accrual and recognition system, as well as a more robust and less contentious arbitration model. It appears that much of this will be led by regulatory implementation, discipline and policy initiatives.


A campaign of this kind indicates that communication has broken down between the two companies, but should these campaigns be allowed? The campaign borders on slandering the reputation of the operator, and while I do believe that the broadcaster may have a genuine claim, the impact of this could be manifold. Listed companies like Hathway and others usually stand to lose extra, as this spooks investors and lenders, and also customers who may not necessarily be impacted by this. In this case, the consumer does not lose viewing options as the India matches are available on Doordarshan, but in some cases even that may happen.

Should large networks with tremendous pricing power be allowed to use their networks at a fraction of the imputed media cost to address their disputes? If I were a regulator, I would be very wary, as it sets a dangerous trend, and in cases involving large players where consumer impacts are significant, the regulator may have to forcibly intervene. This dispute also brings into focus the mandatory sharing law for events of national importance. This law is single-handedly misused by cable operators to put broadcasters on the back foot. I have been mentioning this for a length of time that the premise of writing the regulation has changed dramatically, and with cable and DTH penetration, this law itself should be done away with.

This single-handedly will fix the problem. There may be a genuine concern here at the regulator level that the pricing may increase significantly, and therefore alternative solutions may have to be worked through, if one takes an extremely conservative customer protection view around it. One suggestion I have is that a basic feed be made available to the national broadcaster, and the host broadcasters may be allowed to beam a premium feed to their consumers to generate more value.



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[Basil]

Star Sports, Hathway lock horns​

MUMBAI: Two hard-to-miss campaigns have been doing the rounds of television, radio and digital media lately.

One, launched by sports broadcaster Star Sports, hits out at multi-system operator (MSO) Hathway for not providing Star Sports channels to subscribers, apart from suggesting that subscribers move to other MSOs or a DTH platform.

The other, launched by Hathway, informs viewers to subscribe to Star Sports channels as part of the MSO’s ‘Sports Package’ or on a la carte basis.

Subscribers may be confused but what is obvious is that Star India and the MSO, once close partners, seem to be no longer on the same page and are scrapping with each other like a couple after a bitter parting. And that too in the public eye.

But both deny that they are hitting out at each other; they say they are just protecting their individual interests.

“We noticed that several subscribers didn’t even know how to subscribe to our channels and were therefore under the impression that the channels had been switched off at our end. We were thus compelled to issue an advertisement in mainline newspapers to assist our viewers and clear all misgivings so that consumers could explore their options to avail our channels,” explains the Star Sports spokesperson.

“We would like to highlight that we have received complaints that many consumers are facing lot of difficulties in getting our channels activated. There are newspaper reports talking about subscribers facing challenges in availing signals from Hathway.”

On his part, Hathway Cable & Datacom CEO Jagdish Kumar says, “We had to launch the campaign because of the wrong information that was being spread against us. We have not pulled off Star Sports channels. We have simply removed them from our premium package and are now giving them to subscribers either a la carte or through our Sports package.”

Didn’t Star Sports spark off Hathway’s move by raising the sticker price of its channels? “We have not increased the price of our channels. The channel pricing is regulated by the Telecom Regulatory Authority of India (TRAI) and no broadcaster can unilaterally increase the channel price,” the spokesperson shoots back.

However, unconfirmed reports are that Star Sports asked Hathway to pay for a higher number of subscribers this year – when its contract came up for renewal - if it wanted the channels to be placed in any of its packages. Something which most broadcasters are resorting to with the onset of greater transparency following the wider spread of set top boxes in subscriber homes.

This was something which Hathway was not open to hence it yanked Star Sports channels from its existing pack and begin charging separately for them.

“I don’t understand why it is being made out as such a big issue? Isn’t digitisation about this? We are giving the consumer the power to choose. Any consumer who wants the sports channels can get them either a la carte or they can subscribe to our sports pack,” Pillai maintains.

The Star Sports spokesperson however insists that the move has affected Hathway consumers adversely. “They are today worse off than before as they have to now pay more to Hathway for availing the same set of channels, including the Star Sports Channels,” he empasises.

Pillai contradicts this saying, “Who says we are charging more? We have instead reduced the package price for consumers, who have opted for a la carte channels.”

He claims that the MSO has reduced the price of its premium package by Rs 5 and is offering Star Sports 1, 2, 3 and 4 at Rs 17.25 per month. Consumers opting for these channels would have to subscribe for a period of three months, he adds. Else, the channels are available as part of its Sports Pack with Neo Sports at the same price and consumers could subscribe to that for a period of one month.

The Star Sports spokesperson then accuses Hathway of not giving prior and adequate notice to its consumers before making these changes to its package composition and “discontinuing the exhibition of Star Sports channels”.

“We have received information that Hathway did not protect those who had subscribed to the packages containing the Star Sports channels in the last six months nor did it protect those who had paid for the same on a yearly basis, thereby breaching its obligations under the relevant regulations. We have been inundated with enquiries from agitated and confused consumers of Hathway, who saw their favourite sports channels suddenly going off their TV screens, thereby missing out on quality sporting action on our channels,” alleges the spokesperson.

Pillai has a quick riposte to this allegation. Says he: “Who says we had not given any prior notice? We had sent out a public notice 20 days back informing our subscribers of our plan. In fact, we were also running scrolls on the TV screen, informing them of the same.”

So, can consumers expect some kind of resolution soon? “We have always acted in the spirit of cooperation. As a result, our content is widely available across cable TV and DTH platforms,” highlights the Star Sports spokesperson. “Having said that, we cannot accept that our viewers are taken for granted. We also expect distribution platforms to behave responsibly as both broadcasters and distributors owe a minimum quality of service to our viewers as provided for in the regulations framed by TRAI.”

Pillai reveals that his company is just following market demands, adding that “we are examining all options. The case had come up for hearing in TDSAT, where the tribunal had disposed-off the petition of Star Sports. I don’t see a reason for the sports broadcaster’s reaction. We are just complying with what digitisation was meant for.”

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