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No cheap thrills: TV subscription bill may go up for most users, says report
Financial Express, February 05, 2019

The Trai’s new regulatory framework for broadcasting and cable services industry, which the regulator said is intended to bring in more transparency and uniformity as well as offers greater freedom of choice to viewers, is expected to increase the monthly TV bills of majority of subscribers by around 25%, ratings agency Crisil said in a report.

The Telecom Regulatory Authority of India’s (Trai) new regulatory regime came into force on February 1. Crisil said that network capacity fee (NCF) and channel prices announced by broadcasters and distributors as per Trai’s new guidelines could increase monthly bill of most subscribers. Its analysis assumes a scenario where subscribers opt for the top 10 channels by viewership in addition to the free-to-air (FTA) ones.

Crisil senior director (ratings) Sachin Gupta said, “Our analysis of the impact of regulations indicates a varied impact on monthly TV bills. Based on current pricing, the monthly TV bill can go up by 25% from Rs 230-240 to around Rs 300 per month for viewers who opt for the top 10 channels, but will come down for those who opt up to top 5 channels.”

More than 90% of TV viewers go to 50 or fewer channels and the new rules will let them subscribe to what they want and not be saddled with channels they are not interested in, the agency said. These new rules will benefit popular channels and hasten adoption of over-the-top (OTT) players or content providers who stream media over the internet, like Netflix and Hotstar, and will be a mixed bag for viewers and distributors, Crisil added. “The new regime could drive consolidation in broadcasting industry because content will clearly be the king and key differentiator. Subscription revenues of broadcasters would rise around 40% to Rs 94 per subscriber per month compared with `60-70 now. With viewers likely to opt for popular channels, large broadcasters will have greater pricing power,” the report said. It, however, added that broadcasters with less-popular channels will find it tough to piggyback on packages, and the least popular ones will hardly have a business case and could go off air.

For distributors (DTH and cable operators), the new regulations are a mixed bag. While content cost will become a pass-through, protecting them from fluctuations, they may lose out on the benefits of value-added services such as bundling content across broadcasters, customisation, and placement revenue.

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