Issues related to New Regulatory Framework for Media Industry

In January 2012 Digital Addressable Systems (DAS) was introduced for

digitalization of the Cable Television Services. During starting days the
regulations were different for DTH and Cable Television services as DAS based
systems were provided only to DTH services and Cable Television Networks
provided services in analogue mode.
Further in 2016 TRAI started consultations for a new regulatory framework
and notified the New Regulatory Framework 2017 in March 2017 and came
into effect from 29th December 2018. As the new framework brought
underlining principle of transparency, non-discrimination and revenue
assurance in Media industry along with enabling some benefits for
consumers/subscribers like never before, with full control over their
subscribed channels. The subscriber could choose any channel that she/he
wished to view.
After implementation of the New Regulatory Framework 2017, TRAI noticed
some inadequacies impacting the consumers inspite orderly growth in the
broadcasting sector as it was observed that few service providers were
exploiting available flexibilities of the framework to their advantages. After
due consultation with stakeholders, TRAI notified the New Regulatory
Framework 2020 by amending the New Regulatory Framework 2017.

Comparison of New Regulatory Framework 2017 and New Regulatory

Framework 2020:-

S. New Regulatory Framework New Regulatory Framework

No. 2017 2020
1. NCF
 Maximum Rs. 130/- for 100 SD  Maximum Rs. 130/- for 200 SD
channels channels and all mandatory
 Maximum Rs. 20/- for each channels
additional block of 25 SD  Maximum Rs. 160/- for more
channels than 200 SD channels
 Flexibility to DPOs to declare
different NCFs for different
geographical regions/areas
within its service area

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2. Multi TV home
 DPOs are required to declare  Multi TV home defined as a
NCF for each subscriber household having multiple
 Multi TV home not recognized connections in the name of a
 Some DPOs were charging NCF single person under single ID
of Rs. 130/- for each TV in and a single bill is generated for
multi-TV homes. such home.
 DPOs can declare full NCF for 1st
TV in a multi-TV Home
 NCF for 2nd & subsequent TV
cannot be more than 40% of
declared NCF for 1st TV
connection
 Subscribers can choose different
set of channels for each TV
connection in a multi-TV home
3. Long Term Subscriptions  Defined as a subscription for a
 No provision duration of 6 months or more, for
which an advance payment has
been made by the subscriber
 DPOs may offer discounts on
NCF and DRP on long term
subscriptions
4. MRP of a channel to be part of
a bouquet
 Rs. 19/-  Rs. 12/-

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5. Reasonable pricing of a-la-
carte channels and bouquets by  Twin conditions as below were
broadcasters prescribed:
A condition as below was i) the sum of the a-la-carte rates
prescribed, however not of the pay channels (MRP)
implemented as Hon’ble High forming part of a bouquet shall
Court of Madras held this clause in no case exceed one and half
as arbitrary and un- times the rate of the bouquet of
implementable: which such pay channels are a
 Bouquet price cannot be more part; and
than 85% of sum of prices of a- ii) the a-la-carte rates of each pay
la-carte channels in that channel (MRP), forming part of
bouquet a bouquet, shall in no case
exceed three times the average
rate of a pay channel of the
bouquet of which such pay
channel is a part.
(Hon’ble High Court of Bombay
struck down the second twin
condition)

 MRP of a channel in a bouquet

cannot be more than the MRP of
any bouquet containing that
channel

6. Number of bouquets offered by

a broadcaster  Number of bouquets of pay
 No limit channels cannot be more than
number of pay channels offered
by a broadcaster

ISSUES
a. The proposed tariffs by broadcasters through their RIOs submitted in
compliance to NTO 2.0 Tariff Orders would cause significant increase
in the tariffs to consumers. The consumer price rise, if any is required
to be limited to a reasonable limit.

b. The proposed RIOs by Broadcasters may cause significant changes in

the packages, especially due to keeping popular channels at higher a-
la-carte prices, not being part of bouquets. This enjoins DPO to make
very large number of plans and package offerings. Therefore, the
DPOs require support from broadcasters so that they do not have to
make large number of plans/ bouquets.

c. Same product (television Channel) should be offered on same price

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 whether on Linear Television, Free Dish or Subscription based Video
on Demand.

d. As there is no change in prices of bouquet or a-la- carte channels.

This has kept media industry under stress in terms of providing
quality product to the end consumers. As such restoring the MRP
ceiling for bouquet inclusion to unamended tariff order level of Rs.
Nineteen (19/-) would be appropriate.

e. During last more than one-year total active number of DTH

subscribers has decreased sharply. Similarly, number of total active
subscribers of major MSOs/HITS operators having been decreased.
The revenue of broadcasters as well as DPOs along with the
advertisement revenue of broadcasters is also projected to decrease
in FY 2020-21.

f. The Media sector is facing challenges not only due to pandemic but also
due to other geo-political conditions. It is important for a regulator to be
aware and address the issues for enabling the industry. It is clear, that
implementation of Tariff Amendment Order 2020 in its current form
will cause large scale disruptions along with easy availability of the TV
content on the Over the Top (OTT) platforms/ Apps posing a serious
challenge to the traditional cable/dish TV services. Initially there were
only a couple of OTT platforms in India with very few viewers.
However, during last two to three years the number and type of such
platforms have increased manifolds. Revenue generated from a
program on a channel is not only through subscription but also
through advertisement. The rates of advertisement also vary based
on popularity, reach, timing and viewership of a program. Thus, the
growth of revenues of OTT and digital video services in the 2020
financial year (FY) despite an overall slump in the economy, digital
registered a significant growth amongst other segments of the M&E
sector and adversely caused grave loss to cable television network
service providers.

g. It has been noticed that some consumers are not comfortable in

selecting the channels of their choices, due to their inability to use IT
systems and understanding the packages offered by distributors/
broadcasters. That in order to have smooth implementation, popular
channels of the broadcasters may need to be made available in the
bouquets offered to consumers by broadcasters as well as DPOs.

There shall be some cogent implementation plan with minimum

disruptions and hassles to the consumers while implementing the New
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Regulatory Framework 2020. As the consumers exercise their choices
differently based on their preferences. In general, the consumers of DTH
platforms make use of online portals and apps. Whereas consumers served
by Local Cable Operators (LCO), still prefer to convey their choices to their
LCO either by filling choices on a predefined form or over the telephone.
Therefore, any changes in consumer offering will entail greater efforts on
part of LCOs and in turn MSOs.