Star, Sony, Zee back on cable after negotiations

Earlier on Thursday, the Indian Broadcasting and Digital Foundation (IBDF), the industry body for TV channels, issued a notice in public interest to cable operators who had not signed fresh agreements to do the needful so that signals could be restored in consumer interest

Mumbai: After a week-long blackout, general entertainment channels from broadcasters like Disney Star, Sony (owned by Culver Max Entertainment) and Zee Entertainment Enterprises Ltd (ZEEL), will be back on all cable television networks.

Star, Sony, Zee back on cable after negotiations

The broadcasters and the cable operators’ lobby resolved their differences late on Thursday evening. Sources in the broadcasting industry told HT that the Indian Broadcasting and Digital Foundation (IBDF) and the All India Digital Cable Federation (AIDCF) had reached an agreement over higher channel prices allowed under the new tariff order issued by the Telecom Regulatory Authority of India (TRAI). The resolution came on the back of the AIDCF getting no relief from the Kerala high court which heard the matter for the fourth day.

On 18 February, three of the biggest general entertainment broadcasters, Disney Star, Sony and Zee had shut down signals to large cable operators or multi-system operators (MSOs) like DEN Networks, Hathway Cable, GTPL and others, since these operators refused to sign agreements with them under new tariff order (NTO 3.0) that came into effect on February 1 and allowed channels to raise prices. Broadcasters were demanding a price hike of 10-14% on their bouquets with some individual channels seeking an even steeper increase.

“However, following the discussion, the final price hike will be in the range of 8-10% for broadcasters instead of 10-14 per cent hike they had sought,” said a media analyst.

While several independent cable companies and all the Direct-to-Home (DTH) operators like Tata Play and Airtel had signed new agreements with the broadcasters earlier, it was only a clutch of large cable operators who were holding out and had dragged TRAI and the broadcasters to court seeking postponement of the implementation of the NTO 3.0 on grounds that it was anti-consumer.

Over two hectic days, TRAI and the broadcasters presented their arguments in the Kerala high court which adjourned the matter to Friday without providing any relief to cable operators who had filed the case.

Earlier on Thursday, the Indian Broadcasting and Digital Foundation (IBDF), the industry body for TV channels, issued a notice in public interest to cable operators who had not signed fresh agreements to do the needful so that signals could be restored in consumer interest. With a large Kerala based multi-system operator also agreeing to sign deals on revised rates with broadcasters, only 5% of the cable industry was left holding out, IBDF said. Clearly, it was only a matter of time for the remaining cable firms to also give in.

A senior executive at a large broadcasting company said it was a big victory for the TV channels and that the DPOs or distribution platform owners got marginalized in this battle. Besides, he claimed that the number of subscribers affected by the blackout was much lower than the 45 million that AIDCF had initially claimed.

Karan Taurani, media analyst and senior vice president of Elara Capital said this swift resolution was in the interest of the industry and did not cause too much damage to the advertising and subscription revenues. Taurani had earlier cautioned that cable subscribers could migrate to DTH platforms if the blackout persists for long.

In its letter to AIDCF secretary general, cable company KCCL, which was a party in the petition filed in the Kerala high court, also complained of rival DTH and streaming platforms eating into its subscriber base owing to the blackout. The company said though it continues to be part of AIDCF, it would follow strategies best suited to its business interest.

The genesis of the spat lies in the first regulatory framework (NTO.1) announced by TRAI in 2017 aimed at promoting individual channels rather than bundles or bouquets to bring down consumers’ cable bills. When introduced in 2019, the regulation did not have the desired effect and instead it led to channels becoming costlier, especially, if taken on an a-la-carte basis that TRAI set out to promote.

Widely criticised for this move which caused cable operators substantial losses, TRAI attempted to correct the anomaly via NTO.2.0 introduced in January 2020 that reduced the MRP (maximum retail price) of a channel in a bouquet from ₹19 to ₹12 proposed earlier. Other measures too were included in an attempt to reduce cost for consumers. But this time, it was the television broadcasters which cried foul and went to court. Although Mumbai HC upheld the structure proposed by TRAI and its right to do so, the regulatory body later approached all the stakeholders to settle the impasse through negotiations.

To cut a long story short, eventually, TRAI issued NTO 3.0 that was welcomed by broadcasters but objected to by cable operators for limiting consumer choice, promoting bouquets and increasing prices. Average price increase across different areas of the country, it said, was expected to be in the range of Rs.30 to Rs.100 per month depending on the channels/bouquets selected by the consumer.

In the courts, TRAI argued that broadcasters are producers of content and DPOs are intermediaries who pass on the signals of the broadcasters to the consumers. DPOs have no say in pricing of channels, it said.