Big broadcasters in India warn new tariff rules could hit services

TV18 Broadcast

10/01/2020 09:35

By Shilpa Jamkhandikar and Alexandra Ulmer
    MUMBAI, Jan 10 (Reuters) - Some of the biggest television
broadcasters operating in India joined forces on Friday to
criticise new government regulations that impose restrictions on
pay-TV charges, saying the move could put some channels out of
business.
    Senior executives from India's Zee Entertainment  ZEE.NS ,
Viacom18 Media, Sony Corp's  6758.T  local unit, The Walt Disney
Co  DIS.N  and its TV network Star India, got together to brief
the media in Mumbai and said excessive regulation will also
crimp their ability to keep up with technological advances.
    "We're evaluating how we can challenge this," said N.P.
Singh, Managing Director and CEO for Sony Pictures Networks
India.
    The Telecom Regulatory Authority of India (TRAI) this month 
ordered direct-to-home and cable operators to double the number
of channels they offer by charging a basic "network capacity
fee" to 200, and capped the charges for additional channels. It
also reduced the price ceilings for some channel offerings.
    TRAI's decision, which comes in force from March 1, will
reduce customers' monthly bills but adversely hit the revenues
and profitability of broadcasters, according to the research arm
of ratings agency ICRA.
    During Friday's event, industry executives also said the
regulations will further squeeze India's paid television
industry which was already battling intense competition from
video streaming firms such as Netflix  NFLX.O  and Amazon's
 AMZN.O  Prime Video.
    "The long term effects of this are going to be extremely
destructive. I don’t see a case of existence for the smaller
channels ... most of them will have to shut shop," said Uday
Shankar, Star India's chairman.
    TRAI's new tariff regulations come less than a year after it
first asked broadcasters to price channels individually, rather
than grouping them into packages, so as to allow customers to
better make selections.
    The move, however, was marred by confusion around
implementation and forced the TRAI to review the regulations.
    TRAI's chairman, R.S. Sharma, has said the new revised
regulations announced this month were merely "fine-tuning" of
the previous ones, and the regulator was open to hearing the
industry's grievances.
    A government official said TRAI will review the industry's
remarks made on Friday before commenting further. 
    "TRAI's regulatory prescriptions may kill the paid broadcast
TV model, impact a large section of the creative ecosystem and
compound India's economic troubles," said Vivan Sharan, a
partner at India's Koan Advisory Group which advises several big
media companies.
    Television advertising grew at a slower-than-expected rate
of 12.4% in fiscal year that ended March 2019, according to
global consultants KPMG, as companies have been spending less
due to muted consumer sentiment in the country.

 (Reporting by Shilpa Jamkhandikar and Alexandra Ulmer in
Mumbai; Additional reporting by Chris Thomas in Bengaluru;
Editing by Aditya Kalra and Toby Chopra)
 ((shilpa.jamkhandikar@thomsonreuters.com;))