Priced debate over pay channels

NEW DELHI: Should the pricing of pay television channels for consumers accessing them through cable TV, DTH or broadband be the same? That’s a debate doing the rounds in the cable and satellite industry, and it was evoked by broadcast regulator Trai’s draft interconnect regulations. Trai is all for differential pricing of the same TV channels received via different technologies.
This means a Star, Zee or Sony package will have different prices for consumers accessing via cable, CAS, DTH or broadband. Consumer organisations say pricing of DTH should be same — at least in the beginning — as that of cable TV since platforms like DTH and broadband are effective alternatives to end the cable monopoly.
"Our view is that the regulator should fix pay channel prices in the interest of consumers. Prices should not differ if channel content is similar among cable, DTH or broadband," said VC Tandon, secretary-general of Delhi RWAs’ Joint Front.
While Trai has made it clear that pay broadcasters should not differentiate prices of channels between multi-service operators (MSOs) in cable distribution, it has contradicted its position on uniform pricing of channels through alternative distribution platforms. "There cannot be differential pricing through alternative media for the same channel. Prices should be uniform," said an ASC official. The firm, into DTH, recommended same pricing of channels, "irrespective of the technology used for distribution of signals."
Industry observers say DTH will not take off if there is price differentiation in alternative media. Experts say pay broadcasters will get 100% declaration in DTH and broadband, while there is under-declaration in cable TV distribution.
This means that while in DTH a broadcaster will get 100% money from the service provider, there is pilferage in cable distribution as the returns are under-declared by cable operators.
"You can’t sell Lux soap for Rs 5 in Kalyanpuri and sell the same for Rs 15 in Greater Kailash," said the ASC official. Currently, the Star and Sony bouquet of channels do not have content-sharing agreement with Subhash Chandra’s DTH platform. Space TV, a venture between Tata and Star, is awaiting clearance for DTH licence. Industry leaders say consumers will benefit only if there is effective competition between cable and DTH. A section of the industry say market forces will set pricing and consumers will choose between cable, DTH and broadband. While a cable connection can be obtained for Rs 500, a DTH connection costs upward of Rs 5,000.
Indian Broadcasting Foundation has no clear view on this as it is split between domestic and foreign broadcasters. Some foreign broadcasters have questioned the must-provide clause of Trai, stating that it doesn’t exist anywhere in the world. Trai may come out with its final interconnect rules later this month.