B'casters unite against TRAI’s new order; sports ntwks worst off

IBF logo

MUMBAI: Coming together in a public show of unity for only the second time in over a decade, television broadcasters under the benner of the Indian Broadcasting Foundation (IBF) on Friday sounded the alarm bell against the Telecom Regulatory Authority of India's new tariff order (NTO 2.0), asserting it would jeopardise content creation, impact jobs and cripple growth - a veritable recipe for disaster.

Less than a year after implementing NTO 1.0, TRAI last month revisited its tariff order to soften the prices for end consumers through interventions, including reducing the maximum price one has to pay for a channel to Rs 12 from the previous Rs 19.

IBF show of strength
(L-R) Punit Misra, K Madhavan, Punit Goenka, N.P.Singh, Uday Shankar, Aroon Purie, Sudhanshu Vats, Megha Tata, I.Venkat

In a rare press conference here which had top executives from all the leading networks speaking out, IBF president and chairman of Sony Pictures Networks India (SPN), NP Singh, said the regulator should have had ideally given time for NTO 1.0 to fully settle in before deciding whether any modifications were required.

Singh pointed out that the broadcasters, who garner less than a fourth of the payments made by end consumers with a bulk 65 per cent going to distributors, had supported the last order despite reservations and collectively invested over Rs 10 billion behind communicating to viewers the positives that NTO 1.0 offered end users. After last year’s order, he said the industry had lost over 12 million subscribers.

Singh further said the broadcasters seek a stable regulatory regime and interventions like these are contrary to the Narendra Modi government’s stated promise to ensure ease of doing business for enterprises. He also questioned TRAI's contention that prices will indeed go down with the implementation of its latest decree. 

Uday Shankar, chairman of Star India and The Walt Disney Company India termed the new order as “ludicrous” and said the industry will use all its “constitutional rights” to challenge the order. 

Expanding on the repercussions of NTO 2.0 for the sector, Shankar noted that the hardest hit would be the premium channels (read sports in particular and movies to a lesser extent) and the "long tail" of smaller channels that would all "get wiped out".

NTO 2.0 is a nightmare scenario for Disney/Star, which is by far the biggest investor is sports broadcast rights in the Indian market and is already facing a heavy financial load in regards to monetizing its cricket properties in particular.   

TV Today’s Aroon Purie said the new order will “strangulate” the industry and added that it is an important sector which the government should encourage and not suppress.

Discovery Networks’ Megha Tata said India is already the cheapest cable market in the world and the future of the sector would be jeopardised through such regulatory interventions.