Evidently, experts state that while the move will bring in more power into the common man's lap and profits into the MSO's and LCO's account, the bigger DTH players will have to revive their payment system or else, may have to shut shop eventually.
If the onset of digitisation is sure to wage a war between the DTH players and local digital operators, the new tariff order from TRAI is sure to add the requisite fuel to this much talked-about battle.
The order also suggests that while the multi-system operator (MSO) has to offer the Basic Service Tier, it is not mandatory for the subscriber to subscribe to the BST but instead can form his own package of a maximum of 100 FTA channels. And whatever the case be, the MSO cannot charge the subscriber more than Rs 100 per month.
Pawan Jailkhani, executive vice-president, revenue, 9X Media Group, says, "The new tariff order will consolidate and regulate the pricing by the DTH and digital operators to a large level."
He explains that in the case of digital platforms, the cost of transmission doesn't increase with the number of channels. "However, since an analog operator cannot carry more than 50-60 channels on a single bandwidth, the cost generally increases with the number of channels," he notes.
According to K Jayaraman, CEO, Hathway Cable Network, while the move will spur the process of digitisation in India, the DTH players will either have to shift their complete focus to the upper class or will have to bring down their prices to half of existing rates.
Now, compare this to DTH and (approximately) the same number of channels is offered at almost double the rate. For instance: the package charges on Tata Sky and Dish TV start at Rs 180 per month, wherein an approximate 100 channels across various genres are offered. For Airtel and Reliance, the 100-channel package offer starts at around Rs 160.
S N Sharma, CEO, Den Networks, says, "While with the move, it's the subscribers that will benefit the most, there will be a tough fight to maintain a tight grip on them. Also, I feel that the local operators and MSOs will have an upper hand on the customer choices."
For the record, the new tariff order has prescribed a 55:45 (MSO:LCO) revenue share ratio in case of BST and FTA channels and of 65:35 (MSO:LCO) revenue ratio in case of the pay channels or a bouquet of pay channels.
Jailkhani notes that the new tariff system will be profitable for the independent channels as well, which are not a part of any network. Content will rule the subscriber selection and not the bouquets since all channels will be available on a-la-carte basis without much difference in pricing. Citing an example, he says, "For example, when we talk about a channel like Tashan, it is not a part of any major package. So, if I buy a package for say Rs 200 and subscribe for Tashan individually, it costs me an extra Rs 10 a month. This, in turn, enables the DTH provider to pocket somewhere around one crore from a single such channel in a year."
Another media expert, on condition of anonymity, states that the single a-la-carte paid channel sold by a DTH player earns it about Rs 1-1.5 crore, for which it doesn't pay any subscription money to the broadcaster. With this new regulation, the extra income of the DTH players will be minimised and they may have to shut shop in future.