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January 2019


The Consumer Has Seen No Gain From DAS & TRAI's Tariff Orders

In the Pay TV value chain there are 4 stakeholders:

1. THE CONSUMER who pays for the content and has been forced to take on DAS and pay for the STB under the promise that he will get to pick and choose and pay for only those channels that he wants. This would lower his Pay TV Cost.

Unfortunately, today, more than 5 years since addressability was imposed on the consumer, he has not been empowered to individually select channels at appropriate prices.

Instead, the Consumers' cost has risen dramatically since Analog delivery, and continues to rise. The consumer has received nothing from DAS.


Most of these have a few prime channels and scores of laggard channels. Their aim is to bundle the laggard channels with the prime channels, forcing consumers to subscribe to a huge bouquet of unwanted channels.

Broadcasters Force Large Bouquets On Consumers By Inflating A-la-Carte Prices

To this end, broadcasters have inflated their standalone (a-la-carte) prices of their prime channels making it cheaper for the subscriber to take the entire bouquet rather than a-la-carte selection of channels that are of interest to the consumer.

Consumers Are Forced To Pay Network Capacity Fees On Inflated Bouquets

3. DPOS (Digital Platform Operators)

They consist of Cable TV networks (MSOS and LCOS), DTH platforms, HITS Platforms, IPTV platforms.

DPOS are required to invest substantial amounts in not only establishing their distribution but also growing it to accommodate the ever-increasing number of TV channels. Today India has 860+ licenced TV channels. Clearly, no single consumer wants all of these. The largest DPO, currently can deliver 600+ TV channels.

To build and sustain the large infrastructure, to deliver a plethora of channels, it is absolutely essential that DPOS receive revenues to carry channels. While Pay Channels yield some revenue, Free-To-Air (FTA) channels must also be required to pay a carriage fee. For the first time in almost 2 decades, the regulator has realised this and formally declared carriage fees that are payable. The carriage fees have been structured so that more popular channels (viewed by more consumers on that particular network) pay a lower carriage fee. In effect, carriage fees will typically amount to less than 5 paise/subscriber/month, which may not provide adequate reimbursement. A few years ago, FTA channels themselves had suggested a Carriage fee with a ceiling of ₹ 1/sub/month.

The new TRAI regulation also provides for a placement fee which is a universal practice in media. For eg. positions on the front page of a newspaper or home page of a website are priced at a premium.

DPOS receive a 20% commission of the Pay channel price from the consumer. DPOs also receive carriage & placement fees, from the broadcasters, as per the new tariff order.

Some Local Bodies Charge Consumers Entertainment Tax In Addition To GST


The 4th stakeholder is the Government. It receives an 18% GST on all revenues from any of the stakeholders.

Unfortunately, some local bodies have imposed an additional Entertainment Tax, in addition to the GST. Once again, the consumer is the mute victim.

DAS Is Meaningless For Consumers Without The 15% A-La-Carte To Bouquet Price Cap


From the above, clearly, the consumer is the stakeholder who has been short-changed the most. He has paid for a digital set top box, paid higher revenues to broadcasters for pay channels and still has not been enabled to pick and choose specific channels at prices which are below the bouquet price!

Further, it is important to note that in the absence of a 15% cap between the a-la-carte and bouquet prices, consumers are hit with a double whammy! They are forced to take on huge bouquets of unnecessary channels, and also pay the network distribution fee for these unnecessary channels!

DAS is meaningless for consumers without the 15% a-la-carte to bouquet price cap

It does seem unfortunate that not a single consumer body has spoken up on behalf of the more than 120 million pay channel subscribers in the country. n