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April 2019


TRAI'S abruptly implemented New Tariff Order (NTO) has had unexpected repercussions.

The NTO's primary objective was to provide consumers a genuine a-la-carte choice of channels. A key clause was the 15% cap on discounts of bouquet prices. Unfortunately, at the very last moment TRAI decided to implement its NTO without the bouquet cap. TRAI also forgot to include clauses for discounting multiple STBs within the same home.

Without the bouquet discount cap, consumers once again received inflated ala- carte prices pushing them to opt for bouquets.

When confronted with consumer wrath regarding inflated monthly bills and lack of discounts for multiple STBs within the home, TRAI pointed out that prices could be lowered by reducing the NCF.

Hence to pacify consumers against inflated monthly bills due to broadcasters’ inflated bundling, the buck was passed to DPOs - cable networks and DTH platforms - to reduce their distribution margins!

The CATV industry is grappling with the difficulty in reducing the NCF since there are two stakeholders - MSOs and LCOs, both of whom are impacted by reduced NCFs.

DTH platforms on the other hand can take an independent decision since they retain the entire NCF.

Reports are that, particularly in urban centres, cable TV has lost consumers to DTH since DTH has reduced the NCF charge.

Both MSOs and LCOs need to sit across the table and arrive at a fair revenue share that will enable both businesses to sustain, while meeting the lower NCF offered by DTH platforms.

On paper, Disney has completed its acquisition of Murdoch's broadcasting empire. However, it is really Murdoch who is effectively seizing control of Disney. It is only a matter of time before James Murdoch is appointed CEO at Disney. In India, STAR India's key personnel have assumed charge of Disney India's operations. Murdoch has effectively bypassed all objections by international regulators and has grown his power and control significantly.