DTH: TURBULENT BIRTH
Direct To Home (DTH) broadcasts have had a turbulent start in India. Rupert Murdoch was the first to aggressively pursue this opportunity. However, initially Star TV's DTH application had several anomalies and was submitted by Front, Shell company that tried to bypass the Indian Government's restriction on foreign equity. The Shell company had a paid up capital of just Rs. 100,000 ! Murdoch also insisted that it was technically impossible to provide inter-operable DTH STBs ! Clearly Murdoch wanted to do things only his way.
India's first DTH service was launched by Subhash Chandra's Dish TV. The DTH platform provided inter-operable STBs and met all Indian equity guidelines spelt out by the Govt. for DTH applicants.
ZEE-STAR CONFLICT
Clearly, Murdoch was not too happy of having lost out to his arch Indian rival - Subhash Chandra. As a result the Star group of channels refused to join Dish TV for almost a year. They impose inordinate and unreasonable conditions and prices for offering their channels on Dish TV. When these were challenged, legal impediments were resorted to which dragged on 4 months.
It therefore seemed a natural consequence that when the Tata-Sky DTH platform was launched almost 2 years later, the Zee channel bouquet refused to join the Tata-Sky service and laid out its own set of apparently unreasonable terms !
These initial conflicts have been a heritage for Indian DTH platforms which have been at war with each other. Not only for competitive but also for historical reasons.
The New Law Requires All Pay Channels Must Be Offered Individually To DTH Platforms |
THE CONFLICT
TRAI, the sector regulator has dictated that all pay channel distributors must share their content across all DTH and cable TV platforms. The primary objective was to ensure that consumers have the widest possible choice of content irrespective of the delivery platforms: various DTH operators or even cable TV.
The TRAI dictates had however, not spelt out specific prices at which broadcasters must provide their channels to DTH platforms.
Due to continued enmity and rivalry, broadcasters did not offer their pay channels in the same bouquets as are offered to cable TV, based on TRAI's dictates for Cable TV since they did not apply to DTH.
Pay channel distribution platforms often resorted to "All-Channels-Or-Nothing." As an example, Zee TV could possibly offer a competing DTH platform a choice of taking all 55 its channels or none at all. Of course payment has to be made for all 55 channels and since prices were not capped, often arbitrary pricing was quoted.
DTH Platforms Have Not Been Compelled To Offer An A-La-Carte Channel Choice To Their Customers |
TDSAT JUDGEMENT
The pricing issue was appealed in a matter before the TDSAT. TDSAT's judgment dated 31st March, 2007 in petition no. 189(C) of 2006 and judgment dated 14th July, 2006 in petition no. 136(C) of 2006 provided a pivotal verdict.
The TDSAT reasoned that broadcasters had time and again reiterated that cable networks paid the asking rate for significantly less than 50% of the actually connected subscribers. Since DTH services were thoroughly quantified and audited, 'Under Declaration' was not possible. Hence DTH platforms should not be charged more than 50% of the rates levied on cable TV networks outside the mandatory CAS territories (where Under Declaration was possible).
While the TDSAT judgement established a price reference for pay channels sold to DTH platforms broadcasters still had one more trick up their sleeve - "All-Channels-Or-Nothing."
DTH Platforms Pay 50% Of
The Price Offered To Non-CAS CATV Networks |
This "All-Channels-Or-Nothing." roadblock was removed by the TRAI, in mid-April when it declared its "Interconnection Regulation" norms for supply of pay channels to DTH platforms.
A-LA-CARTE CHANNELS TO DTH PLATFORMS
The TRAI's "Interconnection Regulation" actually dictates the following :
i) Pay channel broadcasters must offer channels individually (on an a-la-carte basis) to DTH platforms.
ii) Pay channels must offer the same bouquets to DTH as are offered to cable networks in non-CAS areas. Pay channels are also allowed to offer additional bouquets to DTH platforms.
iii) In accordance with the TDSAT judgement, pay channels cannot charge more than 50% of the individual channel or bouquet prices charged to cable networks in non-CAS areas.
Any Channel Not Listed
(In Table 1) May Be Considered
As FTA In Non-CAS Areas |
The TRAI has repeatedly stated its position that the prime objectives of its regulations is to benefit the consumer. However, the TRAI has not made it compulsory for DTH platforms to offer consumers an a-la-carte choice of channels !
We have attached, at the end of this article, Table 1 which provides full details of all a-la-carte and bouquet prices offered by pay TV broadcasters. These prices are available on the TRAI website and the TRAI points out: "It should be noted that these published rates are only meant to provide a basis for appropriate interconnection agreements on non-discriminatory basis between broadcasters on one hand and MSOs/cable operators on the other. These rates as published in the website of TRAI should not be taken as approved by the TRAI or as rates applicable at the consumer's end."
Interestingly, the TRAI order also states that "It may also be noted that the channels not mentioned in the list may be considered as Free to Air (FTA) channel for non-CAS areas."
REDUCED DTH LICENCE FEE
Though not directly related to pay channel pricing and availability, the I&B Ministry, last month, slashed the DTH licence fee by 40%. Despite this dramatic reduction, the CEOs of existing and licensed DTH platforms unanimously declared in a Press conference that the reduced licence fee benefit would not reflect in reduced prices to consumers.
DTH Platforms Do Not Plan To Reduce Their Consumer Prices
PERFECTLY TIMED FOR RELIANCE DTH !
The above chain of events clearly demonstrates that corporates can be as quarrelsome as individuals, who continue their long term grudges until they are forced to change path by the national regulator.
These conflicts have not only held back growth of the DTH industry but have also proved deterrents when a new DTH platform is launched. Small platforms such as Sun DTH have struggle to get channels from broadcasters who also have stakes in competing DTH platforms.
Is it therefore coincidental that regulations have been put in place and the path paved, just a couple of weeks before the anticipated launch of Anil Ambani's BIG TV DTH ? n
