Monday, 10 March 2014

Arasu directs cable ops to issue serial receipt to customers

Cable operators of Tamil Nadu are facing a great dilemma. State government has forced them to join ARASU, a government initiated MSO but I & B Ministry given it only a provisional license. In fact the regulator TARI has recommended that no government or political party should own any media venture. If Ministry accepts and notifies these recommendations, ARASU loses it license and will have to wind up its operations. Thus Cable operators who depend on its signals will lose their business.
The other MSO in the state, Sumangali of Sun TV group is an archrival of ARASU, being patronized by the opposition party DMK in the state. Thus fate of 30,000 cable operators of Tamil Nadu hang in balance as coming from ARASU, Sumangali may not accept them. Hence they lose either way. Not only this, their livelihood is in danger as they are not allowed to collect more than Rs 70 from, consumers per, TV set whereas due to inflation, their day to day functioning becomes difficult if they do not get an ARPU of Rs 150 per TV connection. At present, after giving the government Rs 20 they are left with only Rs 50 per subscriber.

Interim Budget lowers STB price

The Union Finance Minister P. Chidambaram presented the Interim Budget 2014-15 in the Lok Sabha with an estimated plan expenditure of Rs. 5,55,322 crore and non-plan expenditure of Rs. 12,07,892 crore. To boost the manufacturing industry in India, the interim budget has reduced the excise duty from 12 to 10 per cent. This reduction will bring down the cost of set top boxes.  The grants-in-aid for Prasar Bharati has been raised marginally to Rs 2,331.58 crore for 2014-15 from the revised estimates of Rs 2,089.56 crore in 2013-14. There is no separate investment by the government in the pubcaster for the second year in a row. There is no change in income tax rates.

TRAI Endeavour to Regulate Content Aggregators Will it succeed?

The Telecom Regulatory Authority of India (TRAI) has reduced the role of the content aggregators through its new Tariff Order, prompting multi-system operators (MSOs) and direct-to-home (DTH) service providers to instinctively feel that they can no longer be ‘bullied’ by the muscle power of Media Pro, MSM Discovery or IndiaCast UTV. Under the new regulation, content aggregators are barred from forming bouquets which have channels from more than one broadcaster. While curbing the powers of the content aggregators, the sector regulator has allowed them to function as ‘agents’ of broadcasters. The aggregators can continue to sell bouquets of more than one broadcaster, but they will be able to bundle channels from only one broadcaster (or its group companies).
The regulation notified by TRAI on 11th February will reduce the control of existing market powerful content aggregators over MSOs and DTH operators. If we go extreme we can conclude that this regulation will dismantle the joint venture developed by different broadcaster to run their channels. Big broadcasters, however, would have less impact. They have a wide spread of channels and would continue to command negotiating power. But the smaller broadcasters, especially news channels that were riding on the back of bigger bouquets, would feel the tremor.

LCOs Struggle for their Rights

Of late, many untoward incidents have started occurring in the industry due to neglect of regulator in taking action on the grievances of LCOs. Disputes between MSOs and LCOs over billing, submission of CAF forms and revenue share have increased. In one case firing was resorted to in a meeting of an MSO and LCOs and in another, some unidentified people has badly beaten up an MSO official. These things do not talk well of industry’s health. Such things happened in early nineties when the industry was evolving. We used to call it the Wild West of cable TV. Industry must find solution to such problems if it wants to progress.
Already in many states matter has gone to court because the Ministry and the regulator have totally forgotten the smaller players, be it LCOs or small broadcasters who are now forced to approach the judiciary, for justice. LCOs are fighting for their revenue share and control of subscribers and small broadcasters have gone to the High Court against Ad Cap regulations that will restrict their revenue earning capacity, making their business unviable.

LCO Struggle Intensifies

General Elections for the whole country will be held in this year in the month of April-May. We may have a very different scene in Phase 3 and 4 areas if there is a change in the political party that runs the government. I don't find any change in the already concluded phases as STBs have been almost seeded. 

TRAI wants review of 42% ceiling on tariff of pay channels

subscribers post DAS. They complain that already they are forcing subscribers to pay twice or even thrice the subscription they paid in analogue regime due to the new TRAI tariff order, rates of channels of various broadcasters, STB rentals and taxes. Increasing the subscription further will not be in the interest of subscribers and they may stop watching cable TV which will harm the business of cable operators whose only livelihood now is from the subscription amount. Earlier they had their video channels to help them overcome the financial crises through advertisements and also carriage fee but now in DAS, they are not permitted to carry any video channel. Also the MSOs do not give them any share of carriage fee. 
TRAI has also overlooked its own observation on discriminatory pricing in the latest tariff order dated 10th Feb 2014, where it clearly states that the price difference between a vertically integrated MSO and an independent MSO is as high as 85%. This goes on to show that the prices already mentioned in the RIO are very high. Thus, instead of looking after the interests of the smaller players, TRAI is helping the big players and vertically integrated groups to make more money. 

Media under fire

With more than 80,000 newspapers and over 850 satellite channels in several languages, Indians are seemingly spoilt for choice and diversity. India is coined as the biggest newspaper market in the world, over 10 crore copies of newspaper sold every day.  In the past two decades, the number of channels has grown from one-to more than 850, of which more than 410 are news channels.

Right of Way Brings More Trouble to MSOs

While drafting the amendment to Cable TV Act for mandating digitization, Ministry had ensured that all state governments provide a legal Right of Way (RoW) to cable operators and the MSOs. However while implementing DAS, the Ministry failed to ensure that all state governments do the needful by making proper legislation to allow cable operators and MSOs to use state infrastructure like the underground ducts and electric poles to sling their cables all across the cities. The result is very few states have brought in such regulation. Also, those who introduced the provision has taken it as an opportunity to exploit the MSOs to make money rather than facilitate an infrastructure that would help the state government in many ways like e-governance, flood and natural calamity warnings or promoting people friendly schemes.