Pricing double whammy makes it an unhappy Diwali for Indian broadcasters

It has been an unhappy Diwali so far for Indian broadcasting. Two recent events mean they cannot price their channels freely nor can they make money on sports rights. How will the Rs 660-billion industry that employs 1.65 million people (directly and indirectly) deal with this double whammy?

 

Take the first. On October 30 this year, the Supreme Court upheld the Telecom Regulatory Authority of India’s tariff order of March 2017. And therefore its right to decide on pricing of content, though Star India had argued that a broadcaster had that right under the Copyright Act. This column has long argued that in a highly competitive market like India, the broadcasters should have the right to price their channels. And that the principles that apply to pricing a commodity like voice cannot be applied to content — whether it is sports, films or entertainment.

 

The second event? In mid-October came the move to amend the Sport Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act of 2007. The Sports Act mandates that private broadcasters have to share the live feed of sporting events of “national importance” (without ads) with Prasar Bharati Corporation. It runs both All India Radio and Doordarshan, the state-controlled broadcaster. This was meant to enable people who were only watching DD (either on terrestrial or its DTH service, DD Free Dish) access sporting events.

 

But the Cable Television Networks (Regulation) Act of 1995 makes it compulsory for all private TV distributors to carry 24 DD channels. This created a piquant situation. If ESPN had paid say a billion dollars for a cricketing event, under the Sports Act it had to share the live feed with DD (terrestrial and Free Dish) which would be about 20-25 million homes. But because of the Cable Act, all of India’s 187 million, TV homes whether they are on Tata Sky, Hathway or Dish TV get DD and and therefore a free sports feed. This took away ESPN’s audience and therefore its ability to recover its cost and make money — either through advertising or through pay revenues. Last year, the Supreme Court ruled that the live feed re-transmission was meant for DD-only homes — that is only those on terrestrial or DD Free Dish.

 

Earlier this year, the Ministry of Information and Broadcasting (MIB) directed cable operators and multi-system operators to run tickers saying “The match/game can be viewed in free-to-air mode on DD Sports Channel, on DD Free Dish and DD’s terrestrial network.” Later all channels airing live sports events of “national importance” were asked to do so. So ESPN now has to run a ticker that tells its audience to go watch a cricket match that it has paid for, on DD.

 

After this came the proposed amendment to the Sports Act — making it mandatory to share the feed for re-transmission on every distribution platform DD is carried on, private or state-controlled. Currently, the feedback on this is being collected.

 

Essentially this proposed amendment amounts to appropriating by law, the rights that another broadcaster owns. What it means for the whole idea of rights, property and public broadcasting are debates that could last for hours. DD barely reaches 8 million homes on the terrestrial network. The future of DD Free Dish, a huge success with an estimated 15 million homes at one point, is unclear. Last year, the MIB pulled the plug on auctions that gave slots to private channels, a big pull on DD Free Dish. Given the wide choice they have, most viewers on a private network say a Tata Sky or Dish TV would not go to DD to watch a match except because it is free. And it is free to watch because of the contortions of the MIB.

 

The big question then is the one that every article, debate and committee on Prasar Bharati boils down to — what is DD’s role in our lives? Is it a public service broadcaster or is it meant to compete with private broadcasting? Prasar Bharati, a loss making, grossly over-staffed organisation will not be able to bid or produce the kind of sports that private broadcasters do. And if sports broadcasters are forced to share not just the feed but also actively push their audience away from their channels onto DD, why on earth should they bid for rights? @vanitakohlik

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