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Zee Entertainment slashes channel prices ahead of TRAI regulation

Zee’s new tariff card for HD channels

Zee Entertainment, one of the four big broadcasting groups of India, has become the first player to bring its channel prices in line with an upcoming regulation issued by the Telecom Regulatory Authority of India.

Zee’s new tariff card prices its channels a fraction of what they are being sold for in the market at present.

For example, under the new tariff, the maximum retail price of Zee Studio HD — the high definition Hollywood movie channel from the group — has been fixed at Rs 7 per month.

In comparison, the present nprice being charged by Airtel Digital DTH service for the channel is Rs 51 per month. Tata Sky charges Rs 50 per month, while Videocon D2H charges Rs 23 per month.

The regulator had, in early March, unveiled a comprehensive set of rules aimed at preventing companies from forcing customers to buy unwanted channels.

Broadly, the rules prevent companies — both cable and DTH players as well as broadcasters like Zee and Star India — from forcing customers to buy unwanted channels by tying them together with channels in heavy demand.

It was seven years ago that the regulator first targeted the practice of bundling channels together. In 2010, it issued its first order on the subject, forcing all content distributors to offer their channels on an ‘a la carte’ or individual basis.

It said such a move would help customers pick and choose the ones they wanted to see.

However, cable, DTH and broadcasting companies got over the regulation by hiking the price of individual channels to unaffordable levels, forcing users to subscribe to bouquets.

Most HD channels, for example, are sold at Rs 50 each, and a customer who wants to see subscribe to 50 of them will have to pay around Rs 2,500 per month.

However, if the customer was willing to watch the channels that the DTH operator or the broadcaster wanted him to watch, he could get 50 HD channels for just around Rs 200 per month.

TRAI addressed this problem by unveiling a new set of rules in March that linked the price of a bouquet of channels to their individual prices. It said a broadcaster can only offer a maximum of 15% discount under the bouquet system over the individual channel price.

So, if the broadcaster wanted to sell a bouquet of 50 channels at Rs 200, then the sum of their individual prices could not be more than Rs 235.

VISIBLE IMPACT

Though others are dragging their heels, Zee Entertainment seems to have decided to get ready for the impending change.

The company has unveiled affordable rates for all its channels, including the nine High-Definition offerings that it has.

The highest price for an individual channel is for the newly launched Zee Marathi HD, which will retail for Rs 18 per subscriber per month. The non-HD version of the channel has been priced at Rs 14.

The second costliest is Zee TV HD at Rs 16, followed by Zee Bangla HD at Rs 14. The standard versions of these channels are priced at Rs 12 and 10 per month respectively.

No DTH or cable operator will be able to charge a higher rate for the channel, though they could charge less, or even zero.

LITIGATION

The move has irked the broadcasting industry, three companies, Bharti Airtel, Tata Sky and Star India, have approached various High Courts seeking a stay on the new rules.

The three cases of litigation related to the new rules are being fought in the Delhi and Madras High Courts.

While Star India has filed its petition in the Madras High Court, Tata Sky and Airtel Digital have approached the Delhi High Court.

Star India wanted a stay on the implementation of the order, which is scheduled to come into effect in early September, but the High Court refused to grant such a stay.

Airtel’s existing tariff

The broadcaster then approached the Supreme Court, which allowed a stay, but instructed the Madras High Court to hear the case on a day-to-day basis and come to a verdict by July 10.

It is believed that the losing party will then appeal to the Supreme Court, which will still have time to decide the appeal by July end, allowing for the implementation of the order in September.

Meanwhile, the Tata Sky and Airtel Digital litigations will be taken up by the Delhi High Court for the first time tomorrow.

The companies argue that the government does not have the right to curtail their right to price their offerings. However, the TRAI has argued that it has the right to bring in pricing rules to ensure a level playing field for bigger companies — such as Star India — and smaller broadcasters such as Balaji.

Under the current system, it has argued, companies that operated scores of channels enjoy an unfair advantage in pushing their channels via bundling.

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