DD Free Dish subscribers suffer as e-auctions remain on hold

Users of DD Free Dish, the public broadcaster’s free DTH service, have been left in the lurch after the government put a stop to the expansion of channels on the network.

DD Free Dish was supposed have increased its channels to 250 by the end of the 12th plan period (March 2018).

Instead, a stay on allocation of slots on the DTH service has meant that the number of channels has decreased to 72 from 80 last year.

The last auction for slots on the network was conducted in July, and another was scheduled for August last year.

However, after the elevation of Smriti Irani as the Information & Broadcasting minister in the second half of July, the operator has not conducted a single auction despite the availability of several empty slots.

Without auctions, channel-owners are not able to renew their contracts with Doordarshan and are forced to stop their transmission on the DTH service.

DIL MANGE MORE

Rajyavardhan Rathore, the junior minister for Information and Broadcasting, confirmed yesterday that his ministry has asked Doordarshan that “e-auction be kept in abeyance.”

One of the reasons, he pointed out, is that private channels that are present on the DTH service are earning more than Doordarshan.

“.. as per newspaper reports.. a private channel earns between Rs.500-700 crores (per year),” he said.

Rathore did not specify how the DTH provider plans to pry more money out of the hands of these private channels.

Free Dish currently makes money by selling its slots to the highest bidder, while the channels sell advertisements to generate their income.

Zee Entertainment, for example, earns about Rs 4,400 cr per year by selling advertisements on its 34 channels, an average of about Rs 129 cr per channel per year.

In comparison, the Free Dish got about Rs 8 cr for carrying one channel for one year in its recent auctions.

At an average of Rs 6 cr per channel, the platform could be earning Rs 1,200 cr per year if it expands its platform to 250 channels, according to the earlier plan, and auctions 200 of them. However, with limited inventory, it earned only Rs 264 cr last year.

WORRIED RIVALS

On the other side, the growth of DD Free Dish has been a major worry for its rivals like Dish TV, run by the Zee Group, and Videocon D2h.

DD Free Dish has successfully taken a lot of market share from private players in the rural Hindi belt by adding a large number of Hindi channels to its portfolio.

The rising popularity of DD Free Dish is assumed to be one of the key reasons for the poor financial performance of players like Dish TV, which gets a large chunk of its subscribers from the rural Hindi belt, in recent quarters.

The success of the Free Dish platform has even forced big broadcasting companies like Star India to tweak their business model and launch free channels.

Typically, broadcasting companies in India prefer to launch only ‘pay channels’ as these generate subscription money, in addition to the revenue generated by advertisements.

However, there is no way to collection subscription fees from the users of DD’s DTH service. As a result, they are forced to launch free channels if they want to ensure a presence on the platform.

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