DD Free Dish escapes TRAI’s Dec 29 tariff order, for now

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The December 29 deadline, by which all DTH and cable networks have to bring their tariffs and prices in line with a new TRAI format, is unlikely to have any effect on the operations of DD Free Dish, the country’s only free DTH service.

According to industry observers, DD Free Dish is exempted — for now –from the tariff order due to the fact that its feed is currently unencrypted.

“The TRAI tariff order clearly says that it is applicable only to addressable systems. We believe Free Dish is exempted from the scope of the regulations,” said a Mumbai-based stock analyst who tracks media companies.

The order does indeed say that it is “applicable to broadcasting services relating to television provided tosubscribers, through addressable systems..”

It also goes on to define ‘addressable systems’ as ” an integrated system through which transmission of programmes.. can be done in encrypted form, which can be decoded by the device or devices at the premises of the subscriber..on the choice and request of such subscriber..”

UPDATE: The TRAI has written to broadcasters seeking an explanation as to how they are giving some channels free to Free Dish and for a price to others.

USERS WORRIED

The new tariff rules had caused a lot of concern among users of Free Dish, India’s biggest DTH service, as the rules require channel owners to charge the same price from all cable and DTH services.

At present, many of the channels that are chargeable on private DTH services are given free of cost on Free Dish.

If DD Free Dish was also to come inside the scope of the TRAI Tariff Order, it would require these channels to become chargeable, and either Prasar Bharati or Free Dish users would have had to pay for them.

In such a situation, most of these channels would have had to be removed from the Free Dish.

The new rules that come into effect on Dec 29 also prohibit the mixing of free and paid channels in a single package. This too would have created problems for Free Dish as it has only one package for all its channels, including free and paid.

FREE DISH ENCRYPTION

Even though the platform is likely to escape unhurt for now, the new rules have potential to create problems for the Free Dish service in the future because of Prasar Bharati’s ongoing encryption plan.

Ten months ago, information and broadcasting minister Rajyavardhan Singh Rathore said the public broadcaster has given permission to eleven companies to manufacture set top boxes with encryption for use DD Free Dish.

He said 10 private companies, along with government-controlled BECIL or Broadcast Engineering Consultants India Ltd, have been licensed to manufacture the new boxes under the upcoming encryption program.

The plan was to eventually encrypt the entire service using an Indian platform known as iCAS. After that, people who wanted to watch the service would have to buy a box from one of the 11 approved manufacturers.

Prasar Bharati’s encryption drive is motivated by two factors: First, it wants to give greater comfort and control to channel owners about the distribution.

Some broadcasters have avoided coming to free platform so far because they won’t want their channels to be watched outside India. But such a degree of control is not possible without encryption.

The second reason is that Prasar Bharati generates revenue from Free Dish by charging channels for being on the platform. This charge is based on the number of people who use the DTH service.

However, in the current scenario, there is no easy way to find out exactly how many people are subscribed to Free Dish. Informal surveys have pegged the reach of the service at 30 million. In comparison, all five paid DTH operators have a reach of less than 70 million.

Moreover, Free Dish is by far the fastest growing platform in India, growing from 22 million last year to about 30 million this year, even as paid platforms have stagnated.

Prasar Bharti believes if its users can buy their boxes only from approved box-makers, it would be possible to track user numbers more accurately. With more accurate numbers, it believes it will be able to get a higher remuneration from the channels who want to be on the platform.

However, the new TRAI rules have complicated the situation.

If Prasar Bharati goes ahead with the planned encryption, then DD Free Dish would fall within the definition of ‘addressable platform’ and be covered by the regulations.

In such a scenario, the only alternative for channels like Star Utsav and Sony Wah to remain on the platform would be to rebrand their feed to Free Dish under a new name.

However, if it remains unencrypted, the new TRAI rules could be a big boon to the service.

This is because the new rules — and the way the broadcasters have tried to use them to increase their prices — are likely to remove a key differentiating factor for paid DTH — the presence of premium channels like Star Plus and Zee TV.

Broadcasters have used the TRAI tariff order to try to increase their revenue from paid DTH services, and this is likely to increase prices of monthly DTH packs. This will force paid DTH services to drop some or all of the premium channels from their entry-level packs.

Such premium channels may be available only in packs costing Rs 300 per month or above. However, if the premium channels are dropped, then the entry-level plans of paid DTH will look increasingly similar to what DD Free Dish has to offer, for free.

This is likely to drive more users to Prasar Bharati’s free DTH service, especially in the Hindi-speaking market where it has a substantial presence already, unless broadcasters cut the prices of their premium channels quickly.

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