TRAI TARIFF PLANS: How to deal with higher TV channel prices

Airtel Digital’s interface for choosing new TRAI packs & channels

With only 36 hours to go for TRAI’s deadline to implement new tariff plans for cable and DTH platforms in India, all DTH providers and most cable users are faced with the dilemma of how to choose the channels and packs they are going to watch in the new regime.

The new system was supposed to dismantle channel packs and improve consumer choice by allowing them to pick and choose the channels they want to subscribe to.

However, the TRAI has chosen not to implement a crucial provision of the new regulation, known as the 85:100 rule, which would have ensured lower prices for individual channels.

As a result, channel prices have risen enormously, with most popular channels costing Rs 22.42 per month.

A family subscribing to 30 such popular pay channels will have to shell out around Rs 820 per month in the new scheme against nearly Rs 300 per month at present.

As such, most consumers are faced with two options — stop watching popular channels like Zee TV, Star Plus and Sun TV and stick to low-cost and free channels, or activate channel bouquets from broadcasters like Sony, Star and Zee in the hope of cutting costs.

It should be noted that even if one relies on broadcaster packages, most subscribers will end up paying around twice or thrice as much under the new TRAI system compared to earlier if they try to watch the same channels. This is especially true for those people who used to subscribe to monthly packs in the range of Rs 200 to 250 per month.

On the other hand, high-end subscribers who used to subscribe to Rs 600-per-month packs in the earlier system, will see only a small, or no, rise in their monthly bill.

COMPLICATED INTERFACE

While DTH players have given a relatively painless way to activate channel packs, choosing channels one-by-one remains a pain on some popular platforms.

For example, Tata Sky and Airtel Digital have provided system in which the user is faced with a long list of nearly 500 channels sorted alphabetically by their name.

The user is supposed to go through each of these channels and mark off the ones he wants.

As the user ticks off the channels one by one on Tata Sky, there is no intimation about how many slots have been filled and how many remain free, while Airtel does display the number that has been selected so far.

Similarly, there is no way on Tata Sky to figure out if a channel in the a-la carte list has already been added via an add-pack, while Airtel Digital does automatically tick all the relevant channels in the a-la carte list when a user selects an add-on pack.

The most frustrating aspect of the new system is that a-la carte channels are sorted by their name and not according to different languages or genres. This is true in case of both Airtel Digital and Tata Sky, and has made it difficult to locate channels that are relevant to the customer.

In comparison, Sun Direct, Dish TV and D2h have various options to display only those channels that belong to a particular genre, language or resolution, making the process of selecting a-carte channels far smoother.

INCREASED COST

No matter what platform the user is subscribed to, he or she must make up the mind on which of the two strategies he or she wants to go with — stick to free and cheap channels, or be ready — in most cases — to pay up to two to three times to watch the same channels as before by going for broadcaster bouquets.

It should be noted that if enough users opt for the first option — of boycotting expensive channels and packs — then the prices of these channels — currently at Rs 22.42 — will be brought down to the single digits in coming days.

That is because channel owners stand to make no gains by restricting the viewership of their content to only those willing to shell out Rs 500 or more per month, as this segment comprises only 25% of the total market.

Currently, channels like Star Plus, Zee, Sony and Colors are watched by those who can shell out only Rs 200 per month — or about 90% of the total pay TV market.

If these 22-rupee channels are seen only by 25% of the total audience, then broadcasters will see their advertising revenue fall by more than half.

This will be a painful experience for the channel owners as advertising revenue accounts for about 65% of their total revenue.

To make up for this loss, broadcasters must see a doubling of their subscription income. Will that happen? The answer will only be clear by about Feb 20, when BARC will release viewership data for the first week of February for all channels.

If the viewership of the 22-rupee channels takes a big beating, the chances of a price cut become stronger. If the viewership falls by only about 35% or so, the broadcasters are likely to continue with the current pricing.

BARC viewership data for January 3rd week

You can see a list of the popular free and cheap channels (in green) and the premium channels (in blue) sorted by language and genre in the lists below.

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