TV channels get price-cuts ahead of new pricing formula by TRAI

Details of Star India’s promotional offer

Some of the popular television channels owned by major broadcasters like Star India, Zee Entertainment and TV18 have seen their prices reduced on a temporary basis as the broadcasting regulator puts the final touches on a new law aimed at bringing down individual channel prices and curbing anti-competitive practices.

The cuts come barely a week after sector regulator TRAI completed its process of receiving comments and counter-comments from stakeholders, in which an overwhelming majority supported the imposition of stricter measures to prevent broadcasters from shoving unwanted channels onto cable companies and consumers.

If TRAI goes ahead with the proposed curbs, prices of popular TV channels are likely to come down by 50%-60%.

As if in anticipation, all major broadcasters have cut the prices of some of their popular channels by 37% over the weekend. Prices of the standard-definition variants of channels like Star Plus, Zee TV and Colors have been cut to Rs 12 from Rs 19, even as their HD variants will continue to be priced at Rs 19 each.

According to a formula proposed by the regulator, prices of individual channels cannot be higher by more than 15% compared to their price inside various packs.

In other words, if Star Plus is priced at Rs 6 as part of a package, then it has to be sold at no more than Rs 6.90 outside the pack as well.

At present, channels that are priced at around Rs 6-8 inside packs are being sold at Rs 19 outside the pack.

This has been done to discourage people from picking and choosing the channels they want to activate, and to force them to buy big packs that come with lots of channels — wanted and unwanted.

TRAI has moved to put an end to this practice after getting complaints from both consumers and cable operators.

While consumers complained of a sharp increase in their monthly cable bills after the new system came into place, cable operators are unhappy at being forced to carry ‘junk’ channels simply because broadcasters have included them in their packages.

According to DTH operator Tata Sky, for example, the amount of money collected from consumers and transferred to channel owners as pay-channel charges has jumped by 40%-50% after the introduction of the new tariff order at the beginning of the year.

“The subscribers have borne the brunt of these higher costs and hence the large number of grievances from subscribers,” it pointed out in its response to TRAI’s proposal to bring down channel prices in line with pack prices.

Cable operators’ associations — representing thousands of cable operators across the country — have also written in, pleading with the regulator to rectify the current situation.

Many have pointed out that while channel owners can continue to monetize their content via apps and IPTV, cable operators will be left without a business to run if consumers continue to disconnect their connections due to high prices.

Many cable operators suggested that in addition to bringing individual channel prices down to the level of packs, TRAI should also impose limits on the number of packs that broadcasters come out with.

At present, some broadcasters offer 70 packs or more, confusing consumers and making it difficult for cable operators to present them to their subscribers, they pointed out.

Broadcasters, on the other hand, continued to maintain that they should be allowed to price their channels and packs as they see fit.

Nevertheless, the latest move by the broadcasters suggests that they may be, in some ways, bracing themselves for price cuts.

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It should, however, be noted that the price cuts announced by broadcasters are not permanent, but are in the form of ‘promotional offers’.

Promotional offers are time-limited schemes that lapse automatically after a certain number of weeks.

TRAI will now hold an ‘open house discussion‘ in New Delhi on this Friday as a final step before coming out with its new regulations aimed at addressing the complaints arising out of the implementation of the new tariff order.