TRAI’s arbitrary, broadcast industry-growth-hampering amendment of the NTO shows lack of understanding; IBF will evaluate all including legal options

image IBF decries TRAI NTO Amendment -MediaBriefThe Indian Broadcasting Foundation has expressed its shock and dismay at the latest notification from TRAI issued on 1st January 2020, amending the new tariff order (NTO) and interconnection regulations. The IBF has perfectly justifiably described the amendment notification as broadcast industry-growth-hampering, and that it demonstrates lack of understanding by the Regulator. The apex body of broadcasters in India has also said it will strategize its future course of action, including evaluating legal options, based on feedback from its member channels and networks.

TRAI’s arbitray, sans-logical-reasons amendments of the NTO

Per the new amendments, TRAI has reduced the cap on the MRP of individual channels, which can form part of any bouquet, to Rs.12 per month, from the earlier cap of Rs.19. Less than a year ago, TRAI itself determined that the price per channel can be Rs.19, which has now been reduced to Rs.12 without giving any logical reason. Thus making the change totally arbitrary.

The Regulator’s intent was to address infirmities in the new Tariff Order (NTO); however, it has been done solely at the cost of the broadcasting fraternity.

Over-regulation, inconsistency and frequent changes in the regulations by the Regulator has already cost the broadcast sector 10-12 million TV subscribers as per various industry estimates in 2019. These amendments will compound the problem further

The regulator has also sought to impose twin conditions for bouquet formation, effectively introducing a cap on bouquet pricing which was left untouched in the NTO.

Coming barely a few months after TRAI notified the NTO effecting a disruptive change of the distribution ecosystem, these amendments will severely impair broadcasters’ ability to compete with other unregulated platforms and adversely affect the viability of the pay TV industry.

In the last 15 years of regulating the broadcast sector, TRAI has issued more than 36 tariff orders and ancillary regulations in an attempt to micro-manage what is arguably the cheapest form of news and entertainment in the world. This goes contrary to the Government’s stated position of ensuring the “ease of doing business”.

While TRAI claims the amendments are in the consumers’ interest, it appears to have conveniently forsworn the interest of broadcasters. This change will only benefit the DPOs as they have been allowed to charge as much as Rs160 for the channels that are supposed to be ‘FREE’

While TRAI claims the amendments are in the consumers’ interest, it appears to have conveniently forsworn the interest of broadcasters. This change will only benefit the DPOs as they have been allowed to charge as much as Rs160 for the channels that are supposed to be ‘FREE’

Content is king and broadcasters invest substantial resources in producing and acquiring world class content — be it entertainment, knowledge or live sports. By packaging a variety of genres in economically priced bouquets, broadcasters offer the Indian consumer most affordable sports and entertainment globally. This, despite an excessively regulated broadcasting environment.

IBF in its response to TRAI’s consultation paper had pleaded with the regulator to adopt a “soft touch” and allow the industry to come to terms with the NTO before making further changes.

In fact, TRAI itself had acknowledged this need by proposing a two-year moratorium on further regulation, so it appears all IBF’s pleas have been ignored. Unfortunately, in this exercise, content creators and owners have been dis-empowered and the entire authority has shifted to the middlemen.

Expressing its disappointment on the development, the  Indian Broadcasting Foundation (IBF), the apex body of broadcasters in the country, has conveyed that these changes will have very significant and industry-growth-hampering ramifications for the Broadcast sector. At a time when the economic environment is tough, this tariff order will force a lot of channels to shut down and will lead to unemployment in the sector.

While the Government is looking at ramping up growth, these changes will have the opposite effect for the Broadcast sector just recovering from the twin shocks of NTO in the first half of 2019 and the ad slowdown business.

IBF has always believed that the consumers pay for the value of the content. Post NTO, the ecosystem had just settled down with about 200 million consumers choosing their favourite channels. The changes must be allowed fully settle down and the market forces to prevail while resisting the temptation to continuously tinker with the regulation.

The Regulator’s intent was to address infirmities in the new Tariff Order (NTO); however, it has been done solely at the cost of the broadcasting fraternity.

Over-regulation, inconsistency and frequent changes in the regulations by the Regulator has already cost the broadcast sector 10-12 million TV subscribers as per various industry estimates in 2019. These amendments will compound the problem further.

IBF is disappointed at the lack of understanding shown by the Regulator. It will strategize its future course of action, including evaluating legal options, based on feedback from its member channels and networks.

MediaBrief.com view: Time for a consumers-led PIL

Coming from the Indian Broadcasting Foundation, which is the top body of broadcasters in India — members of which provide channels and programmes that deliver about 90% of television viewership in India through offerings that cater to most of India’s diversity and plurality in every language and in every genre of television viewing — TRAI must take these views very seriously into consideration and roll back the arbitrary amendments that will hurt the broadcast industry irreparably, causing channels to shut down, jobs to be lost, and, worst of all, deprive consumers of a large number of channels that the pre-NTO ecosystem gave them access to at a fraction of the costs that TRAI’s completely unwarranted and unwelcome NTO  will demand consumers pay for viewing or having the opportunity to view the same number of channels in the post-NTO regime.

It is perhaps time for a consumers-led PIL against not just these arbitrary amendments to the NTO but the NTO itself from an over-zealous regulator who has displayed an alarming  lack of understanding on two aspects — the priorities of the responsibilities and business of the media, and the need to remain equitably equi-distant from all stakeholders in the value chain. The PIL should be filed for the single and most important reason that ever since it was announced and enforced in myopic fashion, the NTO has deprived entire families of the information, knowledge, entertainment and aspirations that they used to receive pre-NTO through a much larger number of channels at a smaller outlay per month.

The position of the IBF on the new amendments to the NTO by TRAI are in line with its endeavours to work closely with and align industry, policy makers, regulators and partners so that the television sector in the media and entertainment industry grows to its fullest potential in an equitable manner. But the amendments to the NTO hit at the very heart of that potential to grow and to serve consumers and equitably empower all stakeholders in the value chain, better.

Also read: Cartelization? Arasu, SCV, VK Digital black out ZEE channels in TN ‘over pricing’; customers irate

Your thoughts, please