3 Min Read
The Telecom Regulatory Authority of India (TRAI) on Tuesday brought back the rule restraining television channels with a subscription fee of more than Rs 19 per month as part of a bouquet. As per the earlier new tariff order (NTO 2.0) version, the price of channels forming a part of a bouquet was capped at Rs 12, which directly hit the average revenue per user (ARPU) from consumers subscribing to channels on an à la carte basis.
TRAI notified the amendments to Tariff Order 2017 and Interconnection Regulations 2017 and told all the distributors of television channels to ensure that services to the subscribers, with effect from February 1, 2023, are provided as per the bouquets or channels opted by them.
What was the norm till now
As per the current norm, when a channel is added to any bouquet or a pack, usually, the price of the pack is lower than the combined prices of individual channels on an à la carte basis.
TRAI found that the most popular channels for general entertainment, sports and movies, were priced above Rs 12 per month, and because of this, subscribers had to pay higher, à la carte rates to get access to them.
Here’s what the revised rules mean for broadcasters
– With NTO 2.0 more popular channels can now be offered at a lower rate to subscribers via channel packs. However, the opposite could also happen as the broadcasters may choose to raise the prices of all other channels.
– While earlier there was a cap on discounts that broadcasters could provide to customers was 33 percent for bouquet prices versus the sum of a-la-carte. TRAI has now allowed a broadcaster to offer a maximum discount of 45 percent while pricing its bouquet of pay channels over the sum of MRPs of all the pay channels in that bouquet.
– The discount offered as an incentive by a broadcaster on the maximum retail price of a pay channel shall be based on the combined subscription of that channel both in a-la-carte as well as in bouquets, according to the TRAI statement.
– Broadcasters will now have to submit details of changes in the MRP of their pay channels, bouquets, and composition of bouquets to TRAI by December 16. Similarly, DTH players and Multi-System Operators (MSOs) will need to submit amended Distributors' Retail Price (DRPs) by January 1.
Abneesh Roy, Executive Director-Institutional Equities, Nuvama Wealth Management, explains that this is a positive development for Zee and other broadcasters. "Essentially the regulator is giving freedom to the broadcasters to do the package, do the pricing etc."
Roy pointed out that for the last three years, subscription revenues in India for all broadcasters and for Zee, in particular, has been quite muted. "Now, because of the 45 percent discount, which is allowed in terms of à la carte and package and of course, from 12 to 19 that ceiling is there, we will see more flexibility in terms of pricing."
Speaking specifically about Zee revenue, Roy said, the subscription revenue for Zee is ballparked at around Rs 3,000 crore annual run rate. "This will add around 7 to 8 percent compounded annual growth rate (CAGR) every year. Last three years because it was under litigations, it was all on hold. So, there was no growth," he said.
“Now, on a Rs 3000 crore subscription revenue, we expect an acceleration further on that around 7-8 percent. So this adds Rs 250 crore revenue in the first year,” Roy added.
(With agency inputs)
First Published: Nov 23, 2022 4:33 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Recommended ArticlesView All
Bharti Airtel begins IPO process for its subsidiary Bharti Hexacom: Exclusive
Nov 22, 2023 IST2 Min Read
Any disconnection-related call, message claiming to be from Trai is fraudulent: Regulator
Nov 15, 2023 IST2 Min Read
Vodafone Idea Share Price: Bombay High Court directs I-T department to refund ₹1,128 crore
Nov 9, 2023 IST2 Min Read
Spam: TRAI pushes companies to seek consent before sending promotional messages
Nov 8, 2023 IST2 Min Read