The Telecom Regulatory Authority of India (TRAI)’s new regime for cable operators and DTH companies will not really reduce bills for customers, is what a report by CRISIL shows. Analysis by the ratings firm showed that the new TRAI rules will help benefit popular channels and OTT platforms.
The report adds that the new TRAI guidelines could increase the monthly bill of most subscribers of television channels. The analysis by CRISIL is assuming that subscribers opt for the top 10 channels by viewership in addition to the free-to-air (FTA) ones, which will increase their bills.
“Our analysis of the impact of the regulations indicates a varied impact on monthly TV bills. Based on current pricing, the monthly TV bill can go up by 25% from Rs 230-240 to ~Rs 300 per month for viewers who opt for the top 10 channels, but will come down for those who opt upto top 5 channels,” Sachin Gupta, Senior Director, Ratings said.
When TRAI rolled out the new regime, the idea was to reduce customer bills and give more freedom and transparency to them. TRAI has also limited prices of each individual channel to a maximum of Rs 19.
But CRISIL is predicting that the new regime might actually hasten adoption of over-the-top or OTT services like Netflix and Hotstar in India.
The agency views the new rules as being a mixed bag for viewers and distributors. “In all this, OTT platforms could emerge as the big beneficiary because many viewers could shift because of rising subscription bills. And low data tariffs also encourages viewership on OTT platforms,” Nitesh Jain, Director, Ratings said.
The ratings agency is predicting that the new regime might drive consolidation in the broadcasting industry as content will be the key differentiating factor given the fares have been fixed by the regulator.
CRISIL says subscription revenues of broadcasters could rise 40 per cent to Rs 94 per subscriber per month compared with Rs 60-70 now. The reasoning is that viewers will opt for popular channels which are likely paid and have a higher price tag, thus adding to the bill.
It also notes that large broadcasters will have greater pricing power in the regime. The new rules will also make it tough for newer broadcasters with less-popular channels to piggyback on packages, while the least popular ones will face business challenges and might go off the air, according to the ratings agency.
For distributors, CRISIL says the new rules are a “mixed bag,” as they could lose out on the benefits of value-added services such as bundling content across broadcasters, customisation, and placement revenue.