Broadcasters and distribution platform operators (DPOs) are misusing pricing flexibility “to throttle market discovery of TV channel prices by giving huge discounts on the bouquets”, the Telecom Regulatory Authority of India (TRAI) has observed.
“It has been observed, from the tariff declared by the broadcasters under the new regulatory framework, that broadcasters are offering bouquets at a discount of up to 70 per cent of the sum of à la carte rates of pay channels constituting those bouquets,” it said in a statement.
TRAI is now set to take a relook at imposing curbs on discounts offered by broadcasters on their channel bouquets. It released a consultation paper on Friday, seeking views from stakeholders on the issue.
The regulator believes that in the absence of any restrictions on discounts on bouquet offerings, broadcasters are making the prices of their à la carte channels “illusory”, and that this is impacting consumers’ choice.
In its initial tariff order, the regulator had said channel bouquets should not be priced lower than 85 per cent of the sum of the MRPs of all the channels in the pack.
However, this was held as “arbitrary and unenforceable” by the Madras High Court. Subsequently, the Supreme Court dismissed a TRAI petition for the reinstatement of a 15 per cent cap on channel bouquet discounts after the authority withdrew it.
Advantage bouquets
Cheaper prices have led subscribers to increasingly opt for bouquets instead of subscribing only to channels that they prefer to watch, industry observers said.
It also pointed out the challenges of having too many bouquets with a similar channel mix being offered by both broadcasters and DPOs. Consumers often get confused and opt for packs suggested to them, rather than exercise their freedom to choose specific channels, it said.
In the new consultation paper, the regulator has also sought stakeholders’ views on other key issues, such as whether multi-system operators (MSOs) and direct-to-home (DTH) service providers should be allowed to charge variable network capacity fee (NCF) for different regions.
It has also sought views on whether provisions should be made to enable discounts on NCF and distributor retail price for multi-TV homes. Currently, while some DTH players charge lower NCF for the second TV connection, MSOs levy uniform charges.
TRAI will also look into other issues such as whether broadcasters and DPOs should be allowed to offer discounts on long-term subscriptions.