On the other hand, cable industry representatives called for reining
in the broadcasters and the frequent rate hikes they were resorting
to, putting a cross-service restriction and, in some cases, also
suggested regulator-mandated pricing and an advertising mechanism
for pay channels.
In a lengthy presentation made made before the cable industry made
its own pitch, the IBF conveyed to the TRAI that the interim price
freeze of cable services has created confusion, opening avenues
of "potential litigation" between stakeholders.
The IBF presentation, a copy of which is available with the indiantelevision.com,
says that the regulator should not step in where revenue share arrangements
are to be formalised as such things are "best left to market
Pointing out that there are three revenue models worldwide ---
FTA sustained by only ad revenue, pay through a dual stream and
premium pay only through subscription --- the IBF said that "TV
is like print medium, and relies on
advertising and subscription revenues."
Harping on the benefits of a dual revenue stream, the broadcasters
said "ads cross-subsidise the consumer" as "without
ad revenue, daily newspapers (for example) would not exist."
Putting the blame squarely on the doorstep of the cable industry,
the IBF said lack of transparency and under-declaration was one
of the reasons for high rates of pay channels.
"Only 10-15 per cent of consumers' payout reaches the broadcaster
and a large proportion is unaccounted to the exchequer," the
IBF presentation told the three TRAI members present.
Those who attended the interaction with TRAI included What's more,
it seems the new person at the helm of the IBF executive director
(the former information and broadcasting secretary) NP Nawani, Star
India's newly appointed corporate affairs head Nitin Atroley, Zee
Telefilms vice-chairman Jawahar Goel, Turner India's Anshuman Misra,
Hallmark's Amitabh, SET India CEO Kunal Dasgupta and representatives
from south Indian channels too.
The IBF also made a strong argument that broadcasting is not a
commodity (premier movies can cost over Rs 100 million, while sports
events can cost in the hundreds of millions of rupees) and "channel
pricing is dependant on numerous issues" and "no standard
pricing formula can be applied."
Bottomline: pricing of individual channels should best be left
to market forces by encouraging competition.
On the possible restrictions on ad time on pay channels, the IBF
has pointed out that the regulator should follow a model that is
similar to the print medium as it would be "impractical to
lay down standards for compliance."
It has added further that such restrictions of revenue streams
would hamper growth and competition in the broadcast industry and
increase the cost to the consumer. "Avoid administered pricing,"
the IBF has said in its presentation.
"To the best of our knowledge, nowhere in the world is the
regulator administering the revenue sharing arrangements between
broadcasters, MSOs and cable ops," the IBF said, adding that
revenue splits are best left to market forces.
Dropping ample hints that the cable industry is to be blamed for
the CAS imbroglio, the IBF has said that CAS is just one of the
platforms for consumer addressability and transparency and not the
"A distinction needs to be made between bundling, which deprives
consumers of choice and packaging of channels in a manner to offer
additional value," Discovery India MD Deepak Shourie said,
while making the presentation, adding bouquets are a cost-efficient
The IBF has also implied that cable ops should provide boxes as
an investment to protect acquisition of a consumer, implying that
boxes should be given free of cost by the cable industry.
Dwelling on boxes and CAS implementation. the IBF came up with
the googly that success would depend on attractiveness of "competing
platforms like DTH,
As a way forward, IBF's suggestions are as follows:
*Adopt pro-competition and free market approach and withdraw price
*Foster competition between cable service providers through multiple
operators or technologies.
*Ensure cross-platform addressability.
*Avoid administered pricing.
*Don't stifle ad revenue stream as it would hamper industry's growth
and ability to re-invest
*Regular interaction with the industry is critical.
Interestingly, TRAI has asked the IBF to collate data on various
rules and regulations on broadcast and cable industry from around
the globe as also the role that is played by regulators in other
"As we see it, TRAi is likely to come out with another round
of consultation paper," an IBF member said. TRAI is slated
to have an open forum tomorrow here and also interaction with the
consumer groups and cable operators.
See Earlier report:
plea to TRAI: leave revenue aspects to market forces