New TRAI tariff order to impact ad revenue, subscription growth

New TRAI tariff order to impact ad revenue, subscription growth

Nomura predicts ZEEL's ad revenue growth to be about eight per cent.

TRAI

MUMBAI: The new TRAI tariff order by the industry regulator may affect not only the advertising revenue of Indian media companies but also subscription growth. Financial services company Nomura has predicted that near term impact remains tough due to the new regime.

According to a Reuters report, Nomura has estimated that Zee Entertainment Enterprises Ltd’s advertisement revenue growth will see eight per cent year-on-year growth in the last quarter (Q4) of this financial year. It also expects a similar growth rate for Sun TV due to the tariff order and competition in the Tamil language genre. It has also predicted that India’ largest DTH platform Dish TV will see a five per cent revenue growth in Q4.

The new tariff order allows customers to select the channels and bouquets they want to subscribe to and for broadcasters to announce the MRP of the same. Since the beginning, TRAI has emphasised that the new order will increase transparency in the system with capped prices of TV channels.

Though experts predicted that the advertising revenue could take a hit due to the new pricing, several broadcasters remain hopeful of a positive impact on subscription revenue. On the distribution side, DTH operators and large MSOs seem more enthusiastic about its impact rather than small MSOs or LCOs.

OTT platforms have rushed forward to engage consumers in the transition period of the new TRAI tariff order. Several reports have indicated that streaming services stand to gain from the change in cable TV pricing. As digital continues to steadily emerge as an alternative, content consumption avenue, the new tariff regime could stimulate the adoption rate of OTT platforms in the country.