Offer Premium channels as a la carte, don't bundle: TRAI

NEW DELHI: The Telecom Regulatory Authority of India, which issued draft DAS tariff earlier today, decided that a broadcaster will be free to declare any of its channels as ‘Premium' so long as its maximum retail price is notified to the subscriber.

TRAI considered all the issues relevant to the classification and pricing of ‘Premium channels’ recognising the fact that encouragement of quality content through a rational classification and a distinctly different ‘Premium' pricing policy will benefit all.

TRAI decided that the premium channels shall be offered only on a-la-carte basis to subscribers and shall not form a part of any bouquet or package in the entire value chain.

The distributors of television channels will also display MRP of Premium channels in their EPG and also provide a special flag in EPG for easy identification of Premium channels by subscribers.

It noted that, with a maturing TV audience, a demand was felt for content that may not have a mass following. This is borne by the fact that there have been an increasing number of channels that cater to a niche audience. A number of niche channel issues like redefinition, classification criteria, tariff fixation, gestation and related facets were posed for consultation.

It noted that most stakeholders responded enthusiastically to the idea of redefining ‘Niche channel’ in the new scenario and their regulation in a manner that is different from mass viewing channels like general entertainment, etc. The stakeholders also expressed concerns about possible misuse if genre price cap is totally withdrawn for certain category of the content while submitting their suggestions for classification of such niche channels.

TRAI noted that broadcasters provide popular content for mass viewing to get large viewership of their channels, and hence more revenue from advertisements. This has resulted in minimal investments in the development of content which is viewed by a select class of viewers. Such content is not limited to niche channels only; there is other type of content which has a select viewership such as education, health, and women welfare etc.

The advertisement revenues for Premium channels may also be relatively limited due to the limited viewership. Therefore, TRAI is of the view that the MRP of a premium channel will be under forbearance. It can be argued that forbearance may allow the broadcasters to fix high MRP for premium channels. However, high MRP may deter customers to subscribe to such channels impacting the subscription as well as advertising revenue of a broadcaster. This will compel broadcasters to price their premium channels reasonably.

The categorization of a ‘Premium channel’ will be agnostic of the content, format (SD/HD etc). Once a broadcaster has reported a channel as a ‘Premium channel’, it will continue to do as long as the broadcaster chooses to, subject to a minimum period of six months. Any reported change in the category of a ‘Premium channel’ to other genre would then be subject to the reporting related to the genres and associated ceilings.

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