Regulators

TRAI's toothless content aggregator regulations

The Telecom Regulaotry Auhtority of India  (TRAI) was right in both identifying and bringing in new regulation in an attempt to curb content aggregator aggression (read: broadcaster aggression). However, the restrictions are very minimal and on the face of it, they don't seem to have too much teeth. Aggregators can get renamed as Agents but will TRAI's effort at redoing and notifying regulations for them really act as an agent of change?

 

There is no restriction on the ownership of agent companies or how many broadcasters they can represent. (Will need to be addressed in issue of cross media.) Broadcasters belonging to the same group can bundle channels. For the immediate future it is more likely to lead to a futile exercise in splitting existing contracts and  and overtime and consulting fees for the guys in black suits (read: lawyers).

 

Already agreed terms including carrying weak channels and desired packages are the tradeoffs by which the DPOs negotiate to their advantage, so contrary to TRAI’s belief that they add to unwanted costs, they actually subsidize the DPOs costs – whether for carriage, packaging or for a preferred LCN.

 

Restricting multi-broadcaster packages is not important. What is important are the DPO’s packages which are what subscribers eventually subscribe to. As mentioned, these are negotiation tradeoffs.

 

In any case most of the channel pricing and bouquets evolved arbitrarily at a time when there were already existing TRAI restrictions on a-la-carte, bouquets, price freeze on existing channels etc and very often broadcasters introduced highly priced new channels to offset the freeze on existing channels pricing. Even internal allocations between various broadcasters within an aggregator skewed rationale on pricing.

 

The new regulations have not addressed many potent issues which have been plaguing the business and continue to beg solutions. For starters, let us understand that the entity signing the RIO is of little consequence to the consumer.  Where are the guidelines for DPOs to price to consumers? Should the retail pricing be determined by the DPO or Broadcaster and who should communicate this to the consumer?  Same goes for the packages. Is the DPO the real content aggregator buying in wholesale and then retailing to consumers or is he merely offering his delivery infrastructure and payment gateway for a commission?  What is the business model TRAI envisages? Is it going to continue as a B2B or should there be complete transparency to consumer in a B2C approach? 

 

Third party channels within aggregator/agent will be most likely impacted. The Stars and Zees are big enough bouquets by themselves, same goes for the TV18/Viacom18 group channels. (Presuming 50 per cent ownership qualifies to label a broadcaster a Group Company!). Yes, Sony and Discovery channels on paper need to be split but their distribution venture has survived many long years and they can resolve any internal issues without upsetting present equations.

 

The onus is now on the various DPOs - whether DTH or MSO - to leverage the only real advantage and actually negotiate separately for each of the various broadcasters’ bouquets. Some positive effect of this is likely but it would take a while for the dynamics of negotiations to change. For now it will more likely be just a paper tiger.

 

All of this makes sense only if the end objective of DAS is achieved: which is individual consumer choice and billing. For now it seems to be stuck in a farcical CAF exercise. No one has really asked the consumer if he is happy paying his 150-200 bucks (ARPU) and wants to continue having his unlimited thali and buffet! And if one were to do the maths on this basis for current pay TV homes and allocate say 40 per cent to content- well, everyone’s happy!

 

(The author is a media observor and consultant, and the views expressed are his own.)

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