There needs to be a level playing field: Tata Sky CEO Harit Nagpal on Free Dish issue

There needs to be a level playing field: Tata Sky CEO Harit Nagpal on Free Dish issue

Nagpal also shared his views on 'Prospects for Video & Broadband Aggregation'

Harit Nagpal

Mumbai: Harit Nagpal, the MD and CEO of India’s largest Pay TV distributor - Tata Sky is known to be a vocal man. Time and again, he has used several platforms and occasions to bring the industry’s concerns to the notice of the government and regulators. Outlining these issues once again at the APOS India Summit – the two day virtual-event that concluded recently, Nagpal stressed upon the need to iron out disparities in regulation that exist in the current ecosystem.

With the rapid emergence of multiple distribution formats and technologies in the past few years, he strongly believes that the “time has come for everyone to step back and take a look at the regulatory inconsistencies and biases prevailing across platforms.”

Between the three main distribution technologies of DTH, Cable and OTT, “while both DTH and cable are licensed, regulated and censored (self), DTH pays a license fee while Cable doesn’t. OTTs, on the other hand, are neither licensed, nor regulated or censored, and they don’t even pay a license fee. Just because they came in at different points in time, different rules are applied to each one of them,” said Nagpal.

In September, Tata Sky and Airtel Digital TV had written to the Telecom Regulatory Authority of India (Trai) asking the telecom regulator to address the issue of broadcasters making their pay channels available for free on DD Free Dish.

Also Read:

At the summit, Nagpal reiterated that while he appreciates Free Dish as a great channel of customer acquisition, there has to be a level playing field.  “There are roughly 100 million homes in India that don’t have a TV. They will not invest in a TV set and subscription simultaneously. Hence, at any given point in time there is a large pool that owns a TV but is not paying for subscription services. A subset of this population moves into the Pay TV universe every year, opening up a huge customer acquisition opportunity for us,” he explained, adding that “the problem begins when Free Dish starts serving them at no cost, the same content that we offer for a price.”

According to Nagpal, this is an unfair practice on the part of certain broadcasters. It goes against the current tariff regime which mandates designating of channels as either pay or FTA. “This designation should be consistent across platforms,” he insisted. “A customer in rural areas does not understand regulations, and he starts distrusting us.”

Commenting on the overall growth this year, Nagpal said, “We are north of 17 million homes; much in the same range as what we lost to FTA and economic losses faced by rural India. We have managed to keep our heads above water.”

Despite the many challenges, he believes that pay TV delivered via cable or satellite cannot be written off in India so quickly. “OTT requires high quality broadband getting into homes, in which case the customer has to pay for both content as well as the pipe. In the case of cable and satellite they pay for the content only. So, when we talk of the masses, Pay TV is here to stay. Out of the 100 million homes without a TV some will keep getting them every year, and those numbers are far larger than the growth of paid OTT. Pay TV and FTA will also coexist and grow.”

Even though DTH may not be facing an existential threat from either Free Dish/FTA or OTTs, its content that has historically been ‘mass’, will have to evolve, asserted Nagpal. “The masses also want innovation which is why there are nine million HD homes today, and many with HD are now looking for something new. Innovation has, therefore, constantly been on our radar. With regard to content as well, there is a very large number of discerning viewers among those who do not have access to the pipe. They are not happy with the ‘saas-bahu’ or the content of the past. There is a niche which is likely to grow, for which content needs to be invested in by broadcasters.”

In fact, trends show that customers are not going off Pay TV even when they can afford or avail streaming services. Sharing his observations, the Tata Sky Nagpal stated, “The premium end of our user base did not switch off their Pay TV regardless of having access to VOD services. Binge Plus was an attempt to cater to this set of audiences. Whether a consumer wants to watch OTT or Linear on phone, tablet or the TV set, my job is simply to make it convenient for them.”

In this space again, he welcomes the advent of aggregators like Prime Channels and Google TV to grow the market and industry together.

Concluding the discussion with his thoughts on Tata Sky and the overall broadband market, Nagpal shared, “Broadband was never intended for the mass market because we didn’t have a network of fibre in the ground across the country. Our intention is only to reach our premium customers, and hence, it will remain a niche, very high-quality broadband play for us.”

As for satellite, he averred, “In my understanding broadband is not reaching rural areas not because it is difficult to lay a wire to that place, but the fact that it will be difficult to find enough people in a village who can pay Rs 800 per month, month-on-month. Unless it can be delivered at the rate of Rs 200-300 per month, the economics of which is unviable, it looks unlikely. But we may be surprised in the future.”