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SPN India's Rajesh Kaul on TRAI tariff order, Sports Act amendment & OTT threat

Kaul also addressed the question of tech giants vying for sports rights

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MUMBAI: Broadcasters, advertisers and media agencies are currently grappling with the impact from the implementation of Telecom Regulatory Authority of India’s new tariff order. Disruption in the distribution value chain of India’s broadcasting sector has raised several questions. While some ratings agencies have reported a drop in viewership and subscription revenues, there seems to be a lack of unanimity in terms of the overall assessment.

Sony Pictures Networks India chief revenue officer and head – sports business Rajesh Kaul probably understands the TV distribution ecosystem better than most. According to the media veteran, it is too early to comment on the subscription revenue numbers for his company’s sports cluster under the new regime.

“It’s just two months old and we don’t have the complete visibility in terms of reports. Once that happens, we will be in a better position to understand. But, based on what I’ve seen so far I don’t see a major impact,” Kaul said.

The roll-out of the new regulatory framework has resulted in a blackout of channels in several parts of the country. Several consumers have complained to the regulator about distribution platform operators (DPOs) not providing them their preferred channels and packs. Under such circumstances, there’s a theory doing the rounds that unavailability of channels on linear TV will lead to increased content consumption on over-the-top (OTT) platforms, especially when it comes to sports.

“We have put all our live sports content behind a paywall on SonyLIV. That was done because of the TRAI order. So, the consumer will have to pay irrespective of whether the content gets consumed on SonyLIV or our linear channels. So we are fine with that,” Kaul added.

 Earlier in the year, SPN India pulled the plug on Sony Ten Golf HD (along with Sony Le Plex HD and Sony Rox HD) citing “dispersed and niche viewership” as the reason. There’s a widespread belief in the industry that premium and niche channels are likely to be under pressure with the new tariff norms having kicked in. With the power now firmly in the hands of the consumer, are we looking at consolidation in the near future?

“It’s very difficult to say that and too early to answer. But at the same time, the amount of content that we have, roughly around 10,000 hours of live action, at times we feel handicapped with 10 channels. There are so many events taking place simultaneously, there’s sometimes a need for more channels. So, it’s too early to talk about consolidation,” Kaul argued.

Indian sports broadcasting is now an SPN India and Star India duopoly. While former is a dominant force when it comes to cricket outside India, the latter is in the ascendancy when it comes to cricket in India. Both broadcasters, however, have made significant investment with regards to sports rights.

In October last year, the Ministry of Information and Broadcasting (MIB) proposed an amendment to the Sports Act 2007, allowing Doordarshan to air ‘events of national importance’ on private direct-to-home (DTH) and cable networks apart from rebroadcasting on its own terrestrial network and free-to-air (FTA) DTH platform DD Free Dish.

While MIB had sought feedback from stakeholders and has since put the matter on the back burner, an amendment of this nature is likely to impact the revenue of broadcasters.

“I would not like to comment on that. The matter is in the ministry, so let it remain there. As of now they are quiet, so it’s fine,” stated Kaul.

Last year, social media giant Facebook acquired the La Liga’s media rights for the Indian sub-continent for a three-year period. The company also made a very serious play for the Indian Premier League rights, which were eventually snapped up by Star. Globally, e-commerce major Amazon struck a 10-match deal with the Premier League to stream these matches on Amazon Prime Video in 2019. In April 2018, Amazon had also secured the US Open rights for the United Kingdom.

Is it a matter of time before these tech giants bid for FIFA World Cup or ICC Cricket World Cup rights?

“As of now we are not seeing that. As a linear channel, I don’t see a threat from these platforms. Three-four years from now? Maybe, yes. India is a large country, I don’t see OTT as a threat to TV at this point in time, not for the next two-three years,” Kaul explained.

With the emergence of tech titans with deep pockets, there’s a possibility of content acquisition costs skyrocketing.

“I would not comment on that specifically. But overall, rights costs in the last couple of years have not gone up,” he concluded.

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