The Telecom Regulatory Authority of India (Trai) notification giving multi-system operators (MSOs)-
large cable companies -a free hand to charge a carriage fee from TV news broadcasters has come as a
major setback for channels whose very survival now appears to be at stake. This is a regressive and retrograde step which defeats the very purpose of digitalisation. It is akin to taking one step forward and two steps back as it impinges on news broadcasters' business potential and growth imperatives.
According to experts, the decision favours MSOs and ignores the fact that most TV channels are running at a loss or at best operating with wafer-thin margins because of high cost of operations. TV broadcasters have got a rude shock as they were expecting the carriage fee to be waived off as the technological leap to digitalisation assures higher incomes for MSOs. This will further jack up costs and has the potential to turn the news channels financially unviable. "The Trai notification almost legitimises the payment of carriage fees. It does not take into consideration that with the change to digitalisation, it should have been important to expunge the entire aspect of carriage fees," said Sunil Lulla, who is on board of directors of News Broadcasters Association and also the managing director and chief executive officer of Times Global Broadcasting Company Ltd.
Matters have come to such a pass that the News Broadcasters Association, which represents TV channels, is planning to take up the issue with the information & broadcasting ministry and Trai to seek reversal of the decision. TV broadcasters have to invest huge sums of money to generate content of their programmes, which is what consumers are ultimately paying for. Apart from this, a substantial amount has to be spent by news channels to hook up the content to the satellite from where it is downloaded by the MSOs for onward distribution.
"These facts seem to have been overlooked by Trai as the regulator has given more attention to investments and business model of MSOs," a senior executive with a leading news channel said. "The issue of the freedom of the press is also involved as raising transmission costs for news would in effect tend to interfere with the people's right to know about what is happening in a democratic country," he added.
The government has decided to phase out analog cable TV networks from Delhi, Mumbai, Calcutta and Chennai by June 30, which is a positive step. "However, the technological benefits of the switchover, which will enable a larger number of channels to be carried by each MSO, will not work to the benefit of news broadcasters due to the Trai order," an industry expert said.
The government is keen on the switchover as there is a huge revenue loss due to the large scale under-invoicing of subscribers by local cable operators. According to industry estimates, neighbourhood cable operators report 20 per cent of the total number of subscribers. As a result, the government ends up losing about Rs 5,000 crore every year in service tax. Large digital distributors, including Hathway and DEN, end up losing money as they get a revenue share from a 20 to 30 per cent of the total subscriber base.
A top Trai official told
Mail Today that the decision to levy fee was meant to enable MSOs sustain business."If required, the government can take a call on it. But as of now, the carriage fee will exist for news broadcasters," he said.
Courtesy: Mail Today
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