TRAI's New Rules Likely to Increase Cable TV, DTH Bills: Crisil

Bills of cable TV and Direct-To-Home (DTH) services are likely to increase for most subscribers, a Crisil report Stated here on Monday.

The report stated that the new standards, which came into force on February 1, could benefit Over-the-Top (OTT) platforms.

“The system capacity fee (NCF) and channel costs declared by broadcasters and distributors as per the Telecom Regulatory Authority of India (TRAI)’s new guidelines can raise the monthly bill of the majority of subscribers of tv channels,” the research report stated.

It said that the rules”are a mixed bag for viewers and vendors”.

Commenting on the report, Sachin Gupta, Senior Director, Ratings at Crisil stated:”Our evaluation of the impact of the regulations indicates a varied effect on monthly TV bills. Based on current pricing, the monthly TV bill may go up by 25 percent from Rs. 230-240 to Rs. 300 per month for audiences who opt for the top 10 stations, but will return for people who opt up to top five stations.”

Subscription revenues of broadcasters would rise by 40 percent to Rs. 94 per subscriber per month compared to Rs. 60-70 now, it said, adding that with viewers likely to decide on popular channels, large broadcasters would have greater pricing power.

“Conversely, broadcasters with less-popular stations will find it tough to piggyback on packages, and also the least well-known ones will hardly have a business case and could go off air,” said the report.

While content cost would become a pass-through, protecting them in changes, they might miss out on the benefits of value-added services such as bundling content throughout broadcasters, customisation and positioning earnings, it said.

Currently, most vendors are charging NCF in the cap rate of Rs. 130 a month. Similarly, broadcasters have priced subscription to the hottest pay channels in the cap speed of Rs. 19 per month.

“In all this, OTT platforms may emerge as the big beneficiary because most audiences could change because of rising subscription invoices.

However, these are early days and the situation may grow with prices charged by broadcasters and vendors falling determined by market forces, viewership and competitive intensity, the report included.

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