Star, Zee, Sony channels disappear from cable TV? Who is behind this?

New Delhi: The country's three biggest broadcasters - Disney Star India, Zee Entertainment and Sony - on Sunday disconnected the signals of their channels to around 10 major cable operators who are members of the All India Digital Cable Federation (AIDCF).

These cable operators account for about 50% of the pay cable TV connections in the country. These 10 cable operators provide entertainment through pay cable TV to 30 million homes out of a total of 65 million homes with pay cable TV connections.

It is noteworthy that SITI Cable, a member of AIDCF itself, has signed deals under NTO 3.0 and its consumers are getting uninterrupted access to all channels.

Why did broadcasters disconnect signals?

These cable operators have not signed interconnection deals with broadcasters as per the provisions of the amended New Tariff Order (NTO 3.0) notified by the Telecom Regulatory Authority of India (TRAI).

According to the TRAI, any broadcaster can provide the signal of its channels to the cable operator only after signing the interconnection deal.

Under NTO 3.0, all interconnection deals should have been signed by February 1. In this case, these broadcasters were violating the rules by giving signals after February 1 to the cable operators who did not sign the deal.

What are the complaints of cable operators?

Prior to the implementation of NTO 3.0, many broadcasters increased the MRP and bouquet prices of their select channels under the provisions of TRAI. This increase was done for the first time in four years.

However, broadcasters have increased the prices keeping in mind the instructions of TRAI so that it does not affect the consumer's pocket and the viewership of their channels does not decrease.

If broadcasters are to be believed then this increase in prices will put a maximum of 10% additional burden on the pocket of a consumer and according to them such an increase in four years is justified.

In contrast, cable operators have refused to sign deals with broadcasters, terming these price hikes as exorbitant.

Price hike case in court

AIDCF has filed several petitions against NTO 3.0 in various High Courts across the country. However, no court has ordered any interim stay or stay on any coercive action. Hence, NTO 3.0 is legally applicable throughout the country.

Despite this, cable operators allege that broadcasters who disconnected signals before the court's final verdict are enemies of the public.

AIDCF general secretary Manoj Chhangani said, “Disney-Star, Sony and Zee disconnected the connections despite the matter being sub-judice by giving just 48 hours' notice to the cable operators. As a result, around 4,50,00,000 cable TV households across the country are unable to watch their channels.

The matter will be heard next in the Kerala High Court on February 22 and cable operators are hoping that the court's verdict will be in their favour as they have projected the fight as a people's fight.

According to AIDCF, broadcasters can increase prices further and the increase in prices for subscribers can be up to 60%.

“In the year 2019, broadcasters increased the prices of some of their channels by up to 400%. At the national level, such a price hike means an additional Rs 5,000 crore was charged from consumers. With the recent hike, the earnings of broadcasters will increase by Rs 8000 crore in a year,” AIDCF said.

AIDCF has accused TRAI of being apathetic in this matter.

“Sector regulator TRAI, despite being aware of this disconnection, has not taken any steps,” AIDCF said.

Cable operators fear the loss of earnings

Even though this matter is being presented as an additional burden on the public, in reality, the cable operators are fearing a dent in their earnings.

Actually, there are two types of cable bouquets. One which broadcasters offer with up to 45% discount by combining many of their channels and the other which cable operators (DPOs) offer to their consumers.

In addition, a subscriber can also buy channels individually (a la carte). 

However, a-la-carte channels are mostly purchased on DTH because through their automated system (website or app) the consumer can easily select or delete any channel. These DTH operators do not force their users to buy any package.

On the other hand, cable operators interact directly with their customers and mostly sell their own packages to customers.

Cable operators make their packages by combining the bouquets of different broadcasters. In such a situation, it is obvious that the price of packages offered by cable operators will also increase when the bouquets of broadcasters will be expensive.

As mentioned above, the total increase in full package prices will be only 10-15%, despite the fact that some bouquets of broadcasters have been made costlier by up to 30%.

A look at the several photos being sent on WhatsApp by cable operators proves this.

With the price hike, some broadcasters fear that cable operators might remove their bouquets from their packages.

In such a situation, the broadcasters put a condition that the cable operators would be entitled to get the incentive only if the coverage of their bouquet is up to 85-90% in the DPO package.

“Broadcasters are stipulating 85-90% coverage of their bouquet in the DPO's package to be eligible for the incentive. Earlier it used to be 75%. After the price hike, we fear that consumers will opt for a-la-carte channels instead of our packages. How can both things happen at the same time? a DPO representative said.

Responding to concerns over bouquet coverage, a TRAI source said it is a matter that broadcasters and cable operators can sit face-to-face and resolve.

"The broadcasters are ready to resolve the issue through mutual negotiations. The overall hike in prices is 5-10% and the coverage condition is also negotiable. If the impasse continues even after that, it is something else and There is no case of a price hike," said the source.

What could be this "something else"

While this is not the first time that broadcasters and cable operators are at loggerheads, the tussle assumes significance in view of the upcoming IPL season.

The media rights of IPL for the next 5 years are divided into two parts – TV rights with Star India and digital rights with Reliance-owned Viacom18.

In such a situation, industry experts suspect that both companies are trying to spoil each other's game and NTO 3.0 is being used as a pawn to create an atmosphere against Star India.

An expert said that if this was not the case then why would SITI Cable sign interconnection deals under NTO 3.0? “This suspicion deepens further considering that Reliance-owned Viacom18 has not disconnected its signals.”

Notably, AIDCF's major members include DEN and Hathway, which are cable operators owned by Reliance.

A section of the industry is seeing it as a fight between Reliance and Star India rather than cable operators versus broadcasters.