With 2024 polls in sight, Govt may give in to news channels' demand over DD Freedish e-auction process

New Delhi: With the news channels set to meet I&B minister Anurag Thakur on Wednesday over the revised methodology for the e-auction of DD Freedish MPEG-2 slots, the government is likely to give in to their demand to resolve the issue.

The news broadcasters wrote a letter to the minister on Tuesday, which was jointly sighed by Pandey and Goswami, stating their decision to stay away from the auction.

If the matter is not resolved soon, 43 million subscribers of DD Freedish will stop receiving the signals from news channels from April 1, 2023.

In a rural family setup, there are 4-5 people in each household and this takes the number of individuals who watch DD Freedish to 20 crore.

The role of news channels is highly significant in reaching out to 20 crore people, who are largely the beneficiaries of the Centre’s welfare schemes, at a time when Prime Minister Narendra Modi is set to seek a third term in the 2024 general elections.

“In such a crucial year, the government would never want this issue to upset both news channels and 20 crore people. I’m surprised that Prasar Bharati did not address the grievances of news channels in the past month which led to the boycott of the e-auction,” said a top distribution executive of a news network.

“To me, it appears that the pubcaster was assuming that a few news channels will bid as per the revised policy due to a lack of unity among them and the rest will follow,” the executive added.

However, quite surprisingly, both the news industry bodies – News Broadcasters and Digital Association (NBDA) and News Broadcasters Federation (NBF) – jointly communicated to the I&B minister that they will stay away from the e-auction until the issue is resolved.

The letter to the minister was signed by NBDA president Avinash Pandey and NBF president Arnab Goswami.

“This will certainly force the government to do away with the flawed process aimed at earning artificially and immorally inflated revenues from the news channels,” said an industry analyst.

Prasar Bharati earned around Rs 200 crore from news channels in 2021 which slipped to less than half in the next year.

The broadcasters accused the pubcaster of tweaking the rules only to bring back the earlier revenue or even earn more at the expense of their sufferings.

Concerns regarding the new methodology for DD Freedish MPEG-2 e-auction

The major concern of the broadcasters is the clause in the revised methodology which gives all the broadcasters across any bucket the flexibility to bid in Bucket A+ at the base price of Rs 16 crore in the second round of e-auction.

The new methodology says that after the completion of the first round of e-auction for all the buckets, the second round will begin with Bucket A+ with a crore more as the base price.

Moreover, any channel from any genre or bouquet can bid for Bucket A+, according to the new methodology.

News broadcasters fear that no channel will wait for Bucket C to start again in the second round and hence they are expected to bid in the Bucket A+ at the base price of Rs 16 crore which is more than twice the actual base price of Rs 7 crore for the news channels.

Even the bid price in the first round will skyrocket as the channels will have in mind that they will be competing at the base price of Rs 16 crore from the second round.

A senior industry analyst said that the bid price could go up to Rs 25-30 crore in such a situation making an unviable business proposition for most of the news channels.

After shelling out up to Rs 21 crore in 2021, the news broadcasters traded carefully last year when they got a slot on DD Freedish between Rs 7.5 crore to Rs 11 crore.

In case the bid amount goes above Rs 20 crore again, no channel would be able to recover the additional burden when the revenues of most of the channels are down by 15-50%.