The Hindu Business Line : Norms on pricing pay channels likely

IN order to ensure that broadcasters do not indulge in unfair pricing of channels, the Information and Broadcasting (I&B) Ministry is planning to come up with guidelines whereby broadcasting companies will not be permitted to price the pay channels in such a manner that service providers would be forced to buy entire bouquets.

Official sources in the I&B Ministry said that the Government wants to put an end to the existing practise whereby broadcasters charge a higher subscription fee for a popular channel and sell the others virtually free. "We also want to stop the practise of bundling together channels. In a post-CAS (conditional access system) scenario, subscribers will have to be given individual rates of channels," they said.

According to cable industry officials, presently SET-Discovery (the distribution joint venture between SET India and Discovery Communications), for instance, offers the operators an option of subscribing to a single channel for Rs 53, any two-three channels for Rs 54, four channels for Rs 54.50 and the entire seven-channel bouquet for Rs 55. Similarly, individual prices for Star Plus is about Rs 30, Star Movies is Rs 20, while the entire bouquet is available for about Rs 40 depending on the disclosures made by the service provider. "With this kind of pricing, an operator is forced to subscribe to entire bouquets even if, in a particular area, there is no demand for many of the channels," said a Delhi-based cable operator.

When asked whether issuing these new regulations would tantamount to Government deciding on the prices, the Government officials said the Ministry would not dictate prices to the broadcasters, but let market forces decide the rates. "We will only take steps to stop cross-selling of channels as a bouquet," they added. The Government is also planning to set a deadline by when broadcasters would have to make public their rates for various channels, officials said.

According to the Cable Television Networks (Regulation) Amendment Act 2002, every cable operator will have to publicise, in the prescribed manner, to the subscribers the subscription rates and the periodic intervals at which such subscriptions are payable for receiving each pay channel provided by such cable operator.

Thus even as advertisers adopt a wait-and-watch policy till the implementation of the CAS, broadcasters will not be able to make good their revenue deficit by either bundling together strong channels with weaker ones or charging huge premiums on popular channels while charging a notional fee for others.

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