NTO-2 rollout: GTPL to work with channels to prevent disruption
2021-10-19 2021-10-19 | Sreejiraj Eluvangal
GTPL, one of the top cable feed providers in India, said it hoped to work with channel broadcasters over the next 60-90 days to prevent a repeat of the chaos that was seen with the introduction of a new tariff order two years ago.
The company's comments come in the wake of major broadcasters such as Star India, Sony and Zee taking their flagship channels out of their packages and pricing them independently, ahead of the implementation of the amended tariff order in December.
However, the cable and DTH industry wants to avoid a repeat of the chaos seen during the roll-out of NTO 1 in early 2019, when widespread misunderstanding and confusion led to the blacking out of major channels for most consumers in the country for several months.
It took nearly six months for the viewership of major channels to become even somewhat comparable to what they were prior to the NTO 1 rollout. This was achieved after a lot of pressure was brought to bear on broadcasters by cable and DTH companies to bring down their pricing, which finally led a slashing of package prices by broadcasters.
This time too, the omens are pointing to a repeat of the game of brinkmanship seen in 2019.
Over the last several days, broadcasters have removed their popular channels from packs and announced significant increases in their prices.
Like in 2019, this has left cable and DTH companies with a lot of hard choices to make.
If they want to maintain all the channels that they currently provide to their customers as part of various packages, they will have to significantly increase the price of these packages.
For example, most cable and DTH operators offer most of the popular channels — such as Star Plus, Zee TV and Sony — as part of their basic offering for around Rs 250 per month.
However, given the new prices announced by broadcasters ahead of NTO 2, these cable and DTH companies will have to increase the price of these packages by around Rs 75-85 per month — to Rs 325-335 per month.
The price increase will have to be higher — in the range of around Rs 140-160, in case of higher packages that contain sports channels. These packages, which are currently priced around Rs 350-400, will have to be priced in the Rs 500-550 range to account for the jump in the price of both popular entertainment channels and sports channels.
If cable/DTH operators want to avoid increasing the prices of their packages, they have only two options: The first is to remove these popular entertainment and sports channels from these packs and maintain the pricing at the current level, and the second option is to remove the packs, but maintain the popular channels. This option would remove many, many less popular channels from these packs.
Either way, consumers are not going to get all the channels they have come to expect at the price points they are currently used to.
The GTPL Hathway management, on its part, said it is hopeful of reaching an amicable solution before the roll-out of NTO 2 starts in December.
"There are a lot of moving parts, over the next 60-90 days, for its implementation," it said. "As an MSO, a service provider, our task is to ensure as smooth a rollout as possible, both with the consumer and trade, and we are going to take the help of all broadcasters and all stakeholders, all the governing bodies…
"The endeavour is to make sure that it is a smooth roll out and there is no shock to any stakeholder in the system."
STICKER SHOCK
Broadcasters such as Star India and Zee have opted to take their popular or 'driver' channels out of their main channel packs and price them independently at around Rs 23-25, as the new tariff order does not allow any channel priced above Rs 12 to be part of a bouquet.
Under the existing system, these broadcasters would provide at least two of these popular channels as part of a bouquet of around 6-8 channels at a total price of around Rs 40-50 per month.
Under the new tariff plans that they have announced, these channels would have to be purchased separately at Rs 25 each by the cable/DTH provider, which means that just two such channels would cost as much as the entire pack earlier.
Hence, the cable/DTH provider can carry either these two popular channels, or the rest of the pack, unless they want to increase their pack prices.
Going by industry feedback, cable and DTH operators may opt to get rid of most of the less popular channels from the big broadcasters if they continue to stick to their newly announced pricing strategy. These less-popular channels would be replaced by free or ultra cheap equivalents from other broadcasters.
Overall, the move is likely to free up a lot of space on cable and DTH networks.
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