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Subscribers of Direct-to-Home satellite services on all existing plans, including long-duration packs, will be migrated to schemes compliant with TRAI’s tariff order on TV channels from 29 Dec, according to Dish TV, India’s biggest DTH operator.
The company said the TRAI rules are applicable to all customers and there is no exemption for any category, such as long-duration pack users.
Long duration packs refer to packs with validity of up to three years.
DTH companies offer long-duration packs that take subscription charges in advance.
In return, subscribers are promised cheaper rates or access to a larger number of channels. Most such packs are valid for one year.
Some DTH operators have been signing on long-duration subscribers as late as two weeks ago.
It was possible for DTH and cable companies to offer long duration packs because most of these platforms had ‘fixed price’ contracts with channel providers.
Under such contracts, the DTH or cable provider paid a fixed amount to broadcasters, irrespective of how many of their subscribers were allowed to watch the channels. As a result, the distribution platforms were incentivized to supply the channels to as many subscribers as possible.
However, such fixed price models have been disallowed by the TRAI from Dec 29.
CASH REFUND OR TWEAKED PACKS?
Even before the new development, players like Airtel Digital were already offering users the option of breaking their long-duration contracts halfway.
Such subscribers would be refunded an amount pro-rated to the time remaining in their contract.
For example, a subscriber who had signed up for a Rs 5,000 yearly pack would be credited a balance equal to around Rs 2,500 if he or she canceled the pack after six months.
The second option would be for DTH operators to continue to provide such mega packs.
This, however, would be possible only if the total amount that they have to pay to the broadcaster for all the channels is less than what they are getting from the consumer. Otherwise, they would suffer losses.
In turn, this would depend on a variety of factors, such as the penetration that the platform is able to achieve for a particular channel or bouquet, the price charged by the broadcaster for the channel or bouquet and so on.
For now, distribution platforms are learnt to be crunching the numbers to see which of their earlier plans can be carried on to the new regime.
In case of Dish TV, which operates services such as D2h and Zing, the company said it is working to ensure ‘least disruption’ to users of such packs.
“The new regulations are applicable to all customer with effect from December 29, 2018,” it said in response to a question on whether the new TRAI tariffs are applicable to consumers on long duration packs or not.
“We are working to ensure there is least disruption to your viewing experience,” it added.
NEW RULES
The new rules were designed to help cable and DTH companies offer more choice to customers.
However, due to a Madras High Court order, a crucial part of the new tariff order has been struck down.
The part that was struck down had to do with ensuring that channel owners gave DTH and cable companies access to their channels one-by-one, instead of forcing them to take all their channels.
It was expected that once cable and DTH companies started getting channels one-by-one, consumers too would also be able to pick and choose the channels they want, instead of having to buy huge bouquets or packs that contain unnecessary channels.
This would also have allowed a greater variety of channels on cable and DTH platforms by freeing up bandwidth used by ‘junk’ channels pushed by big broadcasters using bundling.
The TRAI had tried to break up the practice of bundling by stipulating that the price of channels should be largely similar, whether sold individually or in a pack.
However, Justice M Sundar of Madras High Court struck down the requirement, allowing channel companies to continue to charge very high rates if a cable or DTH operator tried to buy only select channels from them, instead of buying all the channels.
Due to the striking down of the crucial clause, the new Tariff Order has lost much of its teeth.
As such, most of the channel owners have priced their individual channels at very high rates compared to their pack rates, continuing the existing practice.
For example, Star India offers 25 channels for Rs 120 under its ‘Hindi HD Premium’ pack. However, if the same channels were to be purchased individually, it would cost around Rs 225 per month.
TRAI has approached the Supreme Court, arguing that pricing individual channels at a high rate is anti-competitive and is designed to force viewers and DTH companies to purchase unnecessary channels, and to ‘crowd out’ emerging competitors by saturating the carrying capacity of cable and DTH networks.
NEW PACKS
From December 29, customers can choose packages provided by broadcasters (like Star and Zee), in addition to the packages provided by their cable and DTH operator.
DTH customers on long duration packs to get TRAI plans from Dec 29
They have messed it pretty bad for customers.
The company said the TRAI rules are applicable to all customers and there is no exemption for any category, such as long-duration pack users.
Long duration packs refer to packs with validity of up to three years.
DTH companies offer long-duration packs that take subscription charges in advance.
In return, subscribers are promised cheaper rates or access to a larger number of channels. Most such packs are valid for one year.
Some DTH operators have been signing on long-duration subscribers as late as two weeks ago.
It was possible for DTH and cable companies to offer long duration packs because most of these platforms had ‘fixed price’ contracts with channel providers.
Under such contracts, the DTH or cable provider paid a fixed amount to broadcasters, irrespective of how many of their subscribers were allowed to watch the channels. As a result, the distribution platforms were incentivized to supply the channels to as many subscribers as possible.
However, such fixed price models have been disallowed by the TRAI from Dec 29.
CASH REFUND OR TWEAKED PACKS?
Even before the new development, players like Airtel Digital were already offering users the option of breaking their long-duration contracts halfway.
Such subscribers would be refunded an amount pro-rated to the time remaining in their contract.
For example, a subscriber who had signed up for a Rs 5,000 yearly pack would be credited a balance equal to around Rs 2,500 if he or she canceled the pack after six months.
The second option would be for DTH operators to continue to provide such mega packs.
This, however, would be possible only if the total amount that they have to pay to the broadcaster for all the channels is less than what they are getting from the consumer. Otherwise, they would suffer losses.
In turn, this would depend on a variety of factors, such as the penetration that the platform is able to achieve for a particular channel or bouquet, the price charged by the broadcaster for the channel or bouquet and so on.
For now, distribution platforms are learnt to be crunching the numbers to see which of their earlier plans can be carried on to the new regime.
In case of Dish TV, which operates services such as D2h and Zing, the company said it is working to ensure ‘least disruption’ to users of such packs.
“The new regulations are applicable to all customer with effect from December 29, 2018,” it said in response to a question on whether the new TRAI tariffs are applicable to consumers on long duration packs or not.
“We are working to ensure there is least disruption to your viewing experience,” it added.
NEW RULES
The new rules were designed to help cable and DTH companies offer more choice to customers.
However, due to a Madras High Court order, a crucial part of the new tariff order has been struck down.
The part that was struck down had to do with ensuring that channel owners gave DTH and cable companies access to their channels one-by-one, instead of forcing them to take all their channels.
It was expected that once cable and DTH companies started getting channels one-by-one, consumers too would also be able to pick and choose the channels they want, instead of having to buy huge bouquets or packs that contain unnecessary channels.
This would also have allowed a greater variety of channels on cable and DTH platforms by freeing up bandwidth used by ‘junk’ channels pushed by big broadcasters using bundling.
The TRAI had tried to break up the practice of bundling by stipulating that the price of channels should be largely similar, whether sold individually or in a pack.
However, Justice M Sundar of Madras High Court struck down the requirement, allowing channel companies to continue to charge very high rates if a cable or DTH operator tried to buy only select channels from them, instead of buying all the channels.
Due to the striking down of the crucial clause, the new Tariff Order has lost much of its teeth.
As such, most of the channel owners have priced their individual channels at very high rates compared to their pack rates, continuing the existing practice.
For example, Star India offers 25 channels for Rs 120 under its ‘Hindi HD Premium’ pack. However, if the same channels were to be purchased individually, it would cost around Rs 225 per month.
TRAI has approached the Supreme Court, arguing that pricing individual channels at a high rate is anti-competitive and is designed to force viewers and DTH companies to purchase unnecessary channels, and to ‘crowd out’ emerging competitors by saturating the carrying capacity of cable and DTH networks.
NEW PACKS
From December 29, customers can choose packages provided by broadcasters (like Star and Zee), in addition to the packages provided by their cable and DTH operator.
DTH customers on long duration packs to get TRAI plans from Dec 29
They have messed it pretty bad for customers.
