The Telecom Regulatory Authority of India (TRAI) has decided to regulate the price of high-definition (HD) television channels by linking it to their standard-definition (SD) versions, prompting broadcasters to worry about a growth driver they had planned for.
In its new draft tariff order for addressable system, TRAI has stated that the cost of an HD channel cannot exceed three times the cost of a corresponding SD channel.
Most HD channels are mirror of their SD versions. For HD channels that do not have a corresponding SD channel with the same content, the price ceiling for such channels will be three times the ceiling of MRP of that genre.
For example, the price ceiling for sports channels is Rs 19, which means an exclusive HD sports channel needs to be priced below Rs 57.
Similarly, general entertainment channels (GECs) will be capped at Rs 36.
This formula will give adequate flexibility in pricing any HD channel in a given genre while also being consistent with the HD pricing formula for other HD channels.
The formula has been worked out based on the bandwidth consumed by HD channels vis-à-vis their SD counterparts. According to TRAI, one HD channel occupies a bandwidth that would otherwise accommodate 2–3 SD channels with appropriate compression processes in place.
So why did TRAI bring HD channels under its price cap? According to TRAI, the cost of HD content produced is a one-time cost and the SD feed is only a down-converted version of the same HD content at very little extra cost.
TRAI has also observed that same content is being broadcast on both HD and SD versions of a given channel and sometimes both channels are provided to subscribers in the same bouquet, causing additional charges for the subscribers.
It further noted that broadcasters have misused the price forbearance and kept the prices of HD channels abnormally high as compared to corresponding SD channels.
Therefore, the authority is of the view that HD channels should no longer be under price forbearance.
The price cap is aimed at improving consumers’ choice in their selection of HD channels without them being saddled with SD and HD channels with the same content while also allowing a price differential on an HD channel’s MRP vis-à-vis its SD counterpart.
Distinct SD and HD bouquets are aimed to protect consumers from additional charges because of bundling of SD and corresponding HD channel in the same bouquet, TRAI said.
Read more at: TRAI proposes to bring HD channels under price regulation; Sports HD channels capped at Rs 57 | TelevisionPost.com | TelevisionPost.com
