New rules on the pricing of television channels are likely to make the viewing of HD and sports channels in India cheaper and make charges such as ‘HD Access Fee’ totally illegal.
The rules were issued on Friday and will come into effect within six months of it being published in the gazette.
The most important of the new rules is the imposition of a price cap of Rs 19 on all channels, HD or otherwise.
The only way for any broadcaster to price its channel above Rs 19 will be to take it out of all packages and sell it only as an individual channel — something that is practically impossible given the market situation.
As a result, the maximum price that any cable or DTH operator can charge for a single channel has, in effect, been capped at Rs 19 per month.
This is far below what cable and DTH operators are charging right now.
For example, according to Airtel Digital’s tariff card, almost all the HD channels are priced between Rs 50 and Rs 60 per month per channel.
Tata Sky’s pricing is more flexible, ranging from Rs 25 for regional channels to Rs 75 for sports channels. Videocon D2h, too charges between Rs 23 and Rs 60.
In other words, if you were to subscribe individually to 50 HD channels, it would cost you around Rs 2,500 per month. Under the new system notified by TRAI, it would cost only a maximum of Rs 950, but the actual number is likely to be much lower as explained below.
At present, individual channels are priced very high so as to discourage subscribers from purchasing channels one-by-one and instead go for one of the operators’ ‘packs’ — such as Gold, Diamond or Platinum.
When anyone subscribes to a ‘pack’, the DTH or cable operator is able to sell several extra channels as part of the pack in addition to the channel that the subscriber is looking for. In return for selling these ‘unwanted channels’, the DTH or cable operator gets money from the owners of those channels.
As such, they are keen to sell their channels in packs and never in the form of individual channels.
BREAKING PACKS
The new rules are designed primarily to address this issue of thrusing unwanted channels down consumers’ throats in the form of bundling.
That second provision is that the total price of any pack cannot be less than 85% of the total price of all the channels contained inside it.
Right now, the price of a pack of 40-50 HD channels ranges between Rs 225-300 per month — or about Rs 6 per channel. The reason it is kept at this level is that if it is increased much beyond this range, consumers may disconnect or look for other options.
So, if the overall price of the HD pack has to be maintained at the same range, the average individual selling price of these channels cannot be more than Rs 7.05 per month due to the new 85% rule. For example, if the individual price of these channels is Rs 10 per month, then the total HD pack price will rise to Rs 340-425.
If the price is hiked to that extent, many HD subscribers will simply exit the pack and purchase 20 of these channels individually, which will cost them only Rs 200 per month. This is because most subscribers do not ‘need’ all 40-50 HD channels they get, but consume only about half of them.
New TRAI rules to make HD channels cheaper by 70%, HD access fee illegal | Ultra News
The rules were issued on Friday and will come into effect within six months of it being published in the gazette.
The most important of the new rules is the imposition of a price cap of Rs 19 on all channels, HD or otherwise.
The only way for any broadcaster to price its channel above Rs 19 will be to take it out of all packages and sell it only as an individual channel — something that is practically impossible given the market situation.
As a result, the maximum price that any cable or DTH operator can charge for a single channel has, in effect, been capped at Rs 19 per month.
This is far below what cable and DTH operators are charging right now.
For example, according to Airtel Digital’s tariff card, almost all the HD channels are priced between Rs 50 and Rs 60 per month per channel.
Tata Sky’s pricing is more flexible, ranging from Rs 25 for regional channels to Rs 75 for sports channels. Videocon D2h, too charges between Rs 23 and Rs 60.
In other words, if you were to subscribe individually to 50 HD channels, it would cost you around Rs 2,500 per month. Under the new system notified by TRAI, it would cost only a maximum of Rs 950, but the actual number is likely to be much lower as explained below.
At present, individual channels are priced very high so as to discourage subscribers from purchasing channels one-by-one and instead go for one of the operators’ ‘packs’ — such as Gold, Diamond or Platinum.
When anyone subscribes to a ‘pack’, the DTH or cable operator is able to sell several extra channels as part of the pack in addition to the channel that the subscriber is looking for. In return for selling these ‘unwanted channels’, the DTH or cable operator gets money from the owners of those channels.
As such, they are keen to sell their channels in packs and never in the form of individual channels.
BREAKING PACKS
The new rules are designed primarily to address this issue of thrusing unwanted channels down consumers’ throats in the form of bundling.
That second provision is that the total price of any pack cannot be less than 85% of the total price of all the channels contained inside it.
Right now, the price of a pack of 40-50 HD channels ranges between Rs 225-300 per month — or about Rs 6 per channel. The reason it is kept at this level is that if it is increased much beyond this range, consumers may disconnect or look for other options.
So, if the overall price of the HD pack has to be maintained at the same range, the average individual selling price of these channels cannot be more than Rs 7.05 per month due to the new 85% rule. For example, if the individual price of these channels is Rs 10 per month, then the total HD pack price will rise to Rs 340-425.
If the price is hiked to that extent, many HD subscribers will simply exit the pack and purchase 20 of these channels individually, which will cost them only Rs 200 per month. This is because most subscribers do not ‘need’ all 40-50 HD channels they get, but consume only about half of them.
New TRAI rules to make HD channels cheaper by 70%, HD access fee illegal | Ultra News
