The regulator is making cable TV go digital which will benefit broadcasters but what about consumers’ interests, asks Dr Prakash Hebalkar
Dr Prakash Hebalkar
For the past two years, the Ministry of Information and Broadcasting has been promoting digitisation of telecasting; TV channel distributors in all metros would need to convert to digital signals by 2012 and for the rest of the country by end-2014. The move, although government-directed, seems to be motivated by the broadcasters rather than consumers. At 146 million, India has the third largest TV viewing households in the world, with pay TV penetration at 80%—much higher than in most other countries. The broadcasters complain that “Out of the Rs20,000 crore paid by viewers, only Rs4,000 crore reaches the channels… the TV channels’ revenue model has fallen apart as cable operators and distributors create an artificial bandwidth shortage so that they can carry channels as per their own whims, demanding usurious and anti-competitive carriage fees from broadcasters,” as reported in The Times of India which runs popular channels ET Now and Times Now.
However, if they are not making money, why do they launch new channels every year? The fact is, in 2010, the television broadcasting business was valued at a US$6.5 billion, a rise of 15.6% over the 2009 estimate of US$ 5.7 billion. The industry is projected to grow at a CAGR (compounded annual growth rate) of 16%, to US$13.9 billion, by 2015. The total number of TV channels (private and government-owned) grew from 461 in 2009 to 626 in January 2011. The number of news and current affairs channels was 312 and that of non-news and current affairs channels was 314 up to January 2011. Rating agency ICRA reported that, in May 2011, the Ministry of Information and Broadcasting cleared another 75 channels, bringing the total to the 700 mark!
The ministry argues for compulsory digitisation in the metros on the grounds that it will enhance the efficiency of distribution of broadcast signals so that as many as 1,000 channels can be offered. But do people want even more channels? Most households watch 10 and the average is 26 channels, according to a report by TAM Media Research. Of course, the diversity of languages in India justifies some of this proliferation, but the number of distinct genres is a problem for television viewers as it is for FM listeners. In fact, so large is the number of channels (the USA, in comparison, has an average household receiving a total of 102 channels) that the same ICRA report refers to the huge ‘television fragmentation’ faced by broadcasters as they compete to generate advertising revenue.
Shockingly, though digitisation will add per channel rents to consumer bills, it will not offer them advertising-free viewing in return for paying the channel fee as they had earlier, by paying a ‘TV licence fee’ to the government. The proposal by the Telecom Regulatory Authority of India (TRAI) does not offer a choice of commercial-free channels for the (even a higher) per channel fee. For example, a monthly fee of Rs10 (versus Rs5 per channel in the government proposal), with just 50% of the 150 million households subscribing, would generate Rs75 crore per month, quite adequate to show a large number of Hindi/Urdu movies with NO commercials every month.
In the US, there are over 100 commercial-free channels including PBS channels (the US equivalent of Doordarshan) on offer on cable networks. Time Warner offers an entire month of unedited, commercial-free, around-the-clock programming for a single, low, monthly price. Mediacom Digital Cable–1 Star Pack offers up to 135 channels of video and music including available local channels and up to 50 of your favourite cable channels in HD (high definition) at no additional charge. The service includes popular Family Cable networks like USA, A&E, ESPN, CNN, and up to 14 channels of commercial-free movies.
But so obsessed is the industry, and its regulator, with commercials that the latest TRAI recommendation released on 14 May 2012 reversed its earlier proposal to restrict advertisements to six minutes per hour (barely tolerable) and restored the 12 minutes per hour limit. Nor is there any mention of a higher quality option to be offered to viewers, such as HD channels or 3D channels, in the government proposal (these require higher bandwidth than a regular channel; e.g., estimates for streaming HDTV over digital channels ranged from 5mbps to 10mbps—about five times more than standard-definition TV in the US according to the International Cable-makers Federation). But then it would appear that the television viewer/subscriber seems to come last in all of these policy changes!
Dr Hebalkar obtained his doctorate in computer science from MIT, worked in IBM, TCS and Tata Infotech and runs ProfiTech, a strategy and public policy consulting firm.