Due to a disagreement between broadcasters and cable operators, many popular television channels are currently unavailable to viewers, resulting in a blackout for these channels. Some of the top broadcasters, including Zee Entertainment, Sony Pictures Networks India, and Disney Star, have ceased providing their signals to cable operators.
The root of this issue lies in a dispute over pricing. While broadcasters have increased their channel prices by 10-15%, cable operators have refused to accept the rate increase. This price hike is due to the New Tariff Order (NTO) 3.0, which allows broadcasters to raise the prices of channels that are part of a bouquet to Rs 19 from Rs 12. The new pricing became effective from February 1st of this year.
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Cable operators, also known as multiple system operators (MSOs), have not agreed to the price increase as they believe it is too steep for their price-sensitive customers. This disagreement has left viewers caught in the middle of the situation, with no clear resolution.
What is the recent issue between channels and cable operators?
Recently, top broadcasters, including Zee Entertainment, Sony Pictures Networks India and Disney Star, have switched off their signals to cable operators. More than 40 million households will not be able to view the channels of these broadcasters. Due to a disagreement between broadcasters and cable operators, popular television channels have gone dark for many viewers.
The broadcasters have increased prices in the range of 10-15 per cent, as allowed by the New Tariff Order (NTO) 3.0, for channels that are part of a bouquet.
MSOs provide signals to consumers’ houses through local cable operators, and they have to share a part of network capacity fees (NCF) with LCOs. On the other hand, IBDF, the apex body of TV broadcasters, reported that 90 per cent of operators, including DTH (direct-to-home) and MSOs, have signed up for NTO 3.0, but the remaining operators are holding back.
Karan Taurani, a senior vice president at Elara Captial, stated that if the temporary blackout continues for more than a few days, it will have a considerably detrimental effect on the advertising revenue of broadcasters. In addition to this, there may also be a reduction in subscription revenue. TV advertising revenue has already been under pressure due to new age and commerce companies cutting ad spending.
Taurani noted that the negative impact would be far higher for the MSOs who go through this blackout for their customer base, as these broadcasters have a substantial viewership share on TV. The 3 broadcasters contribute 40-45% of India’s TV viewership share.
All India Digital Cable Federation (AIDCF), a lobby group of the MSO, has approached the Kerala High Court against NTO 3.0 and has also asked for interim relief from disconnection notices issued by broadcasters. The issue is decided for a hearing on February 20th.
