The Indian Broadcasting Sector is shrinking. Revenues and Subscriber base of DTH & Major MSOs are in the process of going down. The DTH active subscriber base went down from 70.99 Million to 68.52 Million from Dec 20 to Dec 21 (3.4%). In the same period, the major MSOs/HITS subscriber base went down from 46.73 to 45.81 Million (2%). Revenues too are dropping, from Rs 420 Billion to Rs 365 Billion (13%) for the broadcasters, and from Rs 358 Billion to Rs 343 Billion (4.2%) for the DPOs. In the same period, the advertisement revenues also dropped from Rs 262 Billion to Rs 217 Billion (17%). Affected DOPs and MSOs are attributing this to the migration of subscribers to Doordarshan’s Free Dish service (grown exponentially with a subscribers base currently close to 50 Million), and the growth of OTT services — whose revenues are projected to grow by 33% to Rs 338 Billion in FY22. (Source — TRAI’s CP dated 7th May 2022). This data clearly tells us that both linear TV and its content is migrating slowly towards OTT, and since the conventional DPO platforms (DTH & IPTV) are facing discriminatory licensing structure (8% license fees on revenues) compared to MSO & Cable operators (very nominal fees), the DTH player’s agony is more than the later. The purpose of this note is to analyze this situation, and conclude the optimal strategy for the regulator and the operators to keep the sector healthy can growing.
TRAI’s Recent Actions
TRAI has taken two specific actions. A) Released a consultation paper on issues related to the New Regulatory Framework for Broadcasting and Cable services; B) Asked the broadcasters to clarify whether their actions on providing linear channels to their in-house OTT and third-party apps violate clause 5.6 of the downlink guidelines?
