Regulators

Trai has to play a balancing role: advisor of broadcasting & TCSR DG Anil Bhardwaj

The industry needs a regulator because they cannot sort out their issues, he shares.

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Mumbai: In an interaction with independent consultant Anuj Gandhi at Ficci Frames Fasttrack 2022, Trai advisor (broadcasting) and TCSR DG Anil Bhardwaj said that the regulator has to play a balancing role. He compared it to making a decision about what to do with a screw. One either loosens or tightens it, he said.

In addition, he also mentions that a consultation process is going on regarding NTO 2.0. One side wants everything controlled, while the other does not want the regulator to control anything at all. The industry, he said, needs a regulator because they cannot sort out their issues. The aim is to have as light a touch of regulation as possible. That is Trai's ethos.

While saying that Trai has done some good things, he admitted that some bad things may have been done. But Trai is willing to review, consult, and come back. He also noted that while content is king, distribution remains extremely important. For the linear TV ecosystem to sustain, the stakeholders have to nurture and support each other. There are 1,00,000 LCOs in the country. Each has two to three people on the ground. That is the kind of distribution power available. "Ignore them at your own peril. Everybody is at a crossroads with everybody else. A linear TV channel needs a content creator, an aggregator, or a broadcaster. You need an integrator and then the last mile operators. If someone is dying and someone else is making money as a result, ultimately, who will suffer? Linear will be dead if one arm starts killing the other. Linear TV will grow if people are willing to nurture and sustain each other," he noted.

He said that regulation does not put a cap on pricing. One can charge Rs 100 for a channel. What he is against is the mirage of pricing that happens with bundling. That results in consumers being misled, which is what Trai is completely against. Certain channels, he said, are sold at Rs 6 through reverse deals and have fixed the MRP (maximum retail price) at Rs 19. Privately, he has asked them why this is being done. As a regulator, data is obtained and almost everything comes to Trai. The reason given is that the channel level will go down if it is not priced at that rate. "This is the mentality of the distribution head of one of the largest broadcasters in our country. In that situation, you need a regulator. We have not asked a niche English channel not to price themselves at Rs 50 or Rs 100. They have shut down because they could not sustain their model. They were showing ads and they also wanted to charge a certain fee. Previously, this was being driven through deals done with the distributor, which today is not possible because there is transparency in the system. For bundling, we said a mirage of price was created. So we will have some semblance. We tried Rs 19. We thought of Rs 12. The purpose is not to tell the industry what to fix. It is to avoid misleading the consumer. We are again reviewing that in the consultation. We have kept postponing the implementation of NTO 2.0 till we are through with this consultation process. We want to know if the price of Rs 12 is okay or not."

He further said, "We have done certain good things. Maybe we have done some bad things. That is why nothing is cast in stone. We are willing to come back and consult. We are willing to forego regulation provided the market matures. If we reduce or remove regulation, we will find that the market is not functioning as it should." He noted that in the current consultation, one side says control everything and the other side says do not control anything. One side desires a minimum level of assurance regarding distribution effort. So a balancing role has to be played by Trai. The market is not mature. There are issues, he noted, with broadcasting, with channels shutting down. He also noted that channels are sometimes shut down by distribution as a certain show or content might cause a problem for some people. "This is the kind of country that we live in."

He said that as a regulator, Trai has to act strongly, but it cannot be done tomorrow or people will complain of high-handedness. The market has to mature to a level where certain things are known and numbers and facts are known. He gave the example of hundreds of MSOs getting audits done themselves by one of the 52 auditors chosen by Trai. That is, until you reach a certain place. "Without distribution, no ecosystem can survive." On the content front, he said that Arpu is Rs 273. The ecosystem decides this, not the regulator. "If the industry is dying, please raise prices. Content is king, which is why digital media is paying five times more for content production compared to linear broadcast. So, if broadcasters need more revenue for content investment, then please review your models. Trai has never said not to invest in content. Broadcasters should make models in such a way that the money invested comes back. We will not stop you. Please make good content."

He added that numbers for the broadcasting industry are coming down, which could be due to a combination of factors, including OTT, DD Freedish, and Covid. Today, there are 900 or so TV channels. There are 1,000 odd MSOs. DTH is 70 million homes, and cable is not at 70 million. The balance is DD Freedish, which is growing. "Linear TV is finding its own new paradigm, new place. The punch is with OTT. It is important to understand why. Content is king, but distribution remains extremely important," he said.

He stated that some consumers believe that content is better on digital or OTT apps. That is why some have cut the cord. A broadcaster should allow a user to have five screens at the same cost or at a much lower cost than what is charged for linear TV. Then users will not go elsewhere. There are millions of smart connected TVs today.

He also noted that India is unique in many ways. He gave the example of the mandatory content sharing bill for events of national importance. That applies to some sports events, even if the acquisition price is high. The aim is to have the events seen by the masses, and it goes beyond the ambit of commercial deals done. This is something that the Supreme Court has agreed with. "We are a very different country. It is an evolution. I am not saying that we are 100 per cent correct or that the US is correct," he concluded.

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