The proposal by the Telecom Regulatory Authority of India to cap charges for channels shown on direct-to-home platforms at Rs 5 per month is in line with what has been allowed for those operating conditional access service networks.
Since both are addressing the same consumer, the proposal has inter se equity as a plus point. And the business of capping the CAS/DTH bill to the TV-watching home has a certain populist appeal. The problem is that the basic proposal on CAS was unfair to channel owners and removed the incentive for channels to produce superior/differentiated programming that might cost more money and/or which commands greater audience pull.
Extending this faulty logic to DTH now will compound the offence. Star TV, for instance, paid very large sums of money to, first, Amitabh Bachchan and later, Shah Rukh Khan, to host
Kaun Banega Crore(Rs 10 million)
pati. But
if it cannot charge more than a rival channel which does not have such expensive programming, how is it to meet its higher costs?
The same holds for sports broadcasters who bid hundreds of crore (Rs 10 million) for exclusive cricket broadcasting rights. One answer is that channels with superior programmes and, therefore, a larger audience will get their payback through higher advertising revenue. That is true, of course, but why should the channels be denied the right to ask more from the viewer as well?
There is also the position in which niche channels find themselves; they cannot charge the premium advertising tariffs that the mass market channels get away with, and therefore are more dependent on revenue from the viewer.
Channels like Discovery and National Geographic, movie channels that offer viewers no ad breaks in the middle of a film, and news channels in regional languages function in markets that are not ad-rich. Why should their viability be denied to them by executive fiat?
Quite apart from this, the Rs 5-per channel proposal assumes that viewers want to watch a chosen channel every month of the year --
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