Currently, there are no norms for carriage fees .
The contentious issue of payment of carriage fees by broadcasters to the cable industry for carrying their channels has brought forward divisions among the various stakeholders while the Telecom Regulatory Authority of India (Trai) remains undecided on the subject.
The broadcast regulator had recently invited all stakeholders in the cable and broadcasting business to give their views and comments on the issue of carriage fees.
Currently, there are no norms for carriage fees — the money that is paid by broadcasters to cable operators for placing their channels on the network at a band of their choice. Right bandwidth is important to draw the attention of customers and get good TRPs for the channel.
While some of the new broadcasters have suggested auctioning parts of cable spectrum as a possible solution towards fixing the ground rules for carriage fees that is charged by the large cable operators from broadcasters, Multi System Operators (MSOs) have called for terming carriage fees as ‘placement fees’.
They have also demanded these should be left unregulated the way advertising rates are on television. The direct-to-home (DTH) firms are not keen in fixing any sort of legal norms for carriage fees.
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“We are trying to understand the issue from the point of view of various stakeholders. At the moment, we are not looking at bringing out any paper on the subject,” a senior Trai official said.
The regulator says that it had asked broadcasters to submit their profit and loss and costing accounts, which many of them are unwilling to share, before they can come to any conclusion.
The carriage fees have become a contentious issue between the broadcasters and the cable distribution companies as there are over 380 television channels approved by the government, while the analogue cable distribution platform can only carry 70-80 channels. This has led to manifold increase in carriage fees paid by the broadcasters to the cable firms.
According to industry estimates, Rs 1,200-1,400 crore is paid by broadcasters annually to the cable industry for carrying their channels. On the DTH platform, currently the carriage fees paid by the broadcasters is estimated to be in the region of Rs 30-50 crore. Broadcasters say that as much as 30 per cent of their cost of running a channel goes into paying carriage fees. Says a CEO of a new broadcaster: “The problem is that the broadcasters are not united, many of them don’t want to divulge their accounts and share it with the regulator. As a result, the cable operators are doing their dadagiri.”
In its presentation, MSO Alliance, the apex body of large cable distribution companies, said that carriage fees are being paid willingly by the broadcasters as they wish to reach their target audience. “The main reason for payment of placement fees by broadcasters is to maximise their advertising revenue... It happens in retail business, too, where product manufacturers pay placement fees to the retailers to get a better visibility for their products,” MSO Alliance told Trai.
Some of the leading and recently-launched channels are said to have suggested auctioning of certain portions of the cable spectrum as a possible way forward in bringing about transparency in the carriage fees issue.
According to sources, a Hindi general entertainment channel currently pays Rs 60-100 crore annually towards carriage fees to various cable and DTH operators, while news channels pay anywhere between Rs 20 and Rs 40 crore annually.