Trai tariff impact: Don't use BARC data for six weeks, ISA tells members

According to Trai's intimation, 40% of pay-TV subscribers had exercised their choice to switch to the new regime

While the debate on viewership data darkness during the transition to the new tariff order by the Telecom Regulatory Authority of India (Trai) continues, the Indian Society of Advertisers (ISA) has communicated to its members not to use viewership data for media planning and buying purposes during this time.

The advisory said that the ISA executive council and core media committee have been in touch with the Broadcast Audience Research Council of India (BARC), the agency which brings out weekly television (TV) ratings, the currency on which ad-sales is traded in the country.

“Considering the fact that the Trai NTO (new tariff order) is across India, its impact will be significantly different in each region given the varied distribution and broadcast landscape of each region. NTO, if implemented in true spirit, is likely to have shift in channel availability and hence, possibly consumption landscape also,” it read.

As a result, the members of the advertiser body have been advised that viewership data during the transition period, which it estimates at six weeks, should not be used for media planning, evaluation, or buying. It added that the ISA will work closely with BARC to ascertain when the data will become usable again. As of now, data will be released every week, however.

Meanwhile, teething problems continue a week into the implementation of the NTO for TV channels as mandated by the Trai. While most distribution platform operators (DPOs), including cable and direct-to-home (DTH) players, have made the switch to the new regime, uptake continues to be slow at the consumer’s end.

According to Trai’s intimation in the last week of January, 40 per cent of pay TV subscribers had exercised their choice to switch to the new regime. Industry experts and company executives now estimate that figure could be 50-55 per cent if actual conversion rates after the February 1 deadline to switch (for cable/DTH operators and broadcasters) are taken into account. The deadline for the consumer to exercise his or her choice is February 13, after which, those who have not made the shift, will cease to receive signals on their set-top boxes.

Consequently, it is difficult to gauge whether average monthly cable bills have gone up, or reduced. Experts say that till things don’t settle down, it is difficult to predict the impact on cable bills at the consumers’ end, and average revenue per user at the distributors’ and broadcasters’ end.

While a CRISIL report predicts that the average monthly cable bill is expected to go up, the key point is that consumers will now pay for what they have wanted and have chosen. So, in the erstwhile regime, if consumers used to pay an average bill of Rs 250 a month for 800-plus channels, now they may pay the same amount, but for far fewer channels, which they choose. Experts also believe that subscription patterns for certain genres, news, and sports, for example, will become increasingly event-driven. So an election quarter may see a surge in news channel subscriptions, while a cricket-heavy quarter will see sports channels in demand.

Currently, most DPOs have modified the interface on their platforms in line with the new regime. If a subscriber lands on a channel he/she has not chosen, a message appears on the screen stating the channel has not been subscribed by the viewer, and in order to see the content, they need to subscribe to it. Most platforms have also put brief instructions on how to subscribe to the channel as part of the message.

Experts believe that DPOs are doing their bit, albeit a little late in the game. “The work on educating and converting consumers has probably started a couple months late. Having said that, once everyone knew that the shift to the new regime is a reality, they did their best. It’s going to take a while for the environment to stabilise though,” says an executive from the TV industry.

Most platforms have also discontinued their old channel pricing packs ahead of the February 13 deadline for consumers. The exception here is Tata Sky, which has given its consumers time until February 13 to make their choice. After the date, if it is not further extended, the DTH operator will discontinue the old packs too, say sources. Tata Sky is also involved in litigation against Trai in the Delhi High Court, the next hearing for which is on February 8.

“In the period we’re settling into the new regime, I feel we will see a ramping up in terms of the marketing effort by broadcasters,” says Jehil Thakkar, partner, Deloitte India. He agrees the new system will take around a quarter to settle in, and in the meantime, the industry will be in a state of flux, whether it is viewership for broadcasters or subscriptions for cable and DTH operators.

Experts predict the gestation period for the new tariff regime to settle down could be up to three months. This means it won’t be until the first quarter of the financial year 2019-20 that consumers would know whether monthly cable bills have gone up or down and if the base of cable and DTH subscriptions has altered altogether.

For the quarter ended December 31, 2018, DTH operator Dish TV did show some slowdown in subscriptions, owing to the shift to the new regime. It, however, clarified that subscriptions would stabilise within the three months ended March 2018.

What’s delaying the switch?

• The delay in communicating the impending change in tariff regime, both by broadcasters and DPOs, has led to a delay in execution of Trai order. Some delay has also been on account of litigation around the tariff order

• There has been some amount of consumer inertia as well

• Once the order was implemented, websites and mobile apps of DPOs had a surge in traffic as consumers tried to access them to exercise their right. As a result, the sites have become slow, making it difficult for consumers to fill out the information required to make the shift