Beneath all the beautiful tales that Kabir Khan’s ’83’ tells – of unwavering hope and love for the nation, of team spirit and learning from failure – lies a sublime story about the power of an effective regulator. The poignant biopic, about a resilient Kapil Dev leading a disadvantaged Indian cricket team to lift the 1983 World Cup by defeating the invincible West Indies team, is a wonderful illustration of leadership with patience.
Dev, as a young captain, teaches us that it is possible to rule without micromanagement or excessive authority. On the one hand, he is aware of his strengths but more importantly of his weaknesses, including his imperfect English. He is aware of his team’s cultural differences, varying temperaments and styles of play. He is also aware of his own position among more experienced players. He ignites his team’s competitive spirit but teaches them to play fair. He takes calculated bets but isn’t shy about making tough decisions to create a level playing field. In short, Dev knew what control to exercise and what autonomy to grant in order to flourish not only as a team but also individually. In doing so, Dev built a team that trusted him and thrived under his leadership.
The lessons offered by ’83’ are particularly relevant to the Rs.68,500 crore broadcast industry, given the current relationship between regulator TRAI and broadcasters. “There seems to be a level of distrust,” says Abhishek Malhotra, managing partner, TMT Law Practice. He adds that this trust deficit needs to be addressed.
Where to start, however, can be daunting when a lot of water has flowed under the bridge.
The unanimous opinion is that the TRAI must, above all, take a step back and reassess its role as guardian of the broadcasting industry. “The TRAI must see this not as a disputing party, but as an independent and objective regulator. It is time for TRAI to stop micro-managing the sector in the name of consumer interest,” says Malhotra. “TRAI’s mandate is to sufficiently balance the interests of all stakeholders, not just consumers. And it must do so by allowing the sector to play on market forces so that competition is sustained, talent is nurtured and creativity thrives alongside necessary checks and balances.
“Even as an accidental regulator brought in to temporarily oversee the broadcast and cable services industry, TRAI started out with a heavy hand. Since 2004, TRAI has prescribed rules to control the very first line of relationship, i.e. between broadcasters and service operators through strict price caps and structures,” says Paritosh Joshi, director, Provocateur Advisory and former CEO of STAR CJ Network India. .
A senior lawyer, who did not wish to be named, said: “The reason TRAI has failed to price television content since 2004 is that it has been treated as a commodity. The price of sugar or cement can be uniform from one manufacturer to another because a similar infrastructure is used to manufacture it. Television, however, is not a commodity; it is related to speech and creative expression that cannot be quantified. This one-size-fits-all approach is the greatest bane of the industry. »
Now, if the new dispensation at the helm of TRAI is to begin the process of restoring trust with broadcasters, says Joshi, it must start with the promise made by TRAI’s first chairman, Pradip Baijal – of a light regulatory approach which allows the competitive hypermarket to self-determine its prices according to supply and demand. Baijal’s far-sighted wisdom also took into account that India is already a very affordable market, where TV consumers pay a quarter of what they pay in the UK, US or Thailand.
This is why the New Tariff Order (NTO), even with the best intentions of making TV prices “affordable”, has done a huge disservice to all stakeholders, including the one entity for which the TRAI s is beaten – the end consumer. For a settlement that was intended to give the consumer the choice to watch what they want and only pay for it, they did the exact opposite. With time-pressed TV users unable to make sense of this maze of channels and pay-per-view packages, cable bills soaring 50-70%, and poor service by last-mile operators, TV users see the value of pay TV more. This triggered a major cord-cut and a rampant migration to OTTs at the high end and DD Free Dish at the low end.
The latest round of price increases by broadcasters, which took effect on December 1, is expected to accelerate this trend. In October, major broadcasters including Star & Disney India, Sony Pictures Networks India, Zee Entertainment and Viacom 18 raised the prices of their flagship channels by Rs 15-30, removing them from the packages. Under proposed amendments to the NTO in 2020 – NTO 2.0 – TRAI has capped channel prices at Rs 12/- if it wants to be part of a bouquet, an “arbitrary” and “unsustainable” price for broadcasters . In the case of bouquets, a maximum discount of 33% of the total sum of the prices of the à la carte channels of the bouquet is authorized.
As NTO 2.0 is challenged by broadcasters in the Supreme Court, what could help resolve the current impasse is the initiation of a “disclosure dialogue” on both sides, Malhotra says.
“The TRAI needs a clear roadmap with a precise time horizon. The TRAI could choose to state at the outset that it wishes to regulate tariffs for, say, the next 5 years. To do this, the broadcasters and the regulator will have to go through half of the NTO 2.0. TRAI can either honestly admit that it does not have the means to undertake research and ask broadcasters to disclose their data on viable tariffs, or present its own data and submit it for broadcasters to consider. This will have to be a two-way process of trust.
Media and corporate law advocate Ashok Mansukhani agrees on the need for “constructive dialogue” to break the ice on the ONT. “To build trust, TRAI should hold a series of discussions with broadcasters/MSOs/DTH operators/cable operators and customer organizations to try to reach a compromise solution keeping the customer’s point of view paramount in terms of of TRAI preamble under the TRAI Act 1997.”
Mansukhani also stresses that broadcasters need to create an industry-wide body to speak and interact with the regulator and government with one voice, a view endorsed by several others, including Joshi of Provocateur Advisory.
Given that price regulation is the biggest bone of contention, Joshi thinks it’s time for a time-bound democratic exercise on data collection to be undertaken by all stakeholders.
“Instead of open houses, TRAI should bring together top thinkers representing various stakeholder groups including IBDF, AIDCF, COFI, NBA and form a Joint Technical Committee (JTC). The JTC must engage a quality research service provider (RSP), fund the research, and evaluate it. This data must be made public and subject to the strictest levels of control under the ITR. This exercise is expected to cost between Rs.15-20 crore,” says Joshi. “A fair Roundtable will ensure that no one’s motivation is suspect and that policy decisions are based on this qualitative data alone and not stem from dogma, prejudice or hostility.”
This data collection exercise should help TRAI reduce barriers for the heavily regulated cable TV industry, giving it much-needed relief to compete freely with OTT and DD FreeDish platforms. As the competitive intensity between incumbent platforms increases, this will give consumers real choice in terms of content and price.
“India has 125 million pay-TV users, which could grow to 175 million users, but there is great regulatory uncertainty. Convergence is going to happen very quickly and connected TVs will soon be a trend. While niche channel content has moved online behind the paywall, in the future at least 10% of ad revenue will come from connected TVs In such a situation, cable TV cannot be subject to different rules than those governing DD Free Dish and OTT. Cable TV deregulation is the way forward,” said Mihir Shah, Vice President, Media Partners Asia.
Shah also points out that the media rights of upcoming marquee properties such as the Indian Premier League (IPL), the International Cricket Council (ICC) and possibly the Board of Cricket Control of India (BCCI) – key drivers of revenues for the economy – are being watched closely not only by streaming companies, but also by deep-pocketed tech giants like Amazon.
“For broadcasters to bid for sports rights, they need a clear view of subscription and advertising revenue,” he said.
The legal expert quoted above is of the opinion that the principle of “access to a signal seeker on a non-discriminatory basis” must be applied throughout the industry to create a level playing field. “TRAI must recognize that broadcasters have the right to set prices and offer their content based on their cost and revenue models. Thereafter, broadcasters must offer their content on a non-discriminatory basis to similarly placed distribution platforms; the conditions must be non-preferential. This will automatically ensure a level playing field and encourage competition and investment in the industry.
While deregulation of the sector remains the central theme, careful attention to the last mile is equally important to restore trust between broadcasters and TRAI. “The dismal quality of standards applied by MSOs and cable operators, under-reporting of subscribers and revenues, and rampant piracy have greatly harmed the industry. TRAI needs to diligently review and apply its mechanism to monitor the last mile,” says Vivan Sharan, Partner, Koan Advisory.
Fortunately, industry watchers say TRAI’s new chairman PD Vaghela and secretary Varthakavi Raghunandan are open in their approach, giving reason to believe that the confidence-building process has an intention of the two sides.
Now is the time to start a new round!
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