The battle between broadcasters and cable TV operators seems to be a never-ending saga with price hike being the major bone of contention between the two ever since NTO 3.0 was implemented. To ensure cordiality between both the sectors during Lok Sabha elections, which are around the corner, TRAI recently suggested that channel prices should not be increased till June-end.

Will no price hike impact broadcasters negatively?

Industry experts told exchange4media that halting the price hike of TV channels may not hit broadcasters as much as losing out on the viewership could, considering big ad dollars have been spent by political parties, particularly by the incumbent government, and advertisers to achieve maximum visibility during India’s mammoth national polls, which kick into gear from April 19. According to data from Google Ads Transparency Centre, between January 1, 2024, and March 15, 2024, the BJP spent over Rs 31 crore for Google campaigns.

“Significant amounts of money are currently being spent on advertising by various political parties, and there is a collective desire to prevent any channel from being removed by a multi-system operator (MSO) due to pricing discrepancies,” said a senior executive of a leading broadcaster on the condition of anonymity.

He further said that the broadcasters themselves “seem to be in agreement” with this decision, as they also aim to capitalize on the revenue generated through election advertising.

“Given the tight market conditions, broadcasters are hesitant to risk losing out on potential revenue if they were to implement a price hike now,” he said.

Sharing a similar view, Sanjay Trehan, Digital & New Media Advisor, opined that in view of the imminent elections, TRAI’s request to the broadcasters is understandable.

“It’s a non-issue really as the price hike can be implemented post elections. Yes, in the short term, their subscription revenue may get impacted. But in the context of the larger perspective, it’s not a big deal really,” Trehan said.

Another media planner too shared that delaying price hike will not adversely impact broadcasters as subscription revenues are not solely reliant on these three months.

“I don’t think many broadcasters are facing difficulties with delaying the price hike until after the election results. Subscription revenue, in the grand scheme of things, isn't solely reliant on these three months; broadcasters have been building it over the years. However, there's still a long way to go for the entire industry regarding subscription revenues. Therefore, I believe that postponing the price hike for another three months won't adversely affect anyone,” said the planner.

However, giving another point of view, Karan Taurani, Senior VP, Elara Capital, said, not hiking the price could hit the broadcasters negatively as it will impact the subscription revenue, which occupies a large chunk of total revenues.

“Price hike has not happened in a long time and it is important for broadcasters as subscription is a big chunk of total revenue for them. Holding the prices for three months like this will hit the broadcasters negatively and will create an atmosphere of uncertainty,” said Taurani.

Meanwhile, the cable industry, which has silently welcomed the decision to not hike channel prices during elections, is concerned about the issue remaining unresolved as the prices are likely to go up post elections.

Speaking on behalf of the cable industry, a senior industry player said the suspension of the channel price increase is only for a short period of time and the larger issue still remains. It will be taken up once the elections are over.

The Telecom Regulatory Authority of India’s (TRAI) New Tariff Order or NTO 3.0, which came into effect last year, allows broadcasters to hike prices of channels that are a part of the bouquet to Rs 19 from Rs 12 earlier.

Opposing this, cable operators refused to accept the rise in price of pay channels and even took the legal route challenging it. In retaliation, many big broadcasters had cut off their transmissions to major cable operators, adding to the chaos.

The price hike may have been halted by TRAI to keep the situation in control during elections, but it will be interesting to see what happens post it.