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In a simmering standoff that has put the spotlight back on the ever-tense relationship between broadcasters and distribution platform operators (DPOs), India’s direct-to-home (DTH) industry finds itself at a critical juncture. Over the past week, two major players—Tata Play and Airtel Digital TV—have removed Sony and Zee channels from their base packs, citing disagreements over tariff revisions linked to the new Reference Interconnect Offers (RIOs) under TRAI’s New Tariff Order (NTO) 3.0.
The developments have triggered widespread debate in the media and broadcasting ecosystem: Will this enable DTH operators to position themselves for better margins and operational sustainability? Or are they risking subscriber churn and a fragmented viewing experience in an already competitive and disrupted content ecosystem?
The Heart of the Dispute: NTO 3.0 and RIOs
The new Reference Interconnect Offers (RIOs) issued by broadcasters earlier this year, in accordance with TRAI’s NTO 3.0 issued in 2023, have led to price hikes across multiple channel bouquets. DTH players, already grappling with thin margins, declining ARPU (average revenue per user), and increasing customer churn, have taken a defiant stand by removing key broadcaster channels from their base packs.
According to Vikas Sachdeva, Executive Vice President & Head of India International Business at Zee Entertainment, “DTH platforms are pushing back, citing thin margins on low-cost base packs, high payout per subscriber for these expensive bouquets, and a desire to reduce dependency on a few big networks.”
Sachdeva also points to serious consumer and broadcaster implications.
On the consumer side, the removal of these channels from base packs means that watching favourite shows now comes at an extra cost. Viewers—especially those less digitally savvy—must manually add channels or bouquets, complicating the experience. This is especially challenging in rural and low-income markets, where subscriber churn is most likely to occur, he said.
He added that, “younger users may ask, ‘Why bother with DTH?’ and switch to OTT platforms. That’s a very real risk.”
On the broadcaster side, the fallout is equally serious. Being dropped from a base pack reduces passive reach dramatically, pressuring ad revenues and brand visibility—especially for free-to-air (FTA) channels that rely heavily on mass reach, he explained.
Subscriber Experience and Churn: A Balancing Act
The removal of Sony and Zee channels from DTH base packs is not just a pricing dispute—it raises questions about the fundamental viability of linear pay-TV distribution in a world increasingly dominated by OTT.
According to a senior broadcast veteran, “DTH continues to be under pressure due to high churn, whereas broadcasters are under pressure to increase revenue. In this scenario, neither the operator nor the broadcaster wants to move channels out of the base pack. Doing so could drive subscribers away and impact ad revenue. Putting them on an à la carte basis will hit both parties. This standoff will be resolved—it has to be, because it's in both parties’ interest.”
There’s consensus among experts that the removal of popular channels from base packs could backfire by reducing consumer stickiness. While DTH operators aim to nudge subscribers toward higher-value packs, this approach may alienate price-sensitive users—especially when free dish options and OTT streaming provide increasingly viable alternatives.
The DTH Perspective: ARPU vs. Regulatory Mandates
Another industry expert, who did not wish to be named, elaborated on the financial logic behind these removals, “If DTH operators provide too many popular channels in the base pack, there's little incentive for users to upgrade to higher-priced packs, which hurts ARPU. Naturally, operators want to keep the base pack lean so that users opt for premium packages.”
This viewpoint is also linked to how FTA channels and carriage fees operate.
“Some free-to-air channels offer carriage fees to DTH platforms, creating a monetisation opportunity. However, if a broadcaster like Zee or Sony doesn't offer these incentives—or demands high subscription payouts—DTH platforms are less inclined to include them in base packs unless contractually obligated,” the expert said.
The legal minimum number of channels required in a base pack still needs to be maintained. But within those boundaries, DTH providers are trying to find a formula that maximises revenue and minimises costs, even if it means risking short-term customer dissatisfaction, he added.
Legal and Regulatory Ramifications: The Sony-Tata Play Dispute
The removal of Sony Pictures Network (now Culver Max Entertainment) channels from Tata Play’s base pack has now escalated into a full-blown legal battle. SPNI approached the Bombay High Court to challenge a TDSAT directive regarding the removal of its content and communication on social media. Tata Play had earlier removed 27 Sony channels from its base pack after a dispute over annual renewal terms, which included a ?300 crore demand from the broadcaster.
The TDSAT has asked Tata Play to make a partial payment of ?40 crore, while the remaining dispute over renewal terms—including the alleged 10–20% hike in subscription fees—is set for a hearing on July 23. Until then, Sony channels remain accessible only on an à la carte basis or as part of Sony-specific bouquets.
Meanwhile, Tata Play has stated that over the last decade, it has already paid ?4,000 crore to Sony, including around ?700 crore annually, underscoring what DTH platforms perceive as an unreasonable hike in the current market context.
Airtel Digital TV vs. Zee: Silent Disruption
While the Tata-Sony standoff has played out in full public view, the removal of Zee channels from Airtel Digital TV’s base packs has happened with little communication from either side. It is believed that Airtel, like Tata, resisted Zee’s new pricing structure, prompting the silent takedown.
The lack of consumer communication may temporarily contain reputational damage, but it also fuels confusion among subscribers, many of whom may feel betrayed or frustrated by the disappearing content, further exacerbating the risk of subscriber churn.
The Way Forward: Resolution or Rupture?
While these disputes appear contentious, there’s a wide consensus that a compromise is inevitable.
“Such measures are taken keeping in mind the viewers’ choices and platform sustainability,” says a DTH expert. “If a subscriber does not want to watch a few channels, why should they be made to pay extra? Only some packages have been revised. If they wish to watch, they can pay for it.”
This statement captures the DTH industry's balancing act: between profitability and customer satisfaction, between regulatory compliance and commercial flexibility, and between retaining traditional viewers and appealing to a new generation leaning toward digital platforms.
But the big question remains: Will this strategy of cutting base pack content to boost margins work? Or will it accelerate the flight of subscribers to OTT and free platforms?
As India's DTH sector matures and collides with the streaming revolution, standoffs like these are increasingly likely. The combination of rising content costs, regulatory changes, and evolving consumer habits is placing enormous pressure on traditional pay-TV economics.
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