Why Prasar Bharati lost nearly Rs 150 crore in DD Free Dish auction

The second round of the DD Free Dish MPEG-2 slot e-auction turned into an unexpected windfall for broadcasters, but at a steep cost for Prasar Bharati. What was expected to be a high-stakes bidding war collapsed into a near-base-price clearance sale, as most slots were allocated with meager price hikes of just Rs 10-Rs 15 lakh per slot. Industry insiders estimate that Prasar Bharati may have lost at least Rs 150 crore in potential revenue, as major broadcasters strategically held back after the controversial disqualification of all Round 1 applicants.

Bucket R1 fallout

Bucket R1, which includes Tamil, Telugu, Kannada, and Malayalam channels on DD Free Dish, was significantly impacted by the disqualifications. 

With many applicants forced out, broadcasters in Round 2 chose not to engage in aggressive bidding, knowing the slots would remain uncontested.

While Prasar Bharati did not make any formal announcement about the disqualifications, but as the matter escalated into a legal dispute, broadcasters began discussing it internally, and word spread quickly. By the time Round 2 auctions began, most players were aware of the situation, influencing their bidding strategies.

“This shift in auction strategy has raised concerns within the industry, with many broadcasters calling it unfair and questioning the transparency of the process,” said a source close to developments.

Several TV channels, including Popular TV and Movieplex, were among those rejected by Prasar Bharati in the recent MPEG-2 slot e-auction. This sudden disqualification prompted legal action from at least one affected broadcaster, Vision Corporation Ltd., which operates channels like House Full Movies, Multiplex, and Movie Plus. Vision Corporation’s application for Bucket R slots was rejected on the grounds of incorrect and misleading information regarding the channel’s genre and language classification. The broadcaster also failed to meet the eligibility criteria of being a predominantly Bangla channel, as non-Bangla content was found to dominate the programming.

“Prasar Bharati had requested video recordings to verify the content, but Vision Corporation failed to submit them before the deadline. Arguing that the rejection was discriminatory and procedurally flawed, Vision Corporation challenged the decision at the Telecom Disputes Settlement and Appellate Tribunal (TDSAT),” said sources close to development.

In response, the tribunal issued an interim order directing the petitioner to submit the required video recordings, while instructing Prasar Bharati to review them immediately before making a final decision.

Strategic bidding in Round 2 keeps prices low

With Round 1 bidders out of the equation, Round 2 broadcasters expected easier access to slots at lower prices. The aggressive competition of the first round disappeared, paving the way for a tactical bidding game where broadcasters coordinated to secure slots at the base price.

The contrast between Round 1 and Round 2 was stark. On Day 1 for instance when bidding was at its peak, A+ category slots secured bids between Rs 17 crore and Rs 18.6 crore. Zee snapped up one slot for Rs 18.60 crore and another for Rs 17.25 crore, while Star secured its slot at Rs 18.25 crore. With Bucket A’s reserve price set at Rs 12 crore, these figures reflected healthy competition.

But by Round 2, the game had changed. The absence of the first-round players drove bidding into a nosedive, with broadcasters strategically waiting out the process to scoop up slots at base prices.

"This shift in auction dynamics has resulted in a revenue loss of over Rs 150 crore—not just for Prasar Bharati but also for Round 1 bidders, who paid a premium only to see others walk away with cut-rate deals," said an industry insider.

Industry backlash
 
The cancellation of Round 1 applications has left many broadcasters frustrated, The disqualified channels received official communication of their rejection as late as 10 PM on February 12, while the rest of the industry only became aware when Round 2 bidding was already underway.

With mounting industry dissatisfaction and legal challenges looming, stakeholders are now questioning the transparency and fairness of Prasar Bharati’s auction process.

In FY 2017-18, (before abeyance of e-auction), Free Dish revenue stood at Rs 278.1 crore. This increased to Rs 454 crore in 2018-19 (during abeyance of e-auction), going up slightly to Rs 457 crore in 2019-20.

The recent lacklustre bidding in Round 2 of the latest auction signals further concerns over stagnation, potentially impacting Prasar Bharati’s long-term auction strategy.

The question now is: Can Prasar Bharati regain control, or is the Free Dish auction model reaching its tipping point?