Tuesday, March 25, 2008

India Television Channel Subscription Model

posted by ShyK at 00:26

I subscribe to Tata Sky for television channels at home. My bouquet of channels unfortunately does not include the channel(s) which would show the India-SA cricket matches and Tata Sky sent me an alert today reminding me that I need to pay up to watch the matches getting me all hassled.

Now, some amount or other would apply whichever DTH or Cable provider I used. And, the amount involved is really minuscule – a paltry INR 199 per television per annum (US$ 5) on top of the approx INR 450 (US$12) per month that I spend on subscription for two televisions. The amount looks ridiculous when I compare it to an approx US$ 80 per month that I would pay for comparable set of channels in the USA – and the up-to US$ 5 per game that I would end up paying for pay-per-view in the USA. So, why has this 50 cents a month for a bouquet of channels got my tail up?

Well, I have a problem with the fact that this particular channel is advertisement supported. So much so, that quiet often you end up missing a part of the actual game because advertisement is being aired. I fail to understand the need to pay additional money on top of the basic rental that I anyway pay, to view a channel which is probably earning huge revenues on advertisement. That I think is just one of the many issues that TRAI and the Information & Broadcasting ministry needs to tackle / address.

In my view, we in India, need regulations around

  1. Pricing per Channel – Perhaps the government could classify channels into two types
    • Paid Channels – These should be restricted from showing any product / services advertising and the sole revenue source for these channels would be subscription fees. India’s 1.2 Billion populations means that even if just 0.1% actually paid subscription fees for these channels, that would still be 10% of the customers that Dish TV has in USA.
    • Free to Air Channels – The Cable or DTH provider must show set number of these channels at no cost beyond a basic monthly subscription fee. There is already a law requiring certain channels to be carried but that law is limited to the state sponsored Doordarshan Channel
    • Something In Between – Given that India with a notional GDP of US$ 2,000 may not be ready to yet pay US$5 per view – maybe there should be some channels which have a nominal fee. Given that India has more than 2.5 MM DTH subscribers and probably more cable subscribers than that in Mumbai city alone – I think this could also form a substantial revenue chunk. While this is what exists today – its important to govern this with laws limiting content to advertisement ratio and perhaps on laws around having advertisements scrolling on the screen while the content is on.
  2. Delivery Mode – Encrypted vs. Un-Encrypted. The Encrypted channel should require explicit subscription sign-offs and could thus be allowed to depict content that could be offensive to some but desirable to others. It should also be possible to allow advertisements for alcoholic / tobacco and other adult oriented products on these channels – a much better approach than the surrogate advertisements currently allowed.
  3. Content Advisory – All channels should be required to carry a content rating on the screen all the time. In fact this is what happened when Star TV first started broadcasting in India. Over the years, as other channels have mushroomed the practice has vanished. As a pre-requisite, its essential to create what is perhaps a given in most countries but lacking in India. We need a proper content rating mechanism (G, PG, 15, 18, R etc) instead of the current U / UA / A. That should off course be supported with additional detailed content advisory (Language, Violence, Nudity).

None of this is probably very difficult to implement. Guess I should continue dreaming that it would happen sometime soon.

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