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New tariff regime may not affect topline much, feels Viacom18’s Sudhanshu Vats

The successful implementation of TRAI’s tariff regime will have a direct link to the subscription revenues of TV channels, says the Group CEO and Managing Director of Viacom18

Sudhanshu Vats

The bottom line of broadcasters may take a hit on account of heavy investment on marketing initiatives to educate consumers about the new tariff regime coming into place from December 29 but there won’t be any big impact on the topline, feels Sudhanshu Vats, Group CEO & MD, Viacom18.

“My optimistic outlook says there won’t be a big impact on the topline. We will continue to do programming and introduce new shows to attract consumers and advertisers will continue to pay for that viewership,” he said.

But subscription revenue will depend on how things settle; if it settles fast then revenue may not be affected much, Vats added.

Currently, Viacom18 and TV18’s distribution arm IndiaCast have bundled the networks’ offerings in Budget, Value and Family packs to cater to the needs of different viewers. With a total of 57 channels (42 SD and 15 HD), the Viacom18 and TV18 networks’ channels will be available on a la carte basis. The networks have also introduced 10 channel bundles, in SD and HD versions, mapped for its markets (Hindi, North East, Kerala, Karnataka, Gujarat, Bengal, Maharashtra, Orissa, Telugu and Tamil).

For niche channels, Vats feels that they will be picked up if they have the pull. “Now there is a clear demarcation between Pay and FTA, what you price it is the broadcaster's choice,” he said.

But if TRAI’s 15% discount cap is upheld by the Supreme Court, then the broadcaster will have to revise its bundling. “If the 15% law is upheld it will affect pricing. If you look at the total channels and the discount we are currently offering, it is higher than 15%. So by definition, the channel pricing needs to be reworked,” Vats said.

Vats explained that DPOs can bundle their own packs but they will have to pay the broadcasters as per the proposed value pack. If the DPOs choose one of the channels from the broadcaster then they will have to pay the proposed a la carte pricing.

Speaking about the argument of DPOs about the increased pricing by broadcasters, Vats said, “The argument is if you aggregate everything that is available and say that you have to buy everything, then it defeats the purpose of the tariff order. The tariff order allows the consumer to choose what they want. If they choose what they want then there is no need of totalling up everything. If you are totalling up everything then yes, the pricing is high. But why are you totalling up everything?”

To ensure that the consumers are aware of the new regime, Viacom18 has launched a multi-media marketing campaign titled ‘Ek Me Hai More Yahaan, which advocates the comprehensive value for money that the ‘Colors wala Pack’ provides to Indian viewers. The campaign highlights the clear and present concern of Indians over the rising costs of entertainment and packages of top channels across genres so that the entire entertainment and news needs of an Indian family are taken care of. It defines the strategy of the networks wherein all the bouquets across Hindi, English and regional entertainment and news are packaged in a manner to help the viewers keep their monthly budgets at a minimum.

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