Star India readies itself for new tariff regime

After vehemently opposing the Telecom Regulatory Authority of India's (TRAI) tariff order on the new pricing of channels, Star India has called the move a game changer for the industry and a great value proposition for viewers.

Earlier, Star had contested the tariff order in various courts. In October, the Supreme Court has dismissed Star's appeal, which paved the way for implementation of the TRAI order. Under the new policy, the channels can't mix free-to-air channels with paid channels in a bouquet and offers consumers a choice to pay for channels they want to watch.

Sanjay Gupta

“This is the biggest shift the industry could have asked for and has great value. The new tariff order is bringing transparency into the whole system — from how content gets created to how content is sold. The consumer pricing can’t be changed continuously so I think it will also bring lot of discipline," Sanjay Gupta, Managing Director, Star India said.

From December 29, the consumer will have to choose individual channels, which means the bundle packages won’t work and they have to pay for each channel from different broadcasters. Now, broadcasters are offering bundle packs. Each broadcaster will have their own rates which will differ according to markets. Consumer will need to spend extra for adding each channel.

Gupta said that though consumers won't face any issues with the change but broadcasters and distributors may see some initial hiccups. He also said that TRAI must extend the implementation deadline by a week or two if all players aren't ready by December 29, the date when order comes into implementation.

"We expect some initial chaos, which will take some time to settle. TRAI must lead this transition. And if all players aren't ready, TRAI must give some more time," Gupta added.

Star India's distribution head Gurjeev Singh Kapoor said that the success of implementation will also be dependent on the cooperation of MCOs and LCOs. "They need to take it to the consumers and if they aren't very cooperative, consumers can always move to the DTH platform."

To ensure that the consumers are provided with affordable packages, Star is bundling channels from all genres in a value pack of Rs 49. The package also includes the sports channels on which Star had earlier charged a premium. The HD pack is priced slightly higher.

Talking about the pricing strategy of the network, Gupta said, "In Rs 49, consumers will get access to sports content along with Star Plus, a movie channel and even an infotainment channel."

"Earlier, packages with sports channel were costing between Rs 100 and Rs 200. We're making sports accessible and affordable," he added.

The network has already launched an awareness and communications campaign to take the new pricing to consumers. The information on packs is also available on its website and Hotstar.

Gupta feels that the new pricing, which offers consumers the choice of dropping the channels, will also help the quality of content to improve.

"Consumer will be the king and channels that aren't providing high quality content won't get viewership and consumers will drop them," he said, adding channels will have to increase investment in content.

"Star is already making high investment across genres to produce high quality content," he added.

The impact of the new policy on FTAs is yet to be looked at.

Gupta also said that BARC must halt releasing viewership data for a couple of months once this order comes into place.

“We have 180 million homes measured through 40,000 boxes. If even in 10,000 boxes there is chaos, then the ratings won’t reflect. Everybody from the industry seeks to calibrate the sample again and that the BARC board has to decide the next step,” he said. “And that might also clear up the things for advertisers eventually after a bit of initial chaos.”

Under the new regime, broadcasters are not offering long term but monthly contracts. Consumers can download and sign the agreement for the channels and based on the number of consumers they get every month, the price that is set will get paid.

“We are offering DPOs a la carte content and bouquet content at the same price that is offered to DTH and cable. It is a transparent price. They can choose to make their own bouquets or they can combine bouquets offered by different broadcasters,” Gupta said.

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