In-depth: Has the dust settled on TRAI's new tariff order?

More than three months after the Telecom Regulatory Authority of India’s (TRAI) new tariff order (NTO) on the pricing of TV channels came into effect, broadcasting and media experts feel its impact is going to last another quarter.

The NTO has completely turned India’s broadcasting industry upside down by changing the way broadcasters and distributors charged consumers for watching TV.

After the order came into effect on February 1, all broadcasters had to change the composition and pricing of their bouquet plans and redesign them according to the new rules. The NTO promises to empower the viewer by giving him the option of paying only for those channels which he wishes to watch. Under the new regime, distributors have to offer a minimum of 100 free-to-air channels for a fixed price of Rs 130 per month.

The order created so much flutter in the industry that BARC had to stop publishing viewership ratings for the public as the channels that were among the most-watched before the NTO were nowhere on the viewership charts after the new regime came into place. The reason for this was the unavailability of most of these channels in the new packages.

The Indian Society of Advertisers (ISA) also had to issue an advisory to members to ignore BARC ratings for media planning.

How are advertisers planning their TV spends under new regime?

After the implementation in February, the brands have been playing a bling game as due to a disparity in TV audience measurement, BARC India also took a decision to black out ratings for the public. With no proper measurement unit in place, marketers are still mainly dependant on popular properties and top channels. Also, since distributors have to compulsory offer 100 free-to-air channels (FTA), marketers have shifted their focus on these as the minimum reach is guaranteed there.

ISA still hasn’t issued any advisory to its members on whether they should start using BARC data. Experts said media planning continued to be done on the basis of popular properties and big events.

 Another quarter before situation normalises

The experts said it will take two to three more months for the market to settle completely. R. Venkatasubramanian, National Head of Investments, Havas Media India, said since most of the big networks converted their FTA channels into paid, and viewers are still accommodating to that shift, it will take at least two or three months to settle. “It is not completely settled, niche channels like English, infotainment, music and lifestyle are not yet settled right now. Also, consumers are still learning about the process though they are doing it. It will take at least two months to settle,” he said.

Pratyush Chinmoy

Pratyush Chinmoy, Head of Marketing, Onida, also said that there has been confusion within consumers on the pricing part. However, once a few more months go by, it will be as transparent as the regime was intended for, he said.

General elections and cricket tournaments have come as saviours for India’s broadcasting industry 

While things are predicted to settle in the next two months, marketers said big events such as the Indian Premier League, general elections and World Cup 2019 diluted the severe impact of TRAI’s NTO.

BK Rao

BK Rao, Marketing Head, Parle Products, feels that now the market is relatively better as most of the things have settled on the regime front and he doesn't see much of a change in the market in future. Rao said, “Frankly speaking right now we weren’t seeing much of an impact because of IPL, World Cup and general elections. Also, since cable operators have opted to follow the regime, things have settled a bit. Earlier, there were a lot of blackouts but now probably they have realised that the timeline is getting shifted. Even consumers have started to shift to different platforms like DTH because of which the cable operators realised that they will lose big time if they don’t follow the regime. So, they have compromised and have started following the regime and now things are relatively better.”

Ever since the new regime, marketers have been experimenting with different media strategies to promote and market their brands. When asked if they will continue to experiment with their media strategies or will stick to the current plans, marketers said they will continue with their current strategies.

Rao stated that as a marketer they are planning to continue with their current strategies. He stated, “Our focus will continue to be on free-to-air, especially regional channels like Dangal and Big Ganga, as they are doing extremely well. Channels like those are a boon for us so we will continue with our existing media strategies of focusing on FTA, GECs, movies and news channels.”

RS Sodhi

RS Sodhi, Managing Director of Gujarat Co-operative Milk Marketing Federation (GCMMF), which runs the popular dairy brand Amul, commented, “Right now we are focusing on sports, live events, regional news. Our strategies aren't going to change because I think the market will undergo further changes. Not just because of TRAI, but also because of these OTT players like Netflix, Prime Video, it is becoming difficult for us to attract viewers as things are very dynamic and we will have to pay attention.”

Speaking about the future impact, Chinmoy said, “Content would be the biggest deciding factor behind a consumer opting or ignoring a channel. It affects broadcasters and consumers in the short term, but in the long term, the regime would be good for the industry. Broadcasters’ pricing is bound to be affected based on consumer preferences, plus the ad revenues might take a hit for channels where consumer reach has reduced. We have closely followed the reach of the channels before taking decisions on media buys. Certainly, it led a bit of delay in negotiations and closure of deals as the numbers were changing every day. But it will take 2-3 months more for everyone in the industry, including us, to understand the full implications.”

Rao said the next event that will once again change the TV ecosystem is the launch of Jio Gigafiber. “The next key event after World Cup 2019 would be the introduction of Jio Gigafiber. It will change the game completely because there will be a huge bearing on cable and DTH players. If that happens, then the media scenario will change once again completely,” he added.

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