What started in the garb of a fight between cable operators and broadcasters over the new tariff order (NTO 3.0) in January was just a precursor to the attempts to disrupt the television broadcasting of IPL.
In yet another takedown effort, Reliance-owned three large MSOs – GTPL, Den Network and Hathway – have moved the IPL’s TV rights holder Star Sports from the base pack to higher packs starting April 1.
Change in pricing and packs:
In compliance with NTO, GTPL has increased the pricing of its base pack by 30% to Rs 325 from Rs 250. Star Sports channel, which was available in the Rs 250 pack earlier is not a part of the Rs 325 pack (Power Lite Pack) and has been now moved to the Rs 375 pack onwards.
However, GTPL’s non-FTA base pack of Rs 325 includes Sports18 and Sony Sports Ten3 (sports channels) but does not include any Star Sports channel.
Not only Star Sports but other channels from Disney Star also do not feature in the Rs 325 pack despite the fact that it includes channels from Zee Entertainment and Sony.
Hathway too has increased the pricing of its base pack from Rs 199 to Rs 275. It includes Sony Sports Ten3 and other entertainment channels from Zee and Sony but not even a single Star channel.
Earlier, Star Sports channel was available in the Rs 299 pack but now it would be available in the Rs 335 pack (Hindi Super Value). Other entertainment channels from Star have also been placed in the Rs 335 pack.
The pricing of Den is similar to Hathway and here too Star channels - including Star Sports - have been moved to the Rs 335 pack (Hindi Super Value) onwards.
Singling out Star
A distribution veteran told BestMediaInfo.com that Reliance is relentless in hurting Star by resorting to 'anti-trade' practices as the broadcaster has been singled out and meted with differential treatment.
“But it cannot be predicted who will bleed as a result of this fight,” the veteran said.
“The DPOs finally agreed to sign the interconnection agreements as per the provisions of NTO 3.0 sensing trouble for their subscription base. That danger still exists if they continue to create problems for their subscribers,” he added.
Can this move backfire for Reliance-owned DPOs?
While the latest move by the Reliance-owned DPOs is allegedly aimed at hurting IPL viewership on television in order to benefit the digital rights holder - JioCinema, experts cautioned that the 'anti-trade' move might backfire.
This can work either way, according to Karan Taurani of Elara Capital.
“One theory is that a lot of people may not watch IPL on TV after the price hike and might transition to digital. But we believe that the chances of migration are very low because the number of smart TVs in India is in the range of 30-35 million which is not more than 12-15% of the overall market. Even within that, there is a question mark in terms of how many of them would have a steady broadband connection,” Taurani said.
“Live experience is a key to broadcasting and that too without any kind of interruption. Hence, we do not see a rapid cord-cutting,” he added.
“If at all, there would be a very minimal impact. In a worst-case scenario, maybe 5-10% of the subscribers of the three MSOs will opt to move to pure digital as they would need to have a smart TV and a very steady broadband connection,” said Taurani.
The distribution veteran quoted above did not see any business sense in the attempted disruption.
“Any sort of cord-cutting will negatively affect the distribution arm of Reliance and they will be doing this at the cost of their own businesses,” the distribution veteran said.
Another aspect of the move, according to Taurani, is that a larger chunk of these affected households will pay 15-20% higher ARPU to have Star Sports in their package, as IPL is consumed in large groups on a big screen without any potential interruptions due to data speeds.
“A few viewers may also choose to go for a-la-carte. Considering that many of the customers may go for higher packs, it will indeed end up benefiting Star,” Taurani added.
Explaining this, Taurani said that the negative impact will be offset by the positive impact in terms of higher subscription revenue by customers, which in turn will lead to higher subscription revenues for Star and IPL, at a time when ad revenues seem to be under pressure due to new age companies cutting ad spends.
“We thereby believe that the move by Reliance-owned DPOs will have a neutral impact in a worst-case scenario for Star and could potentially be a positive impact with customers moving to the higher pack or pure a la carte due to exclusion from base packs,” Taurani concluded.