Chorus for forbearance grows as JioStar, Sony and Zee hike MRPs

New Delhi: Top broadcasters – JioStar, Sony and Zee – heralded in 2025 with new rate cards for their channels and sought a significant hike in MRPs and bouquet pricing.

For the first time, JioStar broke the ceiling of Rs 19 for a couple of SD channels and priced them at Rs 25. The broadcaster priced the SD versions of Colors Kannada and Maa TV at Rs 25, thus making them available only on an a-la-cart basis.

Registering their strong protest against the hike, the cable operators (DPOs and LCOs) advocated the formula of forbearance introduced by the Telecom Regulatory Authority of India (TRAI) last year.

When asked if the hike in MRPs and bouquet prices changes anything on the ground, a broadcast veteran said, "Nobody is adhering to the MRP regime. Be it a small independent broadcaster or a large network, everyone strikes deals with DPOs. Only the a-la-carte customer, which is only 1-2% of the entire consumer base, feels the impact of increased MRPs."

A senior broadcast executive who did not want to be quoted told BestMediaInfo.com that it is not a question of affordability.

“Today, the same consumer is paying increased prices for everything. Why should cable bills remain the same even after only 5 years or 10 years? Is there any study to establish that the shift to digital, which is the main reason for cord-cutting, is taking place because a customer is not able to spend Rs 50 more on her cable bills? The answer is the availability of choices,” the executive said.

“The cord cutting is a natural progression. It is taking place because the consumer is ready to pay more for a variety of content. The consumer who is not willing to pay cable bills is opting for DD Freedish. It is clear that the pricing has become the punching bag for a few sections of the broadcasting ecosystem,” the executive added.

A distribution expert said that the consumer is still paying a decent ARPU to the LCOs who completely control or hold on to any kind of price increase.

“Then comes DPO ARPU which is hovering between Rs 90-100 per subscriber. LCO might be charging from customer around Rs 300.”

An LCO with around 500 subscribers would pay for an office and 3-4 staff but would be rarely left with money to pay to DPOs.

“This entire economics is unviable for them. This is where the concept of forbearance was propagated by former TRAI chairman PD Vaghela,” the distribution expert said.

“JioStar, Sony and Zee might have increased MRPs of their channels but the income will go up only when the hike is implemented on the ground not just at the consumer level but also at the LCO level. Only in that case, some bit of realisation is possible for all the stakeholders,” the expert added.

"A broadcaster would increase MRP or bouquet price and expect the entire amount along with 18% GST in its earnings. Broadcasters don’t factor in LCO economics. All said and done, a rate increase does not guarantee the receipts,” commented the distribution expert.

When asked why the broadcasters increase MRPs and bouquet prices without proportionate returns, the distribution expert said, “They do it to mount pressure on the distributors before the deals season. Broadcasters believe that rate hike gives them an edge in negotiations with DPOs.”

If a DPO fails to strike a deal with a broadcaster, the channels become available a la carte. That is where the DPOs come under pressure. Everyone sits with the broadcaster and operates on the basis of negotiated deals.

“The ecosystem is still running on understanding. Rest is just a modus operandi on paper. That is why everyone was expecting for the forbearance. Once it is done, the entire broadcasting operation will return back to the old days of negotiations. The MRP regime was aimed at fixing accountabilities but somehow it failed to realize on the ground,” the distribution expert quoted.

On the other hand, broadcasters have seen a steady rise in their distribution revenue and the MRP regime appears to benefit them in negotiating deals. Before the MRP regime, a broadcaster would struggle to seek any hike in deals and the distribution revenue would remain stagnant for years.

“Forbearance among the stakeholders would have closed the gap but that would require another push by the new TRAI leadership,” said the industry veteran quoted above.