Is Prasar Bharati suspecting a cartel at play behind drop in DD Freedish prices?

New Delhi: Smarting from lower revenues from the 7th annual e-auction for DD Free Dish compared to the past couple of years, Prasar Bharati is allegedly planning to probe the possibility of information leaks regarding bidding by insiders, as well as any potential cartelisation by the bidders, industry sources told BestMediaInfo.com.

However, Prasar Bharati officials remained tight-lipped and refused to comment on the query.

The pubcaster is yet to release the final earnings from the e-auctions concluded on Friday. However, it is estimated that the revenues from e-auctions for 2025-26 were down by Rs 200-300 crore. 

Last year, Prasar Bharati earned approximately Rs 1,157 crore by selling 64 MPEG-2 slots. In 2023, it had made Rs 1,071 crore from the e-auctions.

2022 was not good for the pubcaster as it earned Rs 645 crore from the allotment of 59 MPEG-2 slots.

What led to the accusation of "cartelisation"?

The e-auctions proceeded as per the public broadcaster's expectations until broadcasters with deep pockets paid high premiums on the reserve price in the first round.

In the first round, Bucket A+ attracted approximately a 20% premium, with top broadcast networks jumping into the fray after Zee Entertainment allegedly reneged on an informal understanding not to bid for Hindi general entertainment channels.

This made it impossible for independent broadcasters to bid in the first round.

Bucket A also saw all the top broadcasters winning all six slots in aggressive bidding, with the premium touching 40% over the reserve price.

The premium reached 105% in Bucket C, with Adani Group-owned NDTV India buying the first slot, followed by Arnab Goswami-owned Republic Bharat and Reliance Industries-owned News18 India.

BestMediaInfo.com had reported before Round 2 that independent broadcasters were contemplating withdrawing bids beyond a certain level.

Thus, the second round, where only five cash-strapped general entertainment channels were left for bidding, attracted a 2-4% premium.

The third round, reserved for the movie genre, saw B4U Movies winning a slot at the base price of Rs 13 crore, while the other seven independent channels paid only a 1-2% premium over the reserve price.

This was repeated in the fourth round, where four smaller players picked up slots with a premium between 0.5% and 1%.

Then, six Hindi news channels picked up the remaining six slots, paying a premium between 1% and 3% over the reserve price of Rs 8 crore.

It must be noted that the reserve price increases by Rs 1 crore for each bucket from the second round onwards, and the above premium is calculated as per the respective rounds.

This was the first time under the new methodology that no player from other genres jumped their respective buckets in the second round.

Last year, the desperate news genre jumped from Bucket C to A+ due to the general elections. However, most of the cash-strapped news channels had told BestMediaInfo.com that they would not be able to afford high bids and would leave the platform instead. Nevertheless, they all managed to acquire a slot in the fifth round following a sharp fall in pricing compared to the previous year.

Cut off from market reality?

On the face of it, the fall in bidding prices was clearly due to market dynamics, and any business has the right to decide on an upper limit to bid, anticipating the return on investment.

BestMediaInfo.com has reported on several occasions that the industry accused the public broadcaster of revising a methodology in 2023, enabling every player to jump their buckets.

Prasar Bharati, which operates on an estimated but not actual number of subscribers, has been accused of taking unfair advantage of its monopoly on the free platform.

Amid the ongoing auction, distribution veteran Ashok Mansukhani questioned the validity of the number of subscribers of DD Freedish.

While the estimated 40-45 million subscribers are seen as potential for brands looking to grow in rural markets, a large chunk of them are believed to have the least buying power. At the same time, most subscribers move to pay TV or digital media the moment their buying power increases.

Despite that, the channels, especially Hindi news channels, were ready to pay three times the base price due to the weight given to the free platform in the rating system.

On the other hand, Pay TV operators challenged the relaxation given to DD Free Dish on the encryption of channels as per the uplinking/downlinking guidelines. They argued that DD Free Dish is one of the reasons for the decline of Pay TV.

However, without factoring in these aspects, Prasar Bharati officials suspected a "cartelisation" theory soon after the e-auctions ended on Friday evening.

Industry questions Prasar Bharati

It is alleged that WhatsApp conversations between broadcasters were shared with Prasar Bharati, leading to suspicions of cartelisation.

Several legal experts dealing with matters related to the Competition Commission of India (CCI) told BestMediaInfo.com that CCI rules define cartelisation as formal arrangements made between players through industry bodies.

"In this case, industry bodies such as IBDF, NBDA, and NBF are not directly and formally involved. There is no question of cartelisation. At best, this could be a case of information leak from within Prasar Bharati, where the number of bidders in each round could have been unofficially communicated," said an advocate dealing with CCI cases who did not want to be named.

“WhatsApp is a means of communication, just like a phone call. How else would people communicate? Reaching a mutually beneficial understanding is not a crime unless—and I repeat—it is formalised by an industry body or through the formation of an official group," the senior advocate added.

When asked if the onboarding and exiting of the platform together by top broadcasters in the past would fall under cartelisation by Prasar Bharati's logic, the senior advocate said it would not unless it was a formal arrangement through the industry body.

"These things happen through informal understanding and hence do not fall under cartelisation. Any business or the entire genre has the choice to participate or not at any price point. Bucket R1 attracted only one bidder this year. Would you call it cartelisation by the regional language channels?" the senior advocate quipped.

Last week, BestMediaInfo.com reported how bid prices could correct this year, with I&B ministry officials convinced that this year might not witness aggressive bidding.

At least two broadcasters told BestMediaInfo.com that Prasar Bharati and the ministry had hinted to them about softening prices.

"Forget about the platform. The entire TV revenue is declining. Several players have witnessed a drop of 25-40% in their advertising revenues this year due to macroeconomic conditions. Even GroupM’s This Year Next Year report predicted a decline in TV ad spends this year for the first time. We get the worst advertising rate for the free audience. Still, how can we continue to spend 40% of our distribution budget on DD Free Dish? Isn’t it unrealistic for Prasar Bharati to expect the same revenues when industry players are in the red?" said an independent broadcaster on the condition of anonymity.

Another independent broadcaster told BestMediaInfo.com that the narrative around cartelisation might have been peddled by the broadcasters with deep pockets who ended up paying above Rs 120 crore in excess compared to the bidders beyond Round 2.

"Prasar Bharati was happy when it forced cash-strapped broadcasters to cough up about three times the reserve price. Why was there no scrutiny over its alleged extortion from us due to its monopolistic nature? Just because no business would like to fight with the government, it must not behave as if 'Caesar's wife must be above suspicion’," the broadcaster said.