Major broadcasters increase channel pricing

Major broadcasters in India have increased their channel pricing, after a gap of three years. The move follows the TRAI’s amendments reinstating the old MRP cap of Rs 19 and removing the ‘twin conditions.’

The likes of Zee Entertainment Enterprises (ZEE) and Sun TV Network have filed their reference interconnect offers (RIO). The new pricing, for la carte and bouquet, will come into effect on February 1, 2023. Viacom18 and Disney Star are expected to file their RIOs soon. 

The hike will have a positive impact on revenue estimates for the broadcasters, says Karan Taurani, Senior Analyst at Elara Capital.
“The prices of bouquet been revised upwards by 10% on average (slightly ahead of our estimates of 8% price hike as mentioned in our report); this is bound to have a positive impact of 4-5% on revenue estimates for FY24 for broadcasters.
Further, the broadcasters have also rolled back ala carte pricing towards INR 19 for their marquee channels (from INR 12 earlier / due to uncertainty over NTO 2.0); however, this rollback won’t have any impact on ARPUs, as the shift from INR 19 to 12 was only notional in nature as by RIO’s (Reference Interconnect Offers) submitted last year post NTO 2.0 norms,” said Karan Taurani.

“As mentioned in our update the current tariff order - NTO 3.0, does not have any material difference vs NTO 1.0, except the fact that discount percentage for sum of ala carte vs same channels in the bouquet should be capped at 45%,” he added.

According to the analyst, the price hikes are a positive for broadcasters and may drive upgrades in the range of 3-5%, in case of no chord cutting/shaving trends due to price hikes.