Broadcasters will need to pull up their socks in the new tariff era

On December 29, TRAI's new tariff regulation that enables consumers to pay only for those TV channels they want to watch, will come into being.

So, if you are a Marathi-speaking individual, living in Pune and you mostly watch a host of Marathi general entertainment channels, probably one or two Hindi entertainment channels, sports channels and a few regional news channels, you are free to subscribe to only those 8-10 channels.

This will be in addition to the base pack of Rs 130 (comprising of FTA channels) channels that one will in any case get. Till date, consumers have been used to being piled on with hundreds of channels (at a fixed tariff) most of which they hardly watch.

The new 'pay and watch what you want' era, will not only lead to an attitudinal shift of the consumers, it will also force the broadcasters to be far more competitive and alert. First and foremost, the content has to be compelling enough for the consumer to invest in it and the role of the marketing teams of the broadcasters will become much more crucial than it ever was. Star Plus, Zee, Sony or any other channel will now need to aggressively hard sell.

After all, the consumers now exercise the right of not buying the channels they think isn't good enough.

"The TV category communication used to be DDT (day-date-time). You assume that the channel will be there, hence, watch this show at this time. Now you also need to drive purchase, which will be a reasonably strong challenge especially when consumers are not used to making the purchase decision," agrees Prathyusha Agarwal, Chief Marketing Officer, Zee Entertainment. And, to drive purchase, the channels will need to not just invest in better quality content, but also market it aggressively.

All broadcasters have created bouquets with attractive pricing. Star India, for instance, has created a basic bouquet for Rs 49, while its premium HD pack is priced at Rs 120. Similarly, a basic ZEE pack is priced at Rs 45.

If a consumer were to buy each of these packs from the broadcasters, her monthly pay-out will increase to about Rs 450-Rs 500 per month from the current Rs 250 per month. Buying a-la-carte isn't really a cheaper option either.

Premium channels are priced between Rs 15 and Rs 19. If she buys 10 premium channels, her monthly payout will be around Rs 320 (along with the base pack). "When the prices increase, the offtake of each consumer will be limited. He/she will not buy more than 18-20 channels. One has to realise that TV is not a business of necessity. The consumer is price-sensitive and will try to bring down costs as much as possible," explains Pankaj Krishna, CEO, Chrome Data Analytics & Media.

So, an increase in channels prices will not necessarily have a positive impact on a broadcaster's subscription revenue. In fact, the coming months will see huge investments in content costs at the broadcasters end as content will be the only tool to woo consumers.

"This move will reward you for being business savvy, for being customer savvy and demand tuned in. Your content is now getting valued. If your brand and channel is highly valued, you will command a better price and this can be ploughed back into creating better content. I see that as a great opportunity," remarks Agarwal of Zee.

The new tariff system finally brings in the much needed transparency in the world of television. The pricing of DTH and cable will be uniform. But aren't these moves a little late in the day, especially with OTT making strong inroads and eating into television revenues?

Krishna of Chrome DM, says, better late than never. "It is now level playing field for TV and OTT. If cable wants to compete with OTT, it has to be transparent." The belief is that broadcast still has a long way to go in India and OTT can't really substitute television any time soon.