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 Regulatory Affairs
Why price regulation for TV?
Business Standard, India Tuesday, August 17, 2010

Indians pay close to zero for newspapers, which is a fraction of its production cost. They have rejected paying for radio, but are willing to pay for movies of pay-per-view channels. The Governemnt hasn't thought of price regulation in any of these industries. But, it wants to regulate the price of TV. Why can't TV operate without regulations? , writes Vanita Kohli-Khandekar in Business Standard.

For some years now, Indians have had the pleasure of paying next to nothing for their newspapers. At anywhere between Rs 1 and Rs 4 a copy, Indian newspapers retail at a fraction of the Rs 15-20 they take to produce, not including fixed costs.
Most Indians rejected pay radio.


On the other hand, Indians are perfectly happy paying Rs 150 and more for a ticket to watch a film at a multiplex or Rs 50 to watch it on a pay-per-view channel on DTH.

In none of these markets was price regulation ever discussed.

... ...

Most media industries are no different from TV. They are chaotic, fragmented and have a weak regulatory framework.

Yet, the Ministry of Information and Broadcasting has never sought to regulate newspaper prices or those of film tickets. Why then is the regulator spending time, effort and taxpayer money on regulating the prices at which TV channels are shown? The latest Telecom Regulatory Authority of India (Trai) tariff order on cable and pay-TV pricing is another example of the regulator and the ministry’s desire to micromanage, instead of facilitate, growth.


The Rs 30,000-crore Indian television business suffers from several structural flaws. The biggest being the lack of pay revenues that are distributed equitably between the wholesalers (multi-system operators, or MSOs) and the broadcasters. Of the Rs 15,000-odd pay revenues collected by cable operators, only 10-15 per cent comes back to the broadcasters.

This has led to a ceaseless conflict between operators, broadcasters and MSOs. The regulator has periodically tried to stem it by forcing digitisation (the CAS Amendment in 2003) or by price regulation.

This displays a complete lack of focus. Both the regulator and the ministry should be working to create a framework that facilitates growth .


There seems to be, within the regulating bodies, a deep desire to micromanage.


If almost every other media industry, in fact every industry, can work without price regulation and find its own level, why not TV?


This article was published in the Business Standard on Tuesday, August 17, 2010. Please read the original article here.
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