A BIG NO TO NTO 2.0

In an unprecedented move, top broadcast company CEOs across the domain gathered on one stage in Mumbai on Friday morning, to protest the newest recommendations made by the Telecom Regulatory Authority of India (TRAI). The recommendations under the New Tariff Order, or NTO 2.0, have upset the sector leaders at a time when the industry is navigating its way through issues like a slow economy, and recovery from the initial tariff order implementation.
The Indian Broadcasting Federation (IBF) said that it is evaluating legal option against the unwanted disruption that has already caused the industry a loss of over Rs 1,000 crore, and an overall loss of 12-15 million subscribers in the process.
“Content is King and that’s what we always said and heard about,” noted NP Singh, MD & CEO, Sony Pictures Networks India (SPNI) and President-IBF, adding: “Broadcasters used substantial amounts of money acquiring and producing top quality content for our viewers, whether it is sports entertainment, or knowledge content, the cost is very high.”
Uday Shankar, President, The Walt Disney Company Asia Pacific and Chairman of Star India and The Walt Disney Company, spoke about the thousands of crores spent in educating consumers and the ecosystem about the new tariff structure, which according to him was gradually settling in.
“I think despite some of its shortcomings, it had taken off the ground pretty well. Over a crore-and-a-half people had opted for the a-la-carte channels, so it was moving in the right direction and then suddenly the whole thing has to be reset to zero,” said Shankar.
“Statistically, overall 94% of Indians are aware of the NTO and the choices they have because of the efforts made by the broadcast industry collectively,” said Sudhanshu Vats, Group CEO, Viacom18 Media Pvt. Ltd and Vice President – IBF, adding, “The month on month churn in industry shows that people are continuously fine-tuning their choices.”
Punit Goenka, MD & CEO, Zee Entertainment Enterprises Limited (ZEEL), agrees: “Consumers are also participating in this change with an open mind and… another change of this magnitude will lead to a significant level of inconvenience and disruption.”
Shankar also expressed that this will be a troubled move.
“The long term effect of NTO 2.0 will be highly disruptive. It will affect the quality of content. In the long run, it will eventually force the smaller channels to shut down,” said Shankar.
The industry veterans called out the regulator for making frequent changes to the ecosystem, which has disallowed the sector to settle down, and aim for long term growth.
Pointing towards one of the reasons NTO was put in place, Vats of Viacom18 said: “The other objective of NTO was transparency which it has also brought in. The question therefore, is ‘what is the fundamental need to change again?’ In my opinion there was no need.”
Aroon Purie, Chairman and founder of the India Today Group, said, “The regulator’s job is to facilitate, to enable, to give a fair playing ground for everybody and make sure that everybody adheres to the rules, and to encourage the growth of the industry.” Criticizing the regulator for arbitrary restrictions, changes and conditions, he said, “I must say… that the regulator has in fact not facilitated but is strangulating this industry.”
“They are killing the golden goose which actually lays the eggs, by all the regulations,” Purie added.
“As we have seen, in the last 15 years of regulating the broadcast sector, TRAI has issued more than 36 tariff orders, in an attempt to micro-manage what is arguably the most “value for money” form of news and entertainment in the world,” said Singh, calling it contrary to the Government’s stated position of ensuring the “ease of doing business.”
Shankar of The Walt Disney Company called it a “trigger-happy regulatory intervention”, adding that such moves are never good for the industry.
“The regulator seems to not care that part of its job is to create an enabling framework for the industry to grow and all stakeholders to benefit, and for the consumers to get the best kind and best range of content that they deserve,” said Shankar.
“These amendments attempt to make further disruptive changes in an industry already grappling with the paradigm shift to an MRP based pricing regime,” added Singh of SPNI.