Is the Cable breaking?

As more and more viewers swiftly migrate to digital television or free to air (FTA) service DD FreeDish, cable operators’ cry for survival has got louder, with the uncertainty about the future of lakhs of people employed in the sector being a major concern.

In the last one year, the faceoff between cable operators and broadcasters/OTT platforms has become more intense, leading to several litigations.

The cable operators are crying for help to survive the storm of OTT and hike in channel prices after the implementation of NTO 3.0, with many of them alleging that TRAI tariff regulations are binding only on cable operators leaving them with no freedom to make their own channel bouquets.

exchange4media spoke to industry experts, who said that cable TV is certainly facing an existential crisis with DD FreeDish growing at a faster pace and OTT platforms offering better content.

“Cable TV industry is declining and is struggling for its survival and one of the major reasons is the major price hike of TV channels by the broadcasters in the last 4-5 years. Due to this price hike and forced bundling, consumers have also been robbed of their choices, and they are forced to opt for bouquets, which have non-driver channels also.

“The other reason is that due to TRAI Tariff regulations, which are not applicable on OTT applications and Free Dish, DPOs (Distribution Platform operators) are left with no freedom to make their bouquets and are being forced by the broadcasters to push their bouquets to the consumers, due to penetration clause imbibed in their RIOs,” said a senior industry expert.

Experts also believed that consumers are shifting to OTT applications as they are providing content at any preferable time, while the broadcasters do not allow MSOs to provide such a facility to linear cable TV consumers.

“Content parity has become the biggest hurdle. Broadcasters that are providing all good and varied content on their OTT application to woo customers on the platform, are not providing the same content on linear platforms. The lack of good content on linear TV is forcing customers to opt for other mediums,” said another industry source.

He added that the programming code, which determines the quality of the content, which is applicable on linear TV, does not cover OTT and FreeDish.

Another issue that has troubled cable operators is the need to regulate DD FreeDish. With its unencrypted set-top boxes, DD FreeDish penetration cannot be measured and it promotes piracy as well, said the expert.

“FreeDish is providing its content on an unencrypted platform, whereas all the other mediums are encrypted as per DAS guidelines,” he said.

Indian television industry has multiple screen options, from pay TV which includes cable TV (LCOs and MSOs), DTH and HITS, to free TV or FTA service which is offered only by DD FreeDish in India, and then there is connected TV.

According to the Ministry of Information and Broadcasting (MIB) data, Multiple System Operators (MSO) registrations declined by 43% and stood at 998 at the end of the year 2023. From 1702 registrations in 2020 it has reduced to 998 in 2023.

However, FTA subscriptions have gone up from 40 million in 2020 to 45 million in 2023 and are expected to reach 50 million by 2026.

“This reduction of MSO was on account of non-renewal/ cancellation/ surrender of registration pursuant to directive from TRAI in guidelines circulated in December 2022,” said a report.

The Indian market is serviced by four paid DTH providers and one free DTH provider as of December 2023 viz. Dish TV, Tata Play, Airtel DTH, Sun Direct and DD FreeDish.

As per the data available, DTH subscriptions also saw a consistent decline of 1 million every year from 2020 to 2023. It stood at 56 million in 2020 and 53 million in 2023.

As per TRAI data, cable TV subscriptions fell by 2 million from 64 million in 2022 to 62 million in 2023. From 2020, the cable TV subscriptions fell by 10 million. It was 72 million in 2020. It has been seeing a consistent drop since 2020.

However, industry analyst Karan Taurani said that the cable TV industry may decline mildly every year but it will still co-exist with free TV.

“Cable TV industry will co-exist with FreeDish. If you look at the industry as a whole, out of the total linear TV households we have, still 75-80% is pay TV and only 20% is free TV households. Yes, the free TV household is growing at a faster pace because of people moving to cord-cutting, but the pay TV households will decline in a mild manner at about 3-4% every year but despite this decline, they will continue to have a lion’s share,” he said.

In February this year, a Parliamentary Standing Committee on Communications and Information Technology urged the central government to create a level playing field for all broadcasting services.

In its report, the parliamentary panel observed that the Cable TV industry has been seeing a steady decline and is struggling for its survival, majorly due to the drastic increase in prices of pay TV channels (in some cases as high as 600%) by the Broadcasters in the last 4-5 years.

According to All India Digital Cable Federation (AIDCF), a broadcaster makes a bouquet of channels (which include one or two driver channels and about 7-8 unpopular channels) and demands MSOs and DTH players to sell the same bouquet to a minimum of 90% of the subscriber base without breaking the bouquet.

The parliamentary panel had noted that an MSO does not get the incentive if 90% of subscribers do not subscribe to the bouquet intact, which means a common man pays for 7-8 unwanted channels which include English channels, sports channels (which have important events only 2-3 months in a year).