The Telecom Regulatory Authority of India recently published recommendations on a National Broadcasting Policy acknowledging long-standing industry demands, such as granting infrastructure status to the TV broadcasting industry. While these recommendations align with industry views on tactical areas, they fail to address key structural problems like overregulating legacy media and the potential spillover of outdated rules into the much more contemporary online streaming market. Consequently, they will likely fail at both reversing legacy media’s decline and advancing online streaming.
Earlier this year, TRAI sought inputs from stakeholders to formulate a specialised policy framework for broadcasting, a consultation conducted at the behest of the Ministry of Information and Broadcasting. Unlike their cousins in telecommunications, TV and radio broadcasters had never before been beneficiaries of targeted policies. So, the ministry took the initiative to process what came to be known as the National Broadcasting Policy (NBP) in 2019, trailing the first telecom policy by 25 years.
TV and radio industries, also referred to as ‘legacy broadcast media’, need resuscitation before they completely flatline. TV, in particular, never recovered from the Covid-19 pandemic. From 2020 to 2022, paying subscribers fell from 130 million to 120 million. TV subscriptions are expected to diminish further by five million by 2026, according to EY.
The test of TRAI’s recommendations will be their success in addressing legacy broadcast media’s further decline. After all, India is an exceptional market where newspapers are still read, and family TV time is not unknown.
Missing the bigger picture
TRAI’s vision for broadcast rests on the idea of inclusion and indigenisation: it aims to increase regional content and expand its reach to 100 million more households, while boosting localised manufacture of equipment and media tech innovation. However, none of this will be possible if broadcasting remains bottlenecked by price regulation – a relic from the mid-2000s when TRAI entered the scene as a new regulating authority. The authority’s rules around pricing for TV channels were meant to foster competition in an industry with an inadequate distribution infrastructure.
Today, the industry comprising 332 broadcasters offers 903 TV channels, supported by 81,706 cable operators, 1,748 Multi-System Operators, four Direct-to-home operators, one Headend-in-the-Sky operator, and 25 Internet Protocol Television operators that help transmit content to our homes. Despite this competitive landscape, TRAI maintains price caps. As a result, producers lack the incentive to invest in high-quality content. Instead, they focus on frivolous programming to grab eyeballs cheaply, diminishing the potential gains from the industry’s digitalisation a decade ago.
The shift from analogue cable TV to digital addressable systems (DAS) was no mean feat either. Readers may recall when set-top boxes debuted, and they received itemised bills. Back then, TV distributors made significant investments and countered hurdles like the unavailability of DAS equipment. The transition came when stakeholders figured digitisation would pave the way for better economics and returns. Video quality was expected to improve and broadcasters anticipated access to authentic subscription data. Instead, Indians ended up with fiery, noisy news anchors and formulaic saas-bahu soaps.
Ten years on, we see that one in every five individuals notices a decline in service quality. This could be fixed only if TV content were priced like telecom is.
Also read: TRAI’s OTT regulation agenda is confusing. It forgets consumers, serves telco interests
The beaten path
TRAI does get a few things right, particularly in recognising industry demands for ‘infrastructure status’ and by not suggesting such rules on TV or online streaming.
Infrastructure status may facilitate better access to capital for TV distributors to upgrade their last-mile infrastructure. They could use these additional resources to diversify by installing optic fibre cabling or broadband internet and discovering new revenue streams.
The regulator’s recommendations also provide relief to streamers. There is no mention of converged regulation for TV and online streaming, despite calls for TV-style pricing and content regulation on digital markets from several industry factions. The authority has taken the enlightened stance of ignoring such demands.
India has one of the cheapest telecom tariffs in the world. It is because of eminent reforms enabled by many successive telecom policies. The government allowed private players to provide services via the National Telecom Policy 1994 and exercised forbearance on tariffs for mobile services in 2002. Ten years on, the 2012 National Telecom Policy delinked spectrum from licencing, which opened more spectrum for use and gave operators the choice to provide different services—2G, broadcasting, or 3G.
Regulatory restraint on tariff imposition enabled telecom players to differentiate their services based on quality, data speeds, and bundled offerings. The latest National Digital Communications Policy 2018 recognised the need to remove regulatory barriers that hamper investment and innovation.
Not pondering the bigger picture of structural reform in broadcasting may become a missed opportunity. The Ministry of Information and Broadcasting may need to address the havoc caused by excessive economic regulation, despite TRAI’s conspicuous silence on the matter.
Achyutam Bhatnagar is an analyst and Mannat Marwah is an associate at Koan Advisory
Group. Views are personal.
(Edited by Ratan Priya)