Tuesday, June 8, 2010

FreeAds-free India

India may soon have advertisment-free channels on the lines of BBC, ABC and HBO. These may be in the genre of movies, kids and sports.
Ad-free channels are normally present internationally in the digital addressable platforms like the direct-to-home and IPTV. The Telecom Regulatory Authority of India (Trai), which is also the broadcast sector regulator, recently discussed the modalities of launching ad-free channels with the broadcasters and the cable industry.
"Trai is interested in knowing the minds of the broadcasters who have been complaining of the existing tariff-caps hampering the growth of certain genres within the television space," a senior executive of a leading international broadcasting firm said.

Ad-free channels, once launched, will have to depend solely on the subscription revenue, and therefore, will require a regulatory atmosphere without any tariff cap, as currently practiced for paid channels in the country. In the US, ad-free channels like HBO and its variants are very expensive and cost around $80 (around Rs 400 per month), nearly double the average revenue per users for the entire cable industry currently.
According to Trai insiders, the regulator is keen to set up the ad-free genre of television channels as one of the solutions of lifting tariff restrictions if broadcasting firms, including the international media companies, are interested in offering them. In order to launch ad-free channels, Trai will have to introduce them in a separate category with no tariff-cap, which means a HBO or a BBC will be free to price their ad-free channels as they deem fit, experts said. ├»¿½
Currently, there are two categories of television channels├»¿½free-to-air and pay. The pay channels are under strict tariff control as directed by Trai where the pay broadcasters can not price their channels above a certain price-point in the non-addressable analogue cable market determined by Trai. For the digital platforms, the price of pay channels has to be less than half the rates in the analogue cable market or non-CAS homes.

"India is far from being a mature cable or DTH market. Ad-free contents work well in markets that are largely digital and addressable. Even if Trai makes provisions for such a genre of channels, there may not be any takers for it considering the local market dynamics where under declaration and carriage fees are a dominant reality," a top executive of a leading media house told FE requesting anonymity.But several international broadcasters, specially those operating in the niche categories like horror movie channels, or dedicated channels for gardening, farming, cooking, dancing or education are keen, industry sources said.

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