Discovery Communications opposes equal treatment to all cable/DTH players

Discovery Communications, the country’s most popular provider of reality-based television programming, has come out strongly against TRAI’s current rule that requires channel owners to treat all cable and DTH operators equally.

Media regulator TRAI had earlier this year implemented Tariff Order of 2017, under which broadcasters like Discovery, Zee and Star have to offer channels on a non-discriminatory basis to all cable and DTH operators, big or small.

For example, if Discovery Channel is offered at Rs 5 per subscriber to Tata Sky, then it has to be offered at the same rate to a small cable operator in Odisha.

The law was brought in to smoothen the process of signing distribution deals and avoid needless disputes, litigation, blockades and delays. The clause ensured input-price parity for all players, big or small.

Before the law was introduced, big DTH and cable operators often got channels at a fraction of the price paid by smaller cable operators.

This was because big cable and DTH operators often forced broadcasters like Sony, Zee and Star to supply channels at a low price by threatening them with disconnection.

Broadcasters who did not agree to demands for discounts often found their channels unavailable on major DTH and cable platforms, impacting their ad revenue.

Under the new rules introduced in February, bigger cable/DTH operators can no longer demand any discount on the prices announced by players like Discovery.

On the flip side, Discovery too can no longer demand one price from big players and another from a smaller cable operator.

Most broadcasters have welcomed the provision in the new rules, as it has removed the friction between broadcasters and distributors, and also protects broadcasters from being blocked by large platforms like Tata Sky, Dish TV, Airtel and Hathway over pricing.

Smaller cable operators have also welcomed the non-discrimination rule, as they can now get channels at the same price as bigger operators, helping them compete on a more equal footing.

However, Discovery Channel has now come out strongly against this rule, saying the uniform pricing rule is hurting its revenue. It urged TRAI to allow broadcasters like itself to charge different prices from different players.

“The Regulations constrains broadcasters to treat all DPOs — irrespective of their size, target market, active subscription base, technology, and platform — equally, which consequently adversely impacts the ability of the broadcaster to organize and carry out their business operations in a viable manner, and not to mention that it has a huge impact on the revenue of broadcasters,” it said in its response to TRAI.

Discovery also alleged that not allowing channels to charge different prices from different cable and DTH providers has disrupted the level playing field that existed among cable and DTH operators before the new TRAI rules.

“Such mandatory requirement of broadcasters to provide equal treatment to unequally & differently placed DPOs, is manifestly arbitrary, iniquitous, and discriminatory in respect of the broadcasters and distorts the level playing field amongst service providers,” it said.

Discovery Communications also asked TRAI to frame rules to force cable and DTH operators to increase their carrying capacity.

At present, said the company, many channels are not carried by many cable and DTH operators (DPOs) due to a lack of capacity, or feasibility. Given the restricted capacity, it pointed out, many platforms only carry the most popular channels, and leave less popular channels out.

“The DPO’s network and offering is not necessarily dependent on consumer choice – it is dependent on its investment appetite and motive of revenue maximization.”