As Indian streaming services like Hotstar and ALT Balaji look to capture audiences abroad, particularly in the United States, streaming services Eros Now and Gaana have joined American telecom provider T-Mobile’s Binge-On zero-rating program. To refresh, zero-rating is the practice of not charging users for consuming data from a particular website or service. It has been prohibited in India since last year when telecom regulator TRAI banned discriminatory pricing of data.

Karan Bedi, Eros Now’s COO, told MediaNama that there was no commercial deal with T-Mobile, but that “we find it to be an advantage”. None of Eros Now’s Indian-origin competitors are on the Binge-On program. Asked if this was a fair competitive advantage for Eros Now to have, Bedi argued, “This is not something that we have negotiated as a special case with them. It’s a large platform with tens of participants.” He declined to comment on other existing and potential Binge-On participants.

Net neutrality

The problem with zero-rating is that it contributes to fragmenting the Internet into different parts, making Internet providers the gatekeepers of what users watch and browse, which violates net neutrality. This is likely to get worse as the US’s telecom and communications regulator FCC shut down an Obama-era investigation into zero rating programs like Binge-On, and later moved to repeal net neutrality regulations that were introduced in 2015 by the previous FCC chairman.

It also skews the playing field in favour of those apps and services which can afford to either pay to be zero-rated, or are large enough to be approached by ISPs for zero-rating.

The other issue with programs such as Binge-On, is that even if a service which chooses not be a part of it, they will be compelled to join as their competition get an advantage. Remember, YouTube, which had chosen not to be part of Binge-On, eventually had to participate in the program. This was a few months after it criticized T-Mobile for reducing video quality on YouTube to 480p in order to reduce data usage on its networks.

We saw a similar same situation when Times Internet and its affiliate publications said that it would remain on board Free Basics (now defunct in India) as long as their competitors were also there. If one competitor chooses to come on board, there will be little choice but to also follow, else lose out on a potentially large user base.

In India, Airtel Zero, a planned platform to discount data usage on select websites and apps similar to Binge-On, was scrapped last year when TRAI banned charging different prices for different parts of the Internet in its discriminatory pricing prohibition.

Eros Now’s partnerships

Eros Now has multiple partnerships with telecom operators — last quarter, they said they had deals with over 20 telecom operators around the world. In India, they have partnered with Airtel’s Wynk streaming service to offer their catalogue within the Wynk app itself — they have a similar arrangement with Jio. They have also partnered with BSNL to bundle Eros Now subscriptions with data packs. In addition to this, they partnered with proprietary streaming sticks like Amazon’s Fire TV and (the now discontinued) Teewe. Recently, the Eros Now app was bundled into Ola Cabs’ in-cab entertainment service Ola Play. It also partnered with Paytm and other wallet providers for payments.

ReadSome thoughts on T-Mobile zero rating select video services by Nikhil Pahwa