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Tata Sky’s deals with Sony and Network18 fall apart, channels go off air

Tata Sky has ‘unilaterally’ dropped all of Sony Pictures Networks’s TV channels, Sony said in a statement.

  • Tata Sky’s CEO said that under Sony’s terms, prices would go up for customers. Sony said that it had not hiked any of its rates.
  • Tata Sky also said in a newspaper ad last month that its agreement with Network18 and Viacom18 (jointly owned by Reliance Industries and Viacom) couldn’t be renewed, leading to multiple channels going offline.

As one user pointed out, the company did not reveal any plans to refund users who had already paid for access to those channels. Tata Sky’s subscription contract (pdf) gives them this right — “Upon required notice to you, We reserve the right, at any time, without liability to You to […] withdraw Packages or [channels].” The below ad seems to be that ‘required notice’.

Sony said in its statement (in full below) that subscribers are legally entitled to get Sony channels under the TRAI-mandated Reference Interconnect Offer (RIO), which puts a publicly available price on all TV networks’ channels.

This conflict comes as Tata Sky faces a market where millions have gotten greater access to internet video because of falling data prices. The company behind those falling data prices, Jio, itself plans to get in on the DTH television market, jolting the share prices of established players. JioGigaFiber, the proposed service, will bundle gigabit internet with a TV subscription.

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Tata Sky accounts for around a fourth of the DTH market, and paid ₹561 crore in license fees to the government in FY18, which is the legally required 10% of its annual gross revenue.

Aggregator ban

Broadcasters now have to deal with consumer-facing DTH platforms themselves. It wasn’t always this way though — up until 2014, broadcasters came together to form distributor entities that bundled their content and negotiated on their behalf with DTH providers. TRAI changed that in 2014, and put out a regulation ending these arrangements, citing competitive concerns. As we pointed out back then, this is not exactly in the interests of the consumer:

In our opinion, a carriage fee is not in the consumers interest, because their access to content (which they’re paying a DTH or a cable operator for) is not neutral. Broadcasters tried to counter being strong-armed by distributors by forming distribution ventures, to level the playing field.

By taking away their right to form distribution ventures, the TRAI is allowing distribution ventures to manipulate supply once again. Bigger broadcasters might end up paying less carriage fees, and smaller ones might be forced to pay much higher. The broadcast distribution networks are not neutral, and this is a problem that reminds us of the Internet’s net neutrality situation.

Consumers also do not have a choice, in terms of switching service providers: they are locked in after paying significant fees for Set Top Boxes which aren’t inter-operable.

To ensure that the ecosystem operates in a manner that is in consumer interest, the TRAI needs to ban carriage fees, and make interoperable set-top-boxes mandatory.

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Tata Sky’s digital moves

Written By

I cover the digital content ecosystem and telecom for MediaNama.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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