TV distributors brace for fresh rate hike from broadcasters

Core Viewpoint - Television broadcasters are set to increase bouquet rates by approximately 10% to address rising content costs, amidst a declining pay-TV subscriber base that is straining relationships with distribution platform operators (DPOs) [11][12] Pricing Changes - JioStar has announced revised rates, with regional GEC prices increasing: Asianet and Star Vijay at Rs 30, Star Jalsha at Rs 25, and Nick rising from Rs 7 to Rs 19. Hindi GEC and sports prices remain unchanged at Rs 19, while core Hindi bouquets will increase by Rs 10 [11][12] - Channels priced above Rs 19 cannot be included in bouquets, which may lead DPOs to prefer bouquet options in certain markets [2][11] Market Dynamics - DPOs are expected to resist price hikes, citing that increased costs are driving subscriber losses as viewers shift to cheaper alternatives like DD Free Dish and ad-supported streaming platforms [2][5] - The ongoing tension between broadcasters and distributors has been evident for years, with frequent rate increases contributing to subscriber churn in a contracting market [5][12] Revenue Trends - Subscription revenue growth for leading broadcasters has stagnated as the pay-TV universe contracts, with linear TV average revenue per user at Rs 281 per month [7][12] - According to an EY report, TV distribution revenue fell by 3% to Rs 38,500 crore in 2024, driven by a 6% decline in pay-TV households, equating to a loss of six million subscribers [8][12] Pricing Strategy - Executives indicate that broadcasters have limited options but to adjust pricing, with the effective increase for consumers expected to be in the low single digits due to DPOs absorbing part of the cost through reduced commissions [8][12] - The process of passing on higher prices is delicate for DPOs, as subscriber attrition is influenced by structural changes in consumption behavior rather than solely pricing pressures [9][12] Consumption Behavior - Linear TV remains the most affordable entertainment option and is expected to persist, although content consumption is increasingly shifting to other screens due to new technologies and devices [10][12]