Mumbai: The Telecom Regulatory Authority's (Trai) new tariff regime, which came into effect from February 1, could lead to consolidation among the multi-system operators (MSOs) and local cable operators (LCOs) shortly, says a report.
As per the new tariff regime, viewers can pick and choose the channels they wish to watch and pay for only those selected channels, rather than the earlier system of paying for a bundle of channels that were being pushed to viewers at a fixed rate.
The new pricing policy is aimed at bringing in transparency and empowering the audience who were earlier offered packs by DTH and cable operators without much choice.
"Content cost will now be a pass-through for distributors and be borne by broadcasters, which was earlier being shared between broadcasters and distributors in a mutually decided ratio. This could lead to an improvement in margins of distributors which will also lead to consolidation among MSOs and LCOs in the coming months," Care Rating said in a report Tuesday.
The report further noted that distributors, who are already facing pressure due to increasing penetration of OTT players, may start offering heavy discounts to combat competition and sustain, which can benefit subscribers whose bill amount can come down.
The agency also expects content to drive the channel selection and unpopular channels may go off the air if they are unable to generate enough subscriptions and ad revenue.
"Some unpopular channels with low ratings, which were earlier offered in a bundle with other popular channels, will now be at a disadvantage. If they are unable to generate enough subscription and advertising revenue, they could go off the air," the report warned.
