DTH majors eye Rs 180 cr as bandwidth fees

Even as a number of new broadcasters demand transparency in carriage fees, also known as bandwidth fees, charged by the various direct-to-home (DTH) operators, companies like Dish TV, Tata Sky and Sun Direct are likely to corner about 12-15 per cent (about Rs 150-180 crore) of the annual carriage fees likely to be generated this year.

Broadcasters pay carriage fees to ensure that the cable or DTH operators position their channel on the prime band — where maximum viewership is available.

However, there are no norms or guidelines laid out by the government or the DTH firms on what is the basis of fixing the carriage fees. Now, some of the new channels like Colors, NDTV Imagine and 9x want popularity of channels based on viewership ratings as a measure for carrying or dropping the channels on the DTH platforms.

“The DTH firms charge us a carriage fee because they say there is a shortage of bandwidth and only the popular channels can be carried. If that is the case then why don’t they drop some of the existing channels that deliver gross rating points of less than 20 each week?” a senior executive of a new entertainment channel asked.

“Carriage fees is a commercial agreement between the broadcaster and the DTH operator. We do not force channels to cough up carriage fees and there are several channels who are not on the DTH platform because they did not wish to pay the fees,” a senior executive working in a new DTH firm said.

However, with the growing popularity of DTH platforms among broadcasters, the DTH firms are charging anywhere between Rs 2 crore and Rs 5 crore per channel annually as carriage fees.

“With new channels getting launched every month, carriage fees will be the new revenue stream for us this fiscal and we expect to rake in about Rs 50-60 crore of revenue from ‘bandwidth fees’ also known as carriage fees,” a senior executive of Dish TV told Business Standard.

Dish TV has already signed agreements with several new channels thereby securing carriage fees to the tune of Rs 27-30 crore so far, sources said. The DTH operator, being a listed firm, will reflect the income from carriage fees on its balance sheet as well.

Other DTH operators Tata Sky or DD Direct Plus (DTH service of public broadcaster) maintain that because of a shortage of bandwidth on the DTH platform, such fees are necessary if new channels want to use their platforms.

With about 40-50 new channels waiting to be launched and more DTH firms likely to start operations (like BIG TV, Bharti Airtel and Videocon), the annual revenue of DTH operators from carriage fees is like to grow fivefold within the next 12 months, sources say.

Last year, DTH operators were able to corner only 2-3 per cent ( Rs 25-30 crore) of the total carriage fees paid by broadcasters.

Overall, the cable platform, which reaches about 80 million homes, generates about Rs 1,200 crore revenues from carriage fees and is expected to grow by only 10-15 per cent as more broadcasters are expected to opt for DTH over cable platform, industry experts say.

Both the government and broadcast regulator Trai have refused to intervene on the carriage fees issue, saying it is a commercial agreement between two private companies.