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Monday, 10 December 2018 12:41

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I&B Ministry proposes to amend the Sports Act, 2007 to include DTH and Cable platforms in mandatory sharing of important sports events on  DD channels, in ontravention of the Supreme Court order of 2017

On 17 October, the Ministry of Information & Broadcasting (MIB) issued a press release seeking comments on Draft Sports Broadcasting Signals (Mandatory Sharing with PrasarBharati) (Amendment) Bill, 2018. The Sports Broadcasting Signals (Mandatory Sharing With PrasarBharati) Act, 2007 (In short Sports Act) was enacted by the Parliament with an objective to provide access to the largest number of listeners and viewers, on a free to air basis, of sporting events of national importance through mandatory sharing of sports broadcasting signals with PrasarBharati, through Doordarshan channels.

The proposed amendment has alarmed private broadcasters like Sony and Star, because if it is accepted, people would be able to soon watch sporting events of national importance on Prasar Bharati’s Doordarshan television network across all terrestrial and direct-to-home (DTH) platforms.

Sports Act: 

 The Section 3(1) of the Sports Act reads as: “No content rights owner or holder and no television or radio broadcasting service provider shall carry a live television broadcast on any cable or Direct-to-Home network or radio commentary broadcast in India of sporting events of national importance, unless it simultaneously shares the live broadcasting signal, without its advertisements, with the PrasarBharati to enable them to re-transmit the same on its terrestrial networks and Direct-to-Home networks in such manner and on such terms and conditions as may be specified”

The Sub-section 8(1) of the Cable Television Networks (Regulation) Act, 1995 provides that: “the Central Government may, by notification in the Official Gazette, specify the names of Doordarshan channels or the channels operated by or on behalf of Parliament, to be mandatorily carried by the cable operators in their cable service and the manner of reception and re-transmission of such channels”.Hence, availability of sports content will benefit a large number of viewers. 

As per provisions of the Sports Act, the live feed received by PrasarBharati from the content rights owners or holders, is only for the purpose of re-transmission of the said signals on Doordarshan’s own Terrestrial and DTH network (DD FreeDish) and not for Cable Operators/other networks. 

Also, a Supreme Court order dated 22 August 2017 bars the private DTH and cable platforms from showcasing DD National channel when it is airing a sporting event of national importance.

Why MIB wants change: 

Hence, the MIB feels that the viewers, who do not have DD FreeDish or Doordarshan’s terrestrial network, are either unable to watch these sporting events of national importance or are compelled to watch these sporting events on highly priced sports channels and thus, the very objective with which the Parliament had enacted the Sports Act, has been defeated. 

Accordingly, with a view to ensure access to the largest number of viewers, on a free to air basis, of sporting events of national importance through mandatory sharing of sports broadcasting signals with PrasarBharati, this Ministry proposes to amend the Section 3(1) of the Sports Act to ensure the mandatory sharing of the signals of the sporting events of national importance, to other networks, where it is mandatory to show Doordarshan Channels as per Cable Television Networks (Regulation) Act, 1995. 

Proposed amendment/new entry: 

In this background, it is proposed by the ministry that the existing entries in the Section 3 (1) of the Sports Broadcasting Signals (Mandatory Sharing with PrasarBharati) Act, 2007, may be substituted, with the following entries: – 

“No content rights owner or holder and no television or radio broadcasting service provider shall carry a live television broadcast on any cable and/or Direct-to-Home network and/or IPTV and/or terrestrial network or radio commentary broadcast in India of sporting events of national importance, unless it simultaneously shares the live broadcasting signal, without its advertisements, with the PrasarBharati to enable them to re-transmit the same on its own terrestrial network and Direct-to-Home network and on other television distribution platforms/networks where it is mandatory to broadcast channels notified by the Union Government under Section 8 of the Cable Television Networks (Regulation) Act, 1995 in such manner and on such terms and conditions as may be specified.”

What else the proposal offers: 

Also, the Act would allow PrasarBharati not to show the logo of the rights holder’s channel and it can also generate its own pre- and post-match programmes. Above all, the Act also mandates that the rights holder to share 25% of its television advertisement or 50% of radio ad revenue with PrasarBharati.

Private broadcasters are not happy:

Major sports rights holders such as Star Sports network and Sony Pictures Sports Network are highly worried as they have to spend tons of money in acquiring rights of sporting events, and media rights of cricket are sold for astronomical figures.

These broadcasters have spent millions on buying rights of sporting events on the basis of revenue potential from advertising and distribution of channels. They feel that sharing of live feed would destroy their revenue prospects and their special ability to demand a premium on ads and channel distribution.

According to Kaushik Moitra, partner at law firm Bharucha & Partners, “The commercial viability of sports is critical for the ecosystem to thrive. While access to events of national interest is a concern, it is unfair to force broadcasters who have paid a hefty licence fee to share their fees at zero revenue potential.” 

On earlier occasions, Star India chairman Uday Shankar had said, “The whole Sports Act was created to make the key Indian sports available to those who could not afford to pay for it. That provision was being misused by pay TV operators by giving FTA (free-to-air) channels to pay TV subscribers, charging money from them and not sharing it with the rights holder.”

Also, no one knows the right definition of a sporting event of national importance. Will it cover all cricket tournaments or only those involving Indian team? The former I&B Minister SmritiIrani had suggested that the Indian Premier League(IPL) should be covered under the Act. 

Private broadcasters to face erosion of revenue: 

Broadcasting analysts with advertising background believe that if the amendments are accepted by the government, rights holders like SPNI and Star may face an erosion of 10-15% on their subscription revenue.

According to Media Partners Asia senior analyst Srivathsan AR, private distribution platforms will have greater leverage in negotiations with sports broadcasters if the proposal is accepted. 

He added, “With the proposed amendment to Sports Broadcasting Signals Act, Star India, which owns majority of key India-based Cricket covered in the act for the next 5 years, will be challenged to gain additional value from DTH and cable operators during contract renewals. We estimate a 10-15% negative impact on the quantum of distribution revenues the broadcaster would have made on status quo.”

OTT may get benefits: 

Industry veterans feel that post the amendments, media rights holders will focus more on OTT platforms than TV, as there will be no government interference on it. Also, the entire revenue chain (advertising spends, etc.) will be adversely impacted. The money will be in short supply. Players will get less money. The mega show events will be things of past. 

Death of Exclusivity: 

Broadcasters are angry with the proposal and doubt the entire agenda in hushed tone, “Who is the government trying to help? DD Sports does not invest a single rupee in sports rights. It wants things for free. That is the basic issue. Amending an act so that DD Sports which has not taken off can make more ad monies is not the right way to go about things,” said an industry insider.

The entire exclusivity will be murdered, according to broadcasters. “If content exclusivity goes for a toss then the business does not make sense.”

Experts in the field think that MIB has failed to bring quality content on its channels which do not make any money, nor has it increased the number of channels on its DD Free Dish to 200 as assured years ago. This has bad to DD losing lead its viewers, both on terrestrial as well as DTH platforms. An amendment to the Sports Act can get more viewers and ad revenue.

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