STAR's IPL Strategy Backfires as MSOs Threaten Switching Off Star Channels

VMPL
New Delhi [India], March 14: As broadcasters continue hiking channel prices under the guise of the New Tariff Order (NTO), consumers are finding themselves caught in a financial squeeze, with the affordability of entertainment slipping further out of their reach. Amidst this, Disney Star stands out seizing the opportunity to implement these price increases. By forced bundling its sports content into its portfolio, Disney Star is desperately trying to force its way to implement this price hikes.
Despite losing broadcasting rights of major sports properties, the broadcaster has strategically employed the immensely popular Indian Premier League (IPL) as leverage to enforce higher pricing demands on Multi-System Operators (MSOs). However, recent industry developments suggest that this aggressive manoeuvre will trigger a backlash from MSOs, disrupting Disney Star's plans and potentially undermining its revenue streams.
According to industry sources, major MSOs, in response to Disney Star's opportunistic pricing tactics, are taking proactive measures to counteract the broadcaster's demand. Ahead of the IPL season, MSOs reportedly will be disconnecting Disney Star channels, and Star Sports from their offerings, signalling a stiff resistance to this price increase. The exclusion of Disney Star channels from DPO packages will create uncertainty regarding the viewership and advertising revenue potential on the linear feed of Star Sports channels, particularly during the IPL season.
For Star, which has a reputation for aggressively pursuing revenue maximization, being excluded from DPO packages means potential losses in both viewership and advertising revenue. With MSOs restructuring their channel packages, the absence of Disney Star channels could lead to a decrease in the number of viewers tuning into their content.
When we contacted T Panesar, CEO Hathway, for his comment on this issue Panesar was of the view that this increase in the prices by Disney Star is completely unwarranted and hence the MSO's are being forced to remove Disney Star channels from their new DPO packages.
Another senior industry leader who did not want to be quoted said that the broadcasters greed of unjustified increase in price every year, coupled with forced bundling of channels is further damaging the already shrinking Cable Tv base in the country. He further added that this decline in viewership will directly impact the advertising revenue generated by Star channels, particularly during high-demand events like the IPL season.
Cable TV consumers have already seen the significant price hike (to the tune of 50 per cent to 70 per cent and in some cases more than 100 per cent) in last 4 years, and they are not ready for any further price hike. If channel prices are continued to be increased year after year, it will be severely unfair with customers, as they will be deprived of entertainment, which is an essential part of their life.
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