TRAI rules, Arasu Cable give satellite business tough times

Many films were bankrolled based on satellite rights as channels used to give hefty advances, which helped producers to start their films. This happy scenario lasted till 2012-13. 

The first jolt came when Telecom Regulatory Authority of India (TRAI) issued notification on March 22, 2013 restricting duration of advertisements in channels to 12 minutes per clock hour against unrestricted or 20-40 minutes advertisement duration per hour. This caused panic among channels as the curb would reduce their advertisement revenues by 30–40 per cent. Consequently, channels postponed buying new films or reduced purchase prices in order to recover their investment. There was no purchase of satellite rights for almost a year.

However TRAI restriction in reality was not implemented by most channels. The Indian Television’s audit report dated May 11, 2015 stated that 140 channels failed to follow the TRAI directive including many Tamil channels. Since TRAI did not take any action on these channels, they continued to air advertisements for longer duration. However, this did not benefit Tamil film producers. The channels continue maintaining TRAI regulation as the reason for restricted buying or reduced price purchases. The one-year pause in buying satellite rights made producers sell rights at whatever price they could get. Many also started selling worldwide exclusive rights for satellite combined with digital rights. The unimplemented TRAI restriction was used by channels to lower the prices and demand more rights than before. 

The second jolt, was Tamil Nadu government’s push to cable through Arasu Cable TV, which toppled the dominance of private operators like Sumangali Cable Vision(SCV). By offering cable connection at Rs 70 per month, Arasu Cable had reached 62.17 lakh connections by September 2013 and as of December 2016, is estimated at one crore connections. Along with this came ‘free for all with no controls’ operations by Arasu Cable franchise operators. Many operators started offering newly released films through cable TV immediately after its release without any fear of action. Hence, viewership for new films started coming down for channels, which forced them to restrict the telecast of new films to only Sundays and continue with TV serials even on Saturdays, reserved earlier for new films. Consequently, the need to own many new films also came down for channels and they became selective in their purchases. Today, a leading top 10 hero’s film, which was bought earlier for Rs 7-9 crore, is now bought for Rs 4.5 to 5 crore, with digital and worldwide rights,  almost 25 to 50 per cent drop in the purchase prices exist. 

The last jolt was in 2015 when some unfortunate incidents took place involving producers with two leading Tamil channels, which further reduced demand for satellite rights as these channels decided to go slow on buying. 

Today there are more than 300 unsold films in Tamil cinema for satellite rights including films like Kabali , Theri, Purampokku Engira  Podhuvudamai a and Yatchan as channels have shown no interest to buy films with high prices or films which were exploited widely and illegally on cable TV. Under this situation, a saviour in the form of Amazon Prime Video has emerged, who started buying Internet rights for reasonable prices. However, they are interested to buy only big artiste or big budget films and have no interest in buying small budget films unless they are most spoken about. The satellite rights continue to earn huge revenues for Hindi films. Tamil cinema can hope to get back to its past glory only if the cable TV piracy is restricted by the film industry. As long as cable TV piracy becomes dominant, the revival of satellite rights value is remote for Tamil cinema.