Allowing Doordarshan a free ride harms Indian cricket
The UPA government has delivered a blast from the past, exorcised one of Indira Gandhi’s most damaging policies and turned it loose on Indian cricket. Time and again, this government has shown that it neither understands nor respects a principle that is at once the most basic and most sacred—the principle of rights. This time, it has trained its guns on broadcasting rights, ordering that Prasar Bharati (Doordarshan and All India Radio), as the public broadcaster, must have free access to events of ‘national importance’—like cricket matches. Cricket fans (that includes almost everyone) might rejoice at this state-sponsored free lunch. But the joy is unwarranted, because it is bad news for cricket.
The fact that the market value of broadcasting rights has shot through the roof indicates, well, just how valuable they are. Prasar Bharati is either incapable or unwilling to pay the market price, resulting in its viewers not having access to live cricket. The UPA government decided that this is a bad thing and ordered private broadcasters (who paid for the rights) to “share live feed, without advertisements” with the state-owned broadcaster. Thus Prasar Bharati not only gets the live feed free of cost, it can also make money by selling airtime to advertisers. The UPA may call this policy. A more appropriate word for it is robbery. [See BongoPondit’s take]
Apologists of robbery is often justify it on ‘Robin Hood’ grounds—that the act is for the larger social good. But let’s ask why broadcasting rights have become so expensive? Because the broadcasts (and the embedded advertisements) reach a lot more people. Broadcasting rights are unique because those who own them have every incentive to get as many people as possible to watch the cricket. You can’t hoard rights to live broadcasts. And while there is no reason to accept that Indians should have a right to watch cricket matches free of charge, it stands to reason that broadcasters pass on the cost of acquiring those rights to advertisers, with viewers continuing to pay next to nothing. When was the last time someone in India could not watch a cricket match when there was at least one Indian company broadcasting it?
So the UPA’s robbery does not really make cricket more accessible to the public. It just makes it cheaper for advertisers, especially for those advertising on Prasar Bharati. Doordarshan, not having to pay for the cricket, has no incentive to reduce the cost of its own operations. Robbery obviously hurts those who have been robbed, so private broadcasters will be hurt too. But wait—this isn’t all. The private broadcasters pay the cricket board for the rights don’t they? So the next time they bid for rights, they will be unwilling to pay as much as before. Less money for the cricket board means less money for players, training, facilities and equipment—in other words, ultimately, it is bad for Indian cricket.
Legislatively, the UPA has promulgated an ordinance to bring its order into effect. It would be a shame if parliament allows its enactment during its next session. Anil Dharker has a point. Do we really need a ministry to ban some things, expropriate others and that is only when it is not putting its foot in the mouth?
10 thoughts on “Cricket has been nationalised”
Its not just “Dash” Munshi – any incumbent in the I&B harbours the same notions about their ministry’s national importance. The only heartening bit in this specific case, if at all, is that the move is so brazen and outrageous that it can be easily challenged in the Courts. I believe Nimbus and others are planning to slug it out legally. Lets wait and watch.
There is a movie called Groundhog day.
I find it too close to Indian reality
Most of this was done at Prasar Bharti’s bidding. They’ve grown increasingly arrogant with the UPA coming into power. Reminds me of the time when DD was (and still is) a morass of corrupt, incompetent and lazy babus. So while DD spends crores on equipment, it either lies idle in the smaller DD Kendras or is used by staff for their private projects, without paying DD a penny ofcourse. Station Managers relax at home most of the days of the week and get salaries for doing virtually nothing except kissing higher-up behinds.
Prasar Bharti is unwilling to pay the price for the rights. They have no competent marketing setups and the babu attitude will never allow them to. So getting rights by force is the natural way for them to go. Apparently, they’ve complained to the wackos heading the I&B that Nimbus is providing DD with a degraded feed. Which is true ofcourse. The thing is, a Prasar Bharti official actually said that PB and its viewers are being treated like ‘second class citizens’!
Nimbus and its Neo Sports distributor, STAR TV, are not exactly clean either. The usual shady dealings have ensured that STAR provided Neo Sports to only its sister DTH company, TATA Sky while keeping Dish TV out. The ‘legal’ way to do this is to use pricing in such a way that your competitor simply can’t accept the deal. A similar policy was used to good effect by STAR against the Zee backed Siti Cable, leading to a wipeout of Siti Cable from almost the entire country and helping STAR backed Hathway gain.
Being the toothless authority that TRAI is, it can only sit in a corner and watch. The best policy may be to put a complete stop to all exclusive deals for television rights in the country. Every rights seller must sell to two distinct broadcasting entities. With lack of exclusivity, there will be competition in selling the same product in the market among atleast two broadcasters, a win win situation for everyone.
This is something I’ve written about earlier. Here’s a latest take. The worst part is the one on a feed without any ads and a 75-25 rev. sharing agreement. If the extra reach that DD provides was really something valuable, they should have bidded for the rights. That they didn’t do so indicates that reach matters little.
The revenue sharing part would make more sense if Nimbus had been allowed to insert its own ads. Now, Prasar Bharati is free to negotiate advertisement rates on its own, and return 75% of what it makes to Nimbus. If Prasar Bharati turns out to be inefficient in selling its ad spots, Nimbus suffers!
Prasar Bharti is guaranteed to be absolutely incompetent in marketing the matches. But I think it is Nimbus who will be marketing all the advertisements to be shown in the matches. DD will get 25% of the proceeds.
There is something else that will hurt Nimbus. DD channels are telecast over India via satellite for cable operators and local DD Kendras to pick up, convert and relay over the air or via cable. But the Satellite (Insat 3 series) doesn’t just broadcast over India. Its beam can be picked up over several neighbouring countries and the Middle East. So they will also be able to get the feed for free, ignoring pay channels offering the same programmes in their country. And DD refuses to encrypt its feeds to prevent this from happenning!
Apparently it is too difficult to get 1400 decoders into place over the entire country – something private channels can achieve within a week and often do. TATA Sky and Dish TV manage twice that everyday. What a bunch of losers we have at the I&B and DD. No wonder the broadcasting and cable television sector in the country is so screwed up.
The next step maybe is to impose a TV license fee to be payable to Prasar bharathi on the lines of the BBC TV license in the UK ;).
Well, well, is there really anything which can further harm Indian Cricket.
I agree that the government should have been no-balled for what they are doing, but I guess even the third umpire isn’t really watching it these days.
Nitin: Why is no one asking the question that if “broadcasters pass on the cost of acquiring those rights to advertisers”, why should the customer have to pay anything at all? It’s not about the fact that we are paying next to nothing, but because we are paying at all. I am not for a minute, defending Prasar Bharati, but that if everybody (including the government, though that seems too much to ask for) sees sense, we might just have a solution that everyone will be happy (well the broadcasters will be forced to be happy, not neccasarily with less, though) with.
And one more point, I thought the whole thing is for “sporting events of national importance” and not just cricket. I would have to agree that there is little or no chance that this ordinance will ever apply to any other sport.
it is nice
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