Come February, Your Daily Dose of TV Viewing to Cost More

Impact of Television Broadcasters’ Price Hike on Entertainment Industry

Source and Citation: Originally reported in Economic Times by ET Bureau on January 6th, 2024.

Analysis for Layman

Major Indian television broadcast networks, including Zee TV, Sony Pictures, and Viacom18, have announced plans to increase subscription charges for their channel bouquets by 9-25% starting February 2023. This move is intended to offset higher content costs incurred by broadcasters who have invested significantly in acquiring rights for premium sports and entertainment properties.

For consumers, this means a potential increase in their monthly cable/DTH charges, albeit the Telecom Regulatory Authority of India (TRAI) is closely monitoring to ensure strict compliance and prevent any undue burden on customers. The price hikes come after a three-year gap due to regulatory disputes.

Investors should note that this price hike signals improved realizations and profitability outlook for entertainment broadcast majors like Zee and Sony. However, regulatory scrutiny might cap short-term pricing upside. Investors need to assess if broadcasters can compensate higher costs through increased advertising revenues amid slowing consumer demand.

Come February, Your Daily Dose of TV Viewing to Cost More

Impact on Retail Investors

The price hike signals positive momentum for entertainment broadcast majors, leading to improved realizations and profitability. This positive sentiment is already reflected in their stock prices rallying 5-10% over the last week. However, regulatory scrutiny may limit short-term pricing gains.

Prudent investors may explore stocks lower down the TV value chain, such as cable feed providers and local last-mile operators. Companies like Hathway Cable and Den Network present opportunities as they gain from rising TV network payouts but remain immune to content investment pressures.

Impact on Industries

Media & Entertainment

Broadcasters and content creators benefit from improved subscription revenues after a three-year gap. Regulatory hurdles might pose initial challenges, and ad revenue growth becomes crucial to offset margin pressures.


Wired and wireless cable feed suppliers, multi-system operators (MSOs), and local cable operators face the impact of higher payouts to broadcasters. Profitability for players like GTPL Hathway and Den Networks takes a hit unless infra upgrades are pending.


Rising entertainment charges raise the overall cost of living, impacting disposable incomes for grocery and discretionary purchases. Rural demand slackness may persist for consumer goods majors like HUL, ITC, Dabur, etc.


The shift from traditional television viewing to cheaper streaming options benefits OTT and digital content providers like Netflix, Amazon Prime Video, Voot, Zee5, etc. Social commerce also sees positive effects.

Long Term Benefits & Positives

  1. Content Investments
    • Higher realizations allow television networks to sustain significant investments in premium entertainment, including sports rights and original productions.
  2. Production Scaling
    • Broadcasters’ improved content appetite and production pipelines boost India’s media & entertainment ecosystem, benefiting production houses, studios, and creative talent.
  3. Category Expansion
    • The growing cost divide between traditional television and cheaper OTT streaming gradually alters consumer preferences, allowing better segmentation between premium and mass entertainment.
  4. Digital Transition
    • Changes in consumption patterns accelerate digital adoption for next-generation entertainment beyond conventional TV, aiding cost-effective scaling through telco and e-commerce partnerships.
  5. Policy Reforms
    • Pricing interventions by regulator TRAI push broadcasters towards progressive bundling, aligning with global practices to prevent unreasonable burden on rising incomes.

Short Term Benefits & Negatives


  1. Profitability
    • Price hikes directly improve bottom lines across broadcasting majors, buoying investor sentiment after a three-year gap in key subscription revenues.
  2. Margins Resilience
    • Higher subscription revenue allows broadcasters to absorb interim margin compression through operating leverage improvements, even as ad revenues face cyclical pressures.
  3. Capex Stimulus
    • Flush with funds, broadcast networks accelerate investments in production revamps, including augmenting studios, equipment upgrades, and global partnerships.


  1. Regulatory Hurdles
    • Regulatory scrutiny during an election season causes an impasse, delaying swift implementation as broadcasters lobby for justified price hikes, sparking interim stock corrections.
  2. Rural Consumption Risks
    • Rising inflation from higher TV network charges may slow FMCG volumes growth amid slackening farm incomes, impacting price-sensitive rural and lower-income customers.
  3. ARPU Pressures
    • Telecom and media distribution partners lobby against broadcast price hikes to prevent household ARPU gains from getting diluted amid their own margin struggles.

In summary, while the price hike supports the media value chain, a fine balance needs to be achieved on end-consumer impacts through contractual negotiations between stakeholders alongside policy oversight.

Companies Impacted by TV Channel Price Hike

Indian Companies Likely to Gain:

  • Viacom18: Their aggressive price hike (+20-25%) reflects significant sports rights investments (IPL, BCCI, Cricket SA, Olympics 2024). Increased subscription revenue could boost investor confidence and market sentiment.
  • Sports content creators and rights holders: Companies like Dream11, Sony Pictures Sports Network, and Star Sports could benefit from increased demand for sports content driven by Viacom18’s acquisitions.
  • Technology firms providing OTT platforms: Platforms like JioCinema, Sony LIV, and Hotstar might see increased user engagement or subscriptions if some viewers shift from cable TV due to rising costs.

Indian Companies Potentially Impacted:

  • Cable TV operators: Higher channel costs might squeeze their margins and lead to pressure to further increase consumer charges, potentially impacting subscriber growth.
  • Zee Entertainment Enterprises: Their smaller price hike (+9-10%) compared to Viacom18 might raise concerns about their competitiveness in securing key sports rights. Uncertainty over the ICC TV rights deal could further impact sentiment.
  • Disney Star: Losing BCCI rights and facing uncertainty with ICC TV rights could dampen investor sentiment in the short term. However, their strong content library and diversified business model could provide stability.

Global Companies Unlikely to be Significantly Impacted:

  • Major international media companies: They are less exposed to the specific dynamics of the Indian TV market and are unlikely to see a direct impact.

Overall Market Sentiment:

The news is likely to be mixed for the Indian media and entertainment sector. Viacom18’s strategic acquisitions and aggressive pricing could bolster its position, while others like Zee and cable operators might face challenges. Uncertainty surrounding Disney Star’s future strategy could further add volatility. Overall market sentiment will depend on individual companies’ ability to mitigate cost pressures and attract viewers in the evolving landscape.

Disclaimer: This analysis is based on the provided information and is subject to change based on further developments. Market sentiment can be volatile and influenced by various factors beyond the scope of this analysis.

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