As we look back at the year gone by, several developments in the media and entertainment industry stand out. Among them, an important event was the Supreme Court ruling on the Star India Pvt. Ltd versus the Telecom Regulatory Authority of India (Trai) case on tariff order. It was also the year when Reliance Industries Ltd (RIL) showed its might as a great disruptor in the entertainment industry by picking up stakes in a clutch of companies. Another key occurrence was the coming of age of the video streaming platforms which vied with one another to grab eyeballs through their slates of original content.

But first let’s look at how the SC ruling is set to change the media landscape. On 30 October, SC paved the way for Trai’s tariff order and interconnect regulations for pricing and packaging of TV channels offered to subscribers. Under the new dispensation, broadcasters have to spell out the price of each channel separately for the consumer. This is likely to have an adverse impact on broadcasters who were pushing some of their smaller channels on the back of the more popular ones by bundling them in a bouquet. The move could affect new channel launches as well as impact revenues of some of the less popular ones.

However, the matter still needs clarity as Trai has filed a special leave petition seeking clarification on the 15% discount cap on channel pricing. According to Jehil Thakkar, partner at management consulting firm Deloitte India, “If SC upholds that discounts cannot be more than 15% of MRP, then channel prices are bound to go up," he says. So the broadcasters may see their revenues dip if consumers pick and choose their channels and abandon the less popular ones. Experts say that if the cost of TV entertainment goes up, consumers may be more inclined towards cord-cutting giving a boost to video streaming platforms.

Private broadcasters could be further stressed by the information and broadcasting ministry’s proposal this year to bring in a law for mandatory sharing of all sports of national importance with public broadcaster Doordarshan (DD) on all platforms—not just on its terrestrial network or its direct-to-home service Free Dish. Essentially it means that private broadcasters who pay millions of dollars to buy sports rights will not be able to keep their telecast exclusive. If implemented, this could destroy the sports ecosystem in the country. “This will lead to a drop in value of sports rights significantly as its scarcity value goes down. If broadcasters buy at a lower cost, team revenues will go down and they will stop investing in players. The long-term ramification will be lower investment in sports per se," says Thakkar.

RIL’s acquisitions in the entertainment space has triggered consolidation in the industry. Earlier this year, the Mukesh Ambani-owned company bought a 5% stake in the NYSE-listed Eros International Plc through a subsidiary (in 2017 it had bought stakes in production houses Balaji Telefilms and Roy Kapur Films). In October, the company said it was acquiring majority stakes in Hathway Cable and Datacom Ltd and Den Networks for 5,230 crore. With these acquisitions Reliance Jio gets access to 24 million cable-connected homes enabling a quick launch for Jio GigaFiber and offering triple-play services. “Reliance is revolutionizing the content business through both horizontal and vertical integrations across the ecosystem on the back of Jio," says Raj Nayak, media industry veteran and chief executive, Colors.

According to Thakkar, Reliance will be a catalyst in driving consolidation as others will seek partners. Zee Entertainment Enterprises Ltd has, for instance, already stated its plan to get a strategic foreign partner for technology. “With the Star-Disney merger playing out soon, the media and entertainment space is clearly moving towards a consolidated industry with 3-4 key players making big strides towards changing the face of the business," says Nayak. In 2018, the OTT video streaming services also saw phenomenal growth. “OTT players are really making a huge mark in the Indian content space with multiple big-ticket properties," says Nayak. A recent Boston Consulting Group (BCG) report said that 82% of the OTT users in the Indian market are currently engaged on advertising-led video-on-demand platforms (AVoD) versus 18% who pay for content on subscription-led (SVoD) services. By 2023, there will be 40-50 million users paying for SVoD content while 600 million will be engaged on AVoD platforms.

Watch out how these developments play out in the New Year.

Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or Just fun stuff.

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