Justice delayed, but not denied

BY CHINTAMANI RAO| IN Media Business | 28/08/2017
Last week the Supreme Court upheld a Delhi High Court verdict barring Doordarshan from sharing with cable operators the live feed of cricket matches for which private broadcasters had the exclusive rights.
CHINTAMANI RAO puts the judgement in context

Printscreen from Mumbai Mirror. 

 

It was over ten years in the making.

In October 2005 the Union Cabinet made it mandatory for broadcasting rights holders of major sporting events to share the signal with Doordarshan, the (so-called) public broadcaster. For the uninitiated, here is how the system works.

An international sporting event – from a cricket series to the Olympics – is telecast in several countries, over a number of different TV channels. It is a large and complex operation. Shooting and producing the telecast of a T20 match, for instance, takes about 30 cameras and a staff of 80. It is obviously neither affordable nor feasible for each of those TV channels to station their cameras and crew in the stadium or, in the case of the Olympics, in several stadiums.

That job is contracted to a single production company which, in turn, contracts with interested broadcasters, typically one in a country. The ‘host broadcaster’ adds commentary, graphics, and other elements, to deliver what you see on your television.

In a market like India multiple broadcasters vie for major events, especially of cricket, so broadcasting rights are awarded as a result of competitive bidding, with each multi-year contract running into anything from hundreds of million to over a billion dollars.

What the broadcaster buys for that kind of money is only the right to telecast the footage live and to use it for a limited period. Neither the production company nor the host broadcaster has the IPR for the actual footage: that vests with the event organiser, for instance BCCI or the IOC. Broadcasters obviously expect to earn back that cost and more from advertising and from subscription revenue from cable operators.

"In a market like India multiple broadcasters vie for major events, especially of cricket, so broadcasting rights are awarded as a result of competitive bidding"

 

The argument for feed sharing was that a large number of people did not have, and could not afford, access to cable and satellite television, so could not watch cricket matches. The whole thing hinged on the idea that these were “events of national importance”, and so it was the duty of the government and the public broadcaster to make it possible for the largest number of people to see them. To that end sports broadcasters were directed to share the signal with Doordarshan, who would reach those audiences.

Interestingly, in that very year, 2005, Doordarshan did on its own have the rights to a cricket series – probably the last time it did – and one day, without any prior intimation, sent bills to news channels for use of match footage in their news bulletins. The broadcasters collectively responded with a simple case. They said that if indeed these matches were events  of national importance it was the public duty of the press to report on them. In the case of broadcasting, that necessitated the use of footage, and the only source of footage was the host broadcaster. If, on the other hand, the matches were not events of national importance, it should not be required for the rights holders to share the signal with Doordarshan.

With that they sat down with a quiet smile and waited to be told which of the two it was. And, oh, while you’re thinking about that, here is something else. The use of footage for reporting is in any case within the definition of ‘fair dealing’ under Section 39 of the Copyright Act, so is perfectly legitimate.  Playing off the backfoot now, Doordarshan and the I&B Ministry prevailed upon the news broadcasters to accept some usage guidelines.

In 2007 Nimbus (owner of Neo Sports) paid $600 million for five-year broadcasting rights for BCCI events in India, and did not see why they should share the feed with Doordarshan. When they went to court, the government immediately promulgated an ordinance and then, with remarkable speed, enacted a law. 

The signal-sharing law (the Sports Broadcasting Signals Act ,2007) required that the rights holder (‘host broadcaster’) not merely permit Doordarshan to retransmit the signal but actually provide it with a ‘clean’ feed – i.e., untreated, without logos, breaks, commentary, etc.

"Doordarshan freely misused its privilege. Given the feed to carry on its free terrestrial and DTH networks, it aired the matches on its cable and satellite channels, too"

 

Doordarshan could then, without acknowledging the host, make the broadcast look like its own: not only put in its own logo but take its own commercial breaks, and sell advertising. In exchange – seemingly fair, in theory – it would pass on to the host broadcaster 75% of revenue earned, keeping 25% for itself.

Part of Nimbus’ case was that Doordarshan did not know how to sell advertising; that if Nimbus were to sell advertising time on Doordarshan too, even their 75% share would be a great deal more, so it was an opportunity loss for them.

Nothing changed. It was only six years later, in 2013, that Star and ESPN impleaded themselves in the case.

Meanwhile Doordarshan freely misused its privilege. Given the feed to carry on its free terrestrial and DTH networks, it aired the matches on its cable and satellite channels, too.Why was that a problem? Because it is mandatory for all cable operators and satellite TV platforms like Tata Sky, et al to carry two Doordarshan channels, free of cost to Doordarshan as well as to subscribers.

This has meant that cable and satellite operators have had access to broadcast of matches through two avenues: one through the host broadcaster, at a cost; and the other through Doordarshan, free. As Uday Shankar, CEO of Star TV, put it, “…the rights holder lost money, DD did not benefit, and consumers were shafted because they were paying for content which was actually free.”

It was against this background that the sports broadasters made their case. They were arguing not against sharing the signal but against Doordarshan’s rampant malpractice. In 2015 the Delhi High Court ruled in their favour, and the government predictably went to the Supreme Court, which has upheld the High Court ruling.

Interestingly, to rule in their favour the court relied not on complex or arcane legal niceties but on what it called “the plain language” of Section 3 of the original law, the Sports Broadcasting Act of 2007, “which makes it clear that the obligation to share [the signal]…is to enable Prasar Bharati to transmit the same on its terrestial and DTH networks.”

So ends another long, tortuous battle. Or does it?

 

Welcome to Season 2

The day before the Supreme Court delivered its verdict in this matter Dish TV wrote to the Competition Commission (CCI). Ahead of the 28th August close of bidding for media rights for the IPL for 2018-22, they asked the CCI to prevent Star from acquiring those rights.

Dish TV pointed out that of 270 cricket matches played and to be played in India from 2012 to 2019 Star has broadcast rights for 191, and that is without the telecast rights for the IPL (which have thus far, from the start, been with Sony). “Once Star acquires the telecast rights for IPL as well, not only will the market share in terms of viewership of Star skyrocket but distribution platforms such as DTH and multi-system operators will have no choice but to subscribe to the Star Sports channel for cricket content,” their letter reportedly said.

The Star TV network is, no doubt, the big boy of the five sports broadcasters in India, and Sony its only real competition. Star’s long-time bitter rival Zee struggled with sports broadcasting for many years and finally pulled out of the genre when they sold Ten Sports to Sony. While Zee is not in it, sports broadcasting is a big money maker for Star and it is in Zee’s strategic interest to choke that line of business. And Dish TV belongs to Zee.

The monopoly power that Dish TV is apprehensive about is the result of open, competitive bidding. Star TV evidently had the resources and the appetite to put big money on the table, take the risk and build a business. Is that not what entrepreneurship is about?

But Dish TV, or Zee, is not alone or unique. Reactions to the Supreme Court ruling have been interesting. Mint cites an unnamed top sports broadcasting executive as saying that the verdict, while fair, “perhaps strengthens the hands of sports channels too much.” Let me guess: he’s not from Star TV. And about Dish TV’s letter, “It is fair to ask regulators to intervene.”

It is the way of Indian business that we like free markets and don't want Government to interfere with business - except to restrict and restrain our competition.

 

ChintamaniRao is a strategic marketing and media consultant  who has managed and built three news channels—Times Now, ET Now and India TV.

 

 

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