TV distributors push for lower payouts amid falling margins

Synopsis

Leading TV distributors like Tata Play and Airtel Digital TV are pushing for lower content fees from broadcasters. Facing subscriber losses and escalating channel prices, these platforms find current deals unsustainable. While some broadcasters are offering discounts, major players with strong channel portfolios are expected to resist demands for a 5-7% reduction, as the pay-TV market continues to shrink.

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Mumbai: Distribution platform operators (DPOs), which include the likes of Tata Play, Airtel Digital TV, and GTPL, are seeking lower payouts in content deals as subscriber losses and rising channel prices squeeze margins, setting up tough negotiations with broadcasters, industry executives familiar with the discussions said.

DPOs, which distribute television content to consumers through cable, direct-to-home (DTH) and headend-in-the-sky (HITS) platforms, argue that existing content deals have become increasingly unsustainable as they continue to make fixed payouts to broadcasters despite a shrinking subscriber base and rising channel prices.

Although the Telecom Regulatory Authority of India’s (TRAI) New Tariff Order bars fixed-fee agreements, industry executives said such arrangements remain common, with some broadcasters offering discounts during ongoing negotiations.

“Most DPOs are seeking discounts from broadcasters since it is becoming unsustainable to deliver annual revenue growth despite subscriber churn and repeated channel price hikes,” said a senior executive at a leading distribution company. “We are seeking discounts of around 5-7%.”

However, executives said broadcasters with larger market shares and stronger channel portfolios are unlikely to concede to DPO demands. JioStar, Zee Entertainment Enterprises, Sun TV Network and Sony Pictures Networks India together account for more than 70% of television viewership in India.

The negotiations come amid a weakening pay-TV market. According to the FICCI-EY Media & Entertainment Report 2026, India’s pay-TV universe shrank by around 11 million households in 2025, pushing subscription revenue down 8% to Rs 35,400 crore. The report expects subscription revenue to decline another 3% to Rs 34,300 crore in 2026.

The talks also follow broadcasters’ decision to raise the prices of several channel bouquets by around 10% in February to offset rising content costs, further straining distributors’ economics.

DPO executives contend that broadcasters have weakened the traditional pay-TV ecosystem by offering the same linear television content at lower prices on streaming platforms.

“Broadcasters are offering the same linear television content for free on digital or bundling it as part of OTT packages at a much lower price than what they charge traditional distribution platforms,” another senior executive said.

“Consumer viewing habits are changing, but broadcasters also contributed by offering linear TV content free to build streaming audiences. By the time they introduced paywalls, viewing habits had already shifted. Some also continue to offer content on ad-supported platforms such as YouTube, further weakening the pay-TV ecosystem,” the executive added.

Executives also blamed limited innovation in television programming and the shift of movie premieres to streaming platforms, arguing that live sports has become the primary reason consumers continue to subscribe to pay TV.

“Live sports has slowed subscriber losses, but even sports viewing is increasingly shifting to connected TVs and mobile devices,” another executive said.

The pressure is already reflected in DPO earnings.

Tata Play’s net loss widened to Rs 551 crore in FY26 as revenue fell 13.5% to Rs 3,530 crore. Bharti Airtel’s Digital TV revenue declined 1% to Rs 3,018 crore, while EBITDA fell 15% to Rs 1,432 crore. GTPL Hathway’s net profit also dropped to Rs 16 crore from Rs 48 crore a year earlier.

Even broadcasters are seeing limited growth from their linear TV businesses. Zee Entertainment said in its Q4 earnings report that subscription revenue grew 4% year-on-year, primarily driven by its digital business.