The final days of India’s TV channel aggregators – increasingly effective revenue machines for the county’s largest broadcasters – are nigh.

India’s regulator, overseeing an audacious country-wide migration to digital TV, has issued new rules that will curb the aggregators’ power, removing many advantages that led to their creation in the first place.

Those rules will start to be phased in the second half of the year, after the national elections.

Some independent players may still emerge to cut deals on behalf of broadcasters in a digital world.

The job of securing distribution for many pay-TV channels, however, will likely move back in-house (albeit in a potentially idiosyncratic way).

That will ease the revenue pressure on India’s cable and satellite operators by creating more competition for a place on the dial, while providing breathing space for new channel suppliers to come into the market at the same time.

End of an era

All this signals the end for a perhaps anachronistic aspect of India’s TV industry, designed for a disappearing analog world.

Then, carriage demands on cramped cable systems gave operators the upper hand, prompting rival broadcasters to pool their distribution needs into a handful of jointly owned aggregators, set up to negotiate deals on their behalf.

The latest government intervention is part of a bigger plan to fast-track a new growth-oriented era for Indian TV.

It had become clear that existing structures, largely based on fragmented access via thousands of local cable operators, were ill-equipped to deal with change.

Even competition from deep-pocketed DTH satellite operators, starting with Dish TV in 2003, failed to resolve the distribution shortfall facing content creators and channel suppliers.

This undermined investment, and left consumer needs unmet.

Now, with 90 million cable homes being upgraded to digital platforms, a government-mandated transition that began in late 2012, the balance of power is shifting towards content owners, giving channel aggregators more clout.

Media Pro, the largest representing 76 channels, has been especially successful at filling the coffers for its two backers, Star and Zee.

A recent research note from Media Partners Asia (MPA), publisher of Media Business Asia, highlighted operator complaints that Media Pro has forced channels on them, limiting their ability to increase choice for subscribers with new packages at different price points.

“It’s a gripe that is not unique to India,” the note read. “It does the rounds on every renewal the world over.”

Nonetheless, the issue is especially pertinent for India’s regulator, Trai. A better deal for consumers is one key advantage promised by digital TV, by opening up space for more diverse content and services.

The last deals

The game is far from played out, with aggregators set to continue deal-making for at least the rest of the year.

These entities will invariably wind up before long however, as local broadcast groups reintegrate their distribution capabilities.

International players will have to work out new arrangements or fend for themselves.

India and Japan are the last markets in the world where global majors such as Discovery and Turner still rely on intermediaries for channel distribution. India accounts for 20% of Asia-Pacific revenues for both groups.

MPA analysts wrote: “The big global groups will likely need to invest in their own distribution teams and structures as they bring the affiliate business in-house, and find out the real worth of their brands in the digital pay-TV marketplace.”

This latest, jolting move just made future challenges and opportunities in India much more vivid for everyone.