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MEDIA AND ENTERTAINMENT
Indian media and entertainment industry stood
at US$ 12.91 billion in 2009, up 1.4 percent over
the previous year. The industry is slated to grow
at a compounded annual growth rate (CAGR) of 13
per cent by 2014 according to a report by the
Federation of Indian Chambers of Commerce and
Industry (FICCI) and research firm KPMG.The phenomenal
exponential development witnessed in recent years
in media and entertainment has made these one
of the most rapidly performing sectors in our
economy. The emergence of innumerable TV channels
and private FM radio operators has bridged distances
and taken entertainment and information to every
nook and corners of the country.Government's liberal
economic policy paved way for dynamic local entrepreneurs
to spearhead this boom.
Key Drivers for Entertainment
Industry
- Economic growth of the country in general
and rising disposable income levels in particular
- Gradually liberalising attitude of the Government
- Greater interface with international companies
- Privatisation and growth of the radio industry
- Advancement in technology
- Favourable regulatory initiatives
- Liberalized foreign investment regime
Broadcasting Scenario in
India
Annual growth rate for the television industry
is projected to be 22% and for the radio industry,
the growth rate is projected to be at the rate
of 28% over the next five years.
At present, there are 110 million TV households
in India, out of which 70 million are cable and
satellite homes and rest 40 million are served
by the public broadcaster, i.e. Doordarshan (DD).
Similarly, there are 132 million radio sets in
the country.
Film Industry
Indian film industry stood at US$ 1.96 billion
in 2009.The industry is projected to grow at a
CAGR of 9 per cent and reach US$ 3 billion by
2014. Growth drivers for the sector would include
expansion of multiplex screens resulting in better
realisations, an increase in the number of digital
screens facilitating wider releases, higher cable
and satellite revenues, improving collections
from the overseas markets and ancillary revenue
streams like DTH, digital downloads, etc, which
are expected to emerge in future.
Television Sector in India
Television Industry in India has gained new momentum
due to liberalization and enhanced enthusiasm
shown by the broadcasters to seize a huge share
of the entertainment and media industry. In 2009,
television industry stood at US$ 5.65 billion
registering a growth of 6.8 per cent. The industry
is projected to grow at a CAGR of 15.5 and reach
around US$ 11.45 billion by 2014.
Growth of TV Channels
in India: The number of private satellite
TV channels has grown astronomically over the
years, from 1 TV channel in 2000 to 394 TV channels
in 2009.The number of non-news & current affairs
TV channels has grown from 0 to 183 and that of
news & current affairs TV channels has grown
from 1 to 211.
Foreign Broadcasters:
A number of foreign broadcasters are down
linking their channels into India. A total of
67 TV channels, uplinked from abroad, have been
permitted registration to be down linked in India
during the years 2006-2009.
DTH Service: DD
DIRECT+ is India's first and only FTA Direct-To-Home
(DTH) service being provided by Prasar Bharati
(a public service broadcaster). Apart from Prasar
Bharati, Dish TV India Ltd., Tata Sky Ltd, and
Sun Direct TV Pvt. Ltd., Reliance Big TV Pvt.
Ltd., Bharti Telemedia Ltd and Bharat Business
Channel Ltd have also been granted license for
operating DTH services.
The eligibility conditions provide for total foreign
equity holding, including FDI/ NRI/ OCB/ FII,
in the applicant company not to exceed 49%, and
within the foreign equity, the FDI component not
to exceed 20%. It also provides that applicant
company must have Indian management control with
the majority representatives on the board as well
as the chief executive of the company being a
resident Indian.
Radio Sector
In 2009, Indian radio industry stood at US$ 171.38
million and is expected to grow at a CAGR of 16
% over 2010-14 and reach a size of US$ 360.32
million by 2014.
FM radio: In 2009,
total 248 Channels are operational including the
21 channels operationalised in the phase I. In
the financial year 2008-09 the Government has
earned US$ 10.78 million (approx.) from various
private FM stations.35 FM stations were operationalised
during the year against 53 pending FM stations.
Satellite Radio:
At present Worldspace India Private Ltd, a wholly
owned subsidiary of Worldspace Asia Pvt. Ltd.
Singapore is providing services under Foreign
Investment Promotion Board (FIPB) approval.
Community Radio:
The policy on community radio was liberalized
during the year 2008 to bring in the civil society
and voluntary organizations working on not -for-profit
basis under its ambit. Earlier only educational
institutions were permitted to set up a community
radio. Presently, 29 community radio stations
are operational.
Policy Initiatives
Digitalization of Cable Services: Digital
mode of delivery of content to television viewers
has been given a thrust by introduction of conditional
access system (CAS) in parts of four metros Delhi,
Mumbai, Kolkata and Chennai. The Government is
now engaged assessing the net results of the first
phase of implementation and laying down a path
for their expansion in other areas.
Head-end In The Sky (HITS): To speed up
the process of digitilisation of cable services
located in non-CAS areas of the country, the Government
is in the process of taking a view on the recommendations
of TRAI on the issue of the proposed policy framework
on the Head-end In The Sky (HITS) mode of delivery
of content to the cable operators. This system
will enable the packaging of content in digital
form at the level of HITS operator who will uplink
it to a satellite to be received by the cable
operators and thereafter distributed in digital
mode through cable network.
Internet Protocol Television (IPTV): The
policy on Internet Protocol TV (IPTV) was announced
in the year 2008 by the Government. This opened
up the doors for another mode of distribution
of signals by close to 400 permitted satellite
TV channels through telecom networks. This gives
a new digital visual experience to the Indian
viewer with added value to cater to the ever-persisting
demand of the subscribers for new and interactive
services.
Mobile TV: Mobile TV is another mode of
distribution of TV channels. A joint group of
Ministry of Information & Broadcasting (MIB)
and Department of Telecommunications (DoT) has
considered the regulatory and licensing issues
of mobile TV and held that if mobile TV services
are to be provided in the broadcasting mode using
transmission of terrestrial or satellite broadcast
signals, they will come under the domain of MIB
and will be governed by the applicable laws. If
they are provided by using the infrastructure
of telecom service provider, they will fall in
the domain of Ministry of Communication and Information
Technology (MCIT).
Policy Framework
Foreign Direct Investment (FDI) Policy
The FDI limits in the various segments of entertainment
and media industry are highlighted below:
Advertising and Films:
100% FDI under the automatic route is allowed
in Advertising sector
100% FDI under the automatic route is allowed
in Film Industry including film financing, production,
distribution, exhibition, marketing and associated
activities related to film industry.
Broadcasting:
Terrestrial Broadcasting FM (FM Radio): Foreign
investment, including FDI, Non resident Indians
(NRI) and Person of Indian Origin (PIO) investments
and portfolio investments are permitted up to
20% equity for FM Radio's Broadcasting Services
with prior approval of the Government.
Cable Network:
Foreign investment, including FDI, NRI and PIO
investments and portfolio investments are permitted
up to 49% for Cable Networks under Government
route.
Direct-to-Home: Foreign
investment, including FDI, NRI and PIO investments
and portfolio investments are permitted up to
49% for Direct to Home under Government route.
Within the limit of 49%, FDI will not exceed 20%.
FDI policy in the Up-linking of TV Channels is
as under:
o FDI (including investment by FII) up to 49%
would be permitted under the Government route
for setting up Up-linking HUB/ Teleports;
o FDI up to 100% would be allowed under the Government
route for Up linking a Non-News & Current
Affairs TV Channel;
o FDI (including investment by FII) up to 26%
would be permitted under the Government route
for Up-linking a News & Current Affairs TV
Channel.
Print Media
The regime of foreign investment in Indian entities
publishing newspapers and periodicals is as follows:
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I.Foreign investment (including FDI) upto 74%
in Indian entities publishing scientific/technical
and speciality magazines/periodicals/journals,
where only Indian editions of foreign scientific/technical/speciality
journals etc. are being published with no foreign
investment (including FDI) being made, the Ministry
of Information and Broadcasting will give approvals
on a case by case basis subject to prescribed
conditions.
II.FDI upto 26% in Indian entities publishing
newspapers and periodicals dealing in news and
current affairs with suitable safeguards like
verification of antecedents of foreign investor,
keeping editorial and management control in the
hands of resident Indians and ensuring against
dispersal of Indian equity.
Recent Developments
- During the year 2008-09, 15 proposals for
FDI in Indian entities in the news and current
affairs sector have been approved. Further,
permission has been given for publication of
189 Indian editions of foreign speciality, technical
and scientific magazines. Permission has also
been given for publication of 106 specialties,
technical and scientific magazines by Indian
entities, who have taken FDI.
- As a further measure of policy liberalization,
Government has allowed Indian edition of foreign
news magazines for facilitating wider readership
at affordable prices. Also, Government has recently
announced facsimile edition of international
newspapers.
- Government has reviewed the print advertisement
policy and brought about changes to support
small and medium newspapers. As per the policy,
advertisement support has been increased from
10% to 15% for small newspapers and from 30%
to 35% for medium newspapers, in money terms.
Minimum publication period requirement drastically
reduced from 36 months to 6 months for regional
languages newspapers.
Future Outlook
- Indian Film Industry is one of the world's
largest with more than 1000 movie releases and
over 3 million movie goers annually.
- In 2009, the print media industry stood at
US$ 3.85 billion and showed a moderate growth
of 2 %. The industry is projected to grow at
a CAGR of 9 per cent and reach around US$ 5.90
billion by 2014.
- Number of pay DTH subscribers is estimated
to grow to around 28 million households by 2013.
- India's demographic composition (70% below
35 years) ensures an attractive market for entertainment.
Other Policies
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