India Poised for a Boom in Media Industry

Media and entertainment has emerged as one of the fastest growing sectors of Indian economy. In the last few years there has been an exponential growth in the number of television channels and also private FM radio operators. These are providing quality entertainment and information across the country. In this globalised world, the emerging technologies are allowing a much faster and a universal access of information across the world. Anand Sharma, Minister of State for Information and Broadcasting while addressing Economic Editors Conference in New Delhi on Wednesday said.

“The entertainment and media industry has demonstrated tremendous dynamism in the recent years. In the last financial year it witnessed a growth of 17% and the television industry is expected to grow annually at around 22% and the radio industry is set to grow at 200% over the next 5 years. The entertainment and media industry reached an estimated size of Rs.513 billion and has grown cumulatively at 19% in the last 4 years. The advertising industry has recorded a growth of 22% last year and online advertising has grown by nearly 70% in a single year. The entertainment portion of animation, gaming and VFX industry grew by 24% and it now stands at nearly Rs.15 billion. Print media recorded a growth of 16% over the previous year and has now reached a level of nearly Rs. 150 billion,” Anand Sharma said.

The boom in the broadcasting industry , the Minister said ,is reflective of the dynamism of Indian entrepreneurs and a liberal economic policy pursued by this Government. While allowing foreign investment in this sector we have been mindful of the sensitivities involved, especially in the news segment and have endeavored to strike a balance between the need for foreign investment and technologies and adopting a cautious approach on content.

“The FM radio industry has witnessed unprecedented growth. The Indian radio industry was revolutionalised by the introduction of the Phase-II of FM radio policy in 2005. This year, we are in the process of finalization of Phase-III of this policy which shall expand FM radio services to 275 cities across the world. This policy will follow an even more liberal dispensation than before and would promote healthy competition to benefit the masses. We are proposing foreign direct investment upto 49% for non-news channels and upto 26% for news channels. Special incentives would be provided for expansion of coverage to the North Eastern States, Jammu & Kashmir and the island territories. We are awaiting the comments from TRAI after which approval of the Cabinet shall be sought,” Anand Sharma said.

The Government , Anand Sharma said, took a pioneering step to liberalize the community radio policy which was very well received by the civil society organizations and it has served as a powerful tool for rural empowerment and dissemination of information. There are 38 operational community radio stations and another 107 have been given letters of intent by the Ministry.

“In the TV broadcast segment, DTH services are well established now and five private operators are already operational and another two are in the pipeline. The DTH industry is expected to grow annually at the rate of 48% over the next five years. We are committed to promoting digitalization of TV services and in this context, we are currently working on new policy initiatives for introduction of services like mobile TV, Headend in the Sky (HITS). The Pay TV homes are projected to increase from 74 million in 2007 to 115 million in 2012. DTH homes are projected to increase from 4 million in 2007 to 25 million in this period,” the Minister said.

In the last few years, the entertainment and media sector has witnessed a rapid convergence of information, entertainment and communication and devices such as computer screen, mobile phones and televisions for providing service interchangeably. This interchangeability of devices and the convergence of information, communication and entertainment – the “ICE revolution”, poses an unprecedented regulatory challenge for the Government as the regulatory regimes have to keep pace with technological innovation.

Anand Sharma said that the Government has declared policy of Internet Protocol Television (IPTV) and this is bound to provide viewers with a new visual digital experience with a number of valued added interactive services providing newer modes of infotainment and E-commerce. IPTV policy mandates adherence to the same programme and advertisement codes as prescribed for the broadcasting sector and ensuring strict compliance with copyright provisions. An exponential growth in demand is projected for IPTV which will further lead to an augmented demand for broadband connectivity.

He said that there is one area which deserves special attention – the quality of content in electronic media. We are concerned about the issue of content. The Supreme Court has made serious observations on this issue and we feel that there is a strong and urgent need of content regulation of some kind. We are seized of this matter and are trying to find a solution which strikes a balance between freedom of creative expression and the need of content regulation. It is our endeavor to build a consensus of this issue.

The reform in the Cable laws and the digitalization of cable services is another area, which the government is seeking to address. TRAI has recently made its recommendations available on the restructuring of cable services. The regulatory framework needs to be modified and cable industry incentivized to modernize cable services to be able to compete effectively with new service providers.

“In the Print Media policy, we have outlined several initiatives to meet the current challenges. A booming Indian economy, growing need for content and Government initiatives that have opened up the sector to foreign investment are driving growth in the print media. With the literate population on the rise, more people in rural and urban areas are reading newspapers and magazines today. Also, there is more interest in India amongst the global investor community. This leads to a demand for more content from India. Foreign media is evincing a keen interest in investing in Indian publications. On the request of the newspaper industry due to the increase of newsprint costs and other inputs, the Government has increased the DAVP advertisement rates by a quarter. Liberalization of our Print Media policy has not only resulted in attracting foreign scientific and technical magazines in our country,” Anand Sharma said.

Till date, 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. Availability of Indian editions of foreign scientific, technical and specialty periodicals at an affordable cost has benefited the students, professionals and the scientific and technical community greatly.

Anand Sharma said that as a further measure of policy liberalization, we have allowed Indian edition of foreign news magazines for facilitating wider readership at affordable prices. Also, we have recently announced facsimile edition of international news papers to be brought to be India. At the same time, we have been mindful of the sensitivities involved in the news segment and have not allowed local content to be added by foreign publications.

“We have reviewed the print advertisement policy last year and brought about changes to support small and medium newspapers. As per that 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 in Bodo, Dogri, Garhwali, Khasi, Kashmiri, Konkani, Maithili, Manipuri, Mizo, Nepali, Rajasthani, Sanskrit, Santhali, Sindhi, Urdu and Tribal Languages. Similar concession extended to all newspapers in all languages published from backward, remote hilly and border areas and in J&K, Andaman Nicobar and the eight North Eastern states,” Anand Sharma said.

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