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Media & Entertainment

POLICY REVIEW 2020

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FOREWARD

I am pleased to present the Media and Entertainment Policy Review. It comprises diverse

points of view across different industry sectors, this report provides a perspective of the

economy in this sector in India. Through this report, we aim to highlight the upcoming

events and possibilities with the objective of doing business in India.

I hope that this report will help business leaders navigate the increasing complexity

around value delivery in today’s environment. I would like to express my sincere gratitude

to all the participants of the survey.

I hope you find the report useful and insightful.

Best regards,

Priyanka Prajapati

CEO, LawDocs.

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INDEX

Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .5

Reasons to invest. . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Statistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .7

FDI Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 8

Sector Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 9

Strategies adopted. . . . . . . . . . . . . . . . . . . . . . . . . 10

Financial Support. . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Investment Opportunities. . . . . . . . . . . . . . . . . . . . 12

Growth drivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

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SUMMARY

• The Media & Entertainment industry revenues, at a global platform, are expected to

rise from US$ 1.8 tn in 2016 to $2.2 trillion in 2021.

• The Indian film industry grew by 12.2% during 2017-18, with an industry size of US$

2.5 bn

• M&E industry in India reached US$ 23.9 bn by 2017. Industry witnessed a double-

digit growth of approximately 13% in 2016 and 13.4% in 2017. With its recent trajectory, the

M&E industry is expected to grow to US$ 33.6 bn by 2021. India has more than 850 TV chan-

nels.

• India is the 2nd largest television market in the world.

• Household televisions increased to 183 million in 2017* from 181 million in 2016

with 780 million TV viewing individuals

• The Ministry of Information and Broadcasting has officially completed all the four

phases of digitisation, As of March 2017, total of 64.4 million set-top boxes (excluding Tamil

Nadu) were set up in Phase 3 and Phase 4 areas.

• Telecom Regulatory Authority of India (TRAI) plans to introduce a policy for broad-

casting sector with a vision of 2020. This policy aims to usher a innovative era in the broad-

casting industry where MRP of the TV channel will be declared by broadcasters directly to

the consumers, & will bring extra transparency and choices to the consumers.

• Total of 243 FM channels are operational. Under the phase III, the Cabinet has al-

ready given permission to 135 FM channels in 69 cities to operate.

• The Indian film industry in expected to grow at a rate of 10.4 % to become the third

biggest cinema market, after US and China by 2021.

• As of December 2016, registered DTH subscriber base in India stood at approximately

97.05 million, of which, active DTH subscriber base in the country was around 62.65 million.

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REASONS TO INVEST

• The M&E sector is expected to register a CAGR of 12% during 2018-21, to reach

US$ 33.6 bn market size in 2021. TV is expected to retain position as the biggest seg-

ment, whereas, digital is expected to overtake filmed entertainment in 2019 & print by

2021. The number of TV households reached 197 mn in 2018, increasing the Pay-TV pen-

etration to 66%

• India had a total of 118,239 registered publications in March 2018, consisting of

17,573 in the news category and 100,666 in periodicals.

• India has a huge broadcasting and distribution sector, comprising around more

than 800 satellite TV channels. Distribution network consists of 6,000 multi-system oper-

ators, around 60,000 local cable operators, 7 DTH operators and many IPTV service pro-

viders.

• The 5G spectrum band is expected to be finalised in 2019 and launched in 2020-

21.

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STATISTICS

• India has 197 mn television households, close to 3,000 screens in multiplexes, 17,500 newspapers.

It also has approximately 570 mn internet users which is the 2nd biggest base after China and is growing

at a rate of 13% yearly. Multiplexes have been adding around 200-250 screens yearly.

• Overall, the industry is expected to register a CAGR of 12% to reach US$33.6 bn by 2021

• With the online population expected to reach 840 mn by 2022, digital media & online gaming are

projected to have the highest CAGR of 35.4% and 28% respectively.

• Largest industries by market size, within the M&E sector in 2018, include

-Television (US$ 10.6 bn)

-Print (US$4.4 bn)

-Digital media (US$ 2.4 bn).

-Filmed entertainment (US$ 2.5 bn)

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FDI POLICY

BROADCASTING CARRIAGE SERVICES

FDI in teleports, DTH, cable networks, Multi-System Operators, mobile TV, headend-in-the-sky broad-

casting services are allowed up to 100% under the Automatic route. Condition: Infusion of new foreign

investment, beyond 49% in a company not seeking license/ permission from sectoral Ministry, will

need Government approval. For this, infusion must result in the change in the ownership pattern by

existing investor to a new foreign investor.

BROADCASTING CONTENT SERVICES

• FDI in up-linking of ‘News and Current Affairs’ TV channels, is allowed up to 49% under the

Government route.

• FDI in FM radio is allowed up to 49% under the Government route.

• FDI in up-linking of ‘Non-News & recent Affairs’ TV channels/ down-linking of TV channels, is

allowed up to 100% under the Automatic route.

PRINT MEDIA

• 26% FDI under the Government route is allowed in the publication of Indian editions of foreign

magazines dealing with news and recent affairs.

• 26% FDI under the Government route is allowed in the publishing of newspapers and periodi-

cals dealing with news and current affairs.

• 100% FDI under the Government route is allowed in the publication of facsimile editions of for-

eign newspapers

• 100% FDI under the Government route is allowed in publishing/ printing of technical & scien-

tific magazines/specialty journals/ periodicals.

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SECTOR POLICY

• Cable operators under digitization regime, are legally bound to transmit only digital sig-

nals, while customers can access subscribed channels through a set-top box.

• In December 2011, Government of India passed ‘The Cable Television Networks

(Regulation) Amendment Act’ for the digitization of cable television networks by 2014.

• The Government announced 90% subsidy for the North Eastern States & 75% subsidy for

other states in setting up of community radio stations.

• Co-production treaties with a variety of countries such as Italy, Brazil, the UK & Germany

are to raise the export potential of the film industry.

• National Digital Communications Policy (2018) has the following objectives to achieve by

2022:

1. Broadband for all

2. Propelling India to be the top 50 nations in the ICT Development Index of International

Telecommunication Union from 134 in 2017

3. Creating 4 mn additional jobs in the Digital communications industry

4. Enhancing India’s contribution to international value chains

5. Ensuring digital sovereignty

6. Enhancing the contribution of the Digital Communications industry to 8% of India’s GDP

from 6% in 2017

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STRATEGIES ADOPTED

Viewership in regional entertainment

• Regional entertainment is growing & therefore, suppliers are able to expand their

forte in the products.

• South Indian television industry is one of the oldest operational television sectors

across the country and is further growing due to the regional content.

• Zee Television, Star TV have their regional channels both for entertainment and

news.

Television: A common medium

• As television sector is a dominant segment in the entertainment sector even the

film makers promote their films at this platform so as to reach to the mass audiences such

as the reality shows, TV advertisements, etc

• TV programmes being used as a medium of promoting films or other entertainment

events

• Many film producers, actors,so on.have shifted to the television industry so as to

remain in the race and maintain their fan following.

Marketing strategies

• The manufacturing companies like Videocon is offering combo deals such as LED/

LCD sets with Videocon set-up boxes and dish services.

• rising digitisation in the country is helping such companies to further add up to

their revenues.

• The Dish TV is also offering the set up boxes with many additional channels.

Audience: the ultimate consumer

• Audience is the ultimate consumer in this sector & therefore films, advertisements,

music and all the products of entertainment industryis based on the tastes and prefer-

ences of the audiences of the nation

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FINANCIAL SUPPORT

STATE INCENTIVES

• Available with different states depending upon the investment, number of jobs

created, area of investment, so on.

OTHER INCENTIVES

• Ministry of Information & Broadcasting, the Government of India, announced

90% subsidy for the North Eastern States and 75% subsidy for other States in setting up

of community radio stations.

PROVISIONS OF THE 2018-19 UNION BUDGET

• Allocation for Digital India plan was doubled to US$ 439.5 mn. US$ 1.43 bn was

assigned for the creation & augmentation of communication infrastructure.

• Department of Telecom to support the establishment of an indigenous 5G Test

Bed at IIT Madras, Chennai.

• Bharatnet Project aims to connect 100,000 gram-panchayats with high-speed

broadband connectivity.

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INVESTMENT OPPORTUNITIES

TELEVISION

• The TV industry is estimated to hold 40% of the M&E industry by 2021.

• Television advertisement revenue grew 14% in 2018 to reach US$ 4.4 bn.

FILMS

• The size of the Indian film industry is expected to reach US$ 3.37 bn by 2021, up from US$ 2.23 bn

in 2017.

• To promote India as a destination for foreign production houses, Government has set up a single

window system for obtaining approvals & permissions from a variety of Government Authorities.

• The industry is expected to grow with a CAGR of 10.6% for the 2018-21 period.

• To promote joint productions, co-production agreements have been signed with Italy, Germany,

Brazil, New Zealand, UK, France, Poland, Spain, Canada, China and Korea. Agreement with Australia is in

the pipeline.

RADIO

• The Radio industry is expected to grow at a CAGR of 8% over the period 2018-21.

• Phase-III of e-auctions for FM radio licenses will provide an impetus to the segment.

• The size of the Radio industry in India is estimated to reach US$ 557 mn in 2021, up from US$ 414

mn in 2017.

PRINT

• Newspapers and niche magazines are likely to drive sector growth Advertising revenues were US$

3.1 bn in 2018.

• The Print industry has grown from US$ 2.88 bn in 2014 to reach US$ 4.53 bn in 2019 at a CAGR of

approximately 9.5%.

DIGITAL MEDIA

The industry is expected to grow at a CAGR of 28% over the period 2018-

ONLINE GAMING

• The size of the Digital Media industry in India is estimated to reach US$ 5.06 bn by 2021, up from

US$1.7 bn in 2017.

ANIMATION & VFX

• The growth in animation films, especially 3D productions & subsequent impetus for Indian produc-

tion houses will further help growth in this segment.

• The industry is expected to grow at a CAGR of 17.4% during 2018-21.

• The size of the Animation & VFX sector in India is estimated to reach US$ 1.83 bn by 2021, up from

US$ 958 mn in 2017.

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GROWTH DRIVERS

• Television and AGV (Animation, VFX & Gaming ) segments are expected to lead the in-

dustry growth, with opportunities in digital technologies as well.

• Growth in the number and spread of multiplexes.

• Measures such as digitization of cable distribution to enable the viewer’s choice and

higher growth

• Increasing liberalization through FDI and tariff relaxation.

• increasing incomes and evolving lifestyles, leading to higher demand for aspirational

products and services.

• TV penetration in India is around 66% and the market size was estimated at US$ 13.66

bn in 2017. Digital cable (44%), paid DTH (31%) & free DTH (13%) are growing quickly, driven

by content innovation and product offerings.

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FOREIGN INVESTORS

• Walt Disney (USA)

• NBC Universal (USA)

• Sony (Japan)

• Leo Burnett (USA)

• BBC (UK)

• Ogilvy and Mather (USA)

• Bloomberg (USA)

• News Corp (USA)

• Blackstone (USA)

• Interpublic Group (UK)

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N O T E S

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N O T E S

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