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A Wish List For New I&B Minister Ambika Soni: The CEO’s Agenda

The ministry of information and broadcasting has a new boss in Ambika Soni. For the next five years—a crucial period when the country’s Rs50,000 crore media and entertainment industry is poised to take a quantum leap—Soni will be at the helm of critical policy decision making that can make or mar the prospects of a sector that has enjoyed spectacular growth in the post-liberalization era.

We asked several prominent industry CEOs to make a wishlist for the new minister—a five-point agenda that they think are critical to their sector, businesses, and the wholesome growth of Indian media. Here is the CEO’s agenda, in no particular order. Feel free to add your own wish list in the comments field.

Broadcasting:

imageJawahar Goel, managing director, Dish TV India Ltd:

  • Multiple taxation in the broadcasting industry should be done away with. Currently, there is service tax, entertainment tax, value added tax, fringe benefit tax and more. In DTH, the effective tax rate is 45%. As a result of this, in this country, only may be ten channels are profitable on a standalone basis. Print has no service tax component and gets other waivers. The government should encourage the growth of the industry that is suffocating from multiple taxation.
  • The content code should be notified. The film industry has been producing films with adults only certification for decades but there is no digital outlet for these films now. When we have mechanism like parental locks, there is no reason why these films should not be distributed digitally. There are provisions for this in the content code and it has been awaiting notification for a long time now.
  • Pay channel pricing has been frozen for five years now. It was frozen when the conditional access system was being implemented and at that time the Telecom Regulatory Authority of India said it was a temporary arrangement. For five years now, it has remained a temporary arrangement.
  • The ministry needs to streamline its own operations. The Foreign Investment Promotion Board is a good example to follow. So many applications for down-linking permissions are pending with the ministry and there is no clarity on the timeframe within which permission will be given or denied. If the ministry’s operations are streamlined, channels will be able to plan their business well.
  • In the analog cable domain, which reaches most of India, there is capacity only for 60 channels. There are already 400 channels with down-linking licenses. Now the government should only give permission for downlinking on digital platforms such as DTH, IPTV and digital cable. This will give a greater impetus to digitization.


imageK.V.L Narayan Rao, Group CEO, NDTV Ltd:

  • Government should give high priority and impetus to digitalization, especially roll-out of CAS (conditional access system) to make the television distribution system and consumer choices more transparent. The current combination of monopolies and analog capacity constraints makes India’s cable network a bottleneck. As monopolies break down, multiple channel distribution becomes possible, selection of specific channels becomes a reality and the customer has greater choice. Also, fixed pricing on CAS has to be done away with. It prevents broadcasters and content producers from delivering quality and premium programming.
  • Government should let the industry bodies like IBF (Indian Broadcasters Foundation) and NBA (News Broadcasters Association) regulate and guide content codes. These cannot be imposed on TV channels. The proposed Broadcasting Bill 2006 has clauses, which are looked upon by the industry as restrictive and curbing freedom of the press. The draft bill allows for government to take over the functioning of any private channel in event of war and natural calamity. If this provision is misused by the government, it could be extremely detrimental for private news channels.
  • The Broadcasting Services Regulation Bill, 2006, also provides for punishment like revocation of license and fines on those who violate the proposed broadcast guidelines, including the new Content Code under preparation. It provides for the setting up of a Broadcasting Regulatory Authority of India (BRAI), which analysts say lacks independence and will be constituted from within government civil servants of Additional Secretary level and above. The industry has already petitioned to the government for a review of the bill.


imageChintamani Rao, CEO, Times Global Broadcasting Ltd:

  • The overarching consideration is for the Ministry to play a role mainly of support and facilitation, not of control. To that end…
  • Engage with broadcasters in ongoing dialogue to build appreciation of their perspectives and issues.
  • Encourage and support self-regulation of content.
  • Represent the cause of broadcasters to other ministries and departments to help ensure fair and equal treatment to broadcasters. For instance, a) in the matter of taxes and duties, on which broadcasters have been making representations for years in vain; b) simplification of procedures for all manner of routine approvals; and c) timely payment of advertisement dues.
  • Regulatory framework to ensure that the in the value chain that extends from broadcasters to viewers/consumers the biggest beneficiaries are consumers, not the distributors in the middle. This includes implementation of Conditional Access; where CAS is implemented, proper subscriber management systems; subscription and channel pricing; revenue share; carriage fees, etc.
  • Re-orient Doordarshan to be a true Public Broadcaster, not a government-owned broadcaster that competes with the private sector for revenue but with unfair regulatory and other advantages.



imageBarun Das, CEO, Zee News Ltd:

  • MIB (ministry of information and broadcasting) should ensure that broadcasters are treated at a level playing field with print companies in issues such as service tax, DAVP (department of advertising and visual publicity) advertising etc.
  • MIB should play the role of a facilitator in broadcast and information dissemination matters with structured systems and processes in place.
  • The ministry must continue to support news media to evolve its own codes of content and conduct.
  • There should be more robust regulations on entry and presence in to the universe of news broadcasting.
  • The ministry should undertake initiatives that foster free press in the world’s largest democracy.



Print:

imageN. Murali, joint managing director, Kasturi & Sons Ltd (The Hindu)

  • The ad rates paid by DAVP are now only a fraction of normal rates. There is no justification for this. Government should pay normal rates minus a reasonable discount that is applicable to a large advertiser. DAVP rates have a cascading effect. Apart from the central government, state governments ask for the same rates, and so also the public sector companies, other autonomous bodies etc.
  • Import duty on newsprint has been abolished now. I hope it stays the same way. India is not self sufficient in terms of newsprint and import is done only by the actual user. So there is no reason why there should be an import duty.
  • Newspapers should be exempt from the fringe benefit tax. The govt has exempted the IT sector from FBT (NYSE: BT). There are several overheads that are actually business expenses. Travel for instance, is a big cost for a newspaper company. Journalists need to traval, and that is in the course of their work. It is not a fringe benefit. It’s a notional and presumptive tax.
  • The government must reduce the import duty on printing equipment and consumables used by the newspaper industry. On some of these items, a very high duty is levied.
  • The industry is currently governed by the very old and archaic Press and Registration of Books Act, 1867. It needs to be simplified and modernized. There are several archaic provisions and it also results in titles being registered by just about anyone, etc.



imageAshish Bagga, CEO, Living Media India Ltd (The India Today Group):

  • Following are some specific issues that I would like to raise in addition to regular Industry issues relating to FBT, interference/ strictures on cross media holding and on opinion/exit polls, allowing news on radio, increasing FDI in news to 49%, etc.
  • Radio & TV broadcasting firms should be treated as industrial company which allows B/F losses to be carried forward & adjusted in the event of a merger in the merged entity. At present both Radio /TV cannot avail the benefit. With consolidation likely in these segments, we should be on the same footing as software companies, which, a few years ago were treated as an industrial company for Income tax purposes.
  • Norms for government advertising should not favour large and established players. The minimum time period for new publications to qualify for government advertising should be lowered and more flexible qualification norms should be implemented.



imageMaheshwar Peri, president and publisher, Outlook:

  • Ensure that there is minimal interference from the government into free media and regulations to control media. The present government came back to power because media was free.
  • Ensure that the regulation on facsimile editions is removed, at least for magazines, as they became redundant after the new regulations about Indian editions of international news magazines.
  • Work on the legal provisions that enable healthy growth of the media industry without listening to captive lobbies.
  • Develop a media city. Indian companies shouldn’t have to go to Dubai for these matters.
  • Let there be some transparency in giving out national honors to journalists and editors. It smacks of favoritism.



Radio:

imageS. Keerthivasan, business head, HT Radio (Fever 104 FM):

  • Foreign Direct Investment cap should be raised to 74% from the low level of 20% currently. The industry needs investment and there is no justification for the low level of FDI currently allowed.
  • The government should allow consolidation in the industry. The restriction that radio licenses cannot be transferred for five years must be done away with. At least one more frequency should be allowed per operator per city. This will enable differentiation of content on radio.
  • News and current affairs should be allowed on radio. This is critical for a vibrant media and the growth and relevance of radio as a medium of mass communication. The full potential of radio will be unleashed only when news is allowed.
  • Prasar Bharti should reduce infrastructure rents. BECIL (Broadcast Engineering Consultants India Ltd), which has been mandated to build common infrastructure by the government, has done a shoddy job after collecting a good amount of money from all radio stations. More accountability should be brought into these matters. 
  • We need a resolution and clear guidelines on the music royalty issue. Currently we are paying royalty to the Indian Performing Right Society Ltd and the Phonographic Performance Ltd (one is an association of music labels and the other, that of artists). Music companies are taking advantage of the lack of clarity and are armtwisting radio companies. Royalty rates should also be in line with revenue potential.
  • The government currently levies 4% of gross annual revenues as license fee. This is hefty for an industry that is at an infancy and is bleeding currently. This should be waived off at least for a few years till the industry reaches maturity and gains strength as a media platform. AM should be opened up for private players. This will vastly improve reach and quality of broadcasting and help create truly national players in the radio industry.
  • DAVP rates should be brought in line with commercial ad rates. The government charges us commercial rates for infrastructure. We pay huge amount of license fee, bidding prices were decided by market forces and we get no subsidy whatsoever from the government. So I don’t see why the government should get special ad rates from the industry.
May 28, 2009 9:18 AM ET
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  • Interesting point of views from different respectable people in Media industry.  Hopefully, their insights will have a positive result someday.

  • For the benefit of our readers, Ashok Mansukhani, the commentor above, is the chairman of the MSO alliance, a body of multi system operators (the big cable guys) and a tireless advocate for that industry.

  • Thanks for your inputs Ashok, you raise an important issue. I don't see an easy reconciliation between content creators and distributors so long as both sides are fighting for more of the same pie. Ideally, the two should be working together to increase the size of the pie, and be willing to make short term sacrifices for it, but well, easier said than done.

  • ashok mansukhani

    Interesting views. Somewhat predictable.Focused entirely on content creators.The distribution sector has very different agendas for Government and Trai. Suffice to say they are not middlemen but the information infrastructure highway on which the entire content gravy train travels.We look for a level playing field to be incentivised for digital growth.Yes we want CAS but over a specified period of time say a staggered rollout.Most important is that the customer rupee needs to be equitably shared and customer kept enabled to pick and choose bouquets and packages of his choice.On content regulation we need it but self regulation will not work as long as TRPs rule.All service provider alliances like IBF/MSO Alliance/COFI etc need to talk out common points of agreement and talk Trai into a light feather touch regulation mode.Will it happen? Someday I hope.

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