Digitization Remains The Eternal Mantra

With mobile penetration in excess of 100 percent and traditional Internet and TV subscription services below world average, the Indian digital media market provides a unique opportunity.

The government stays committed on this front. While the Union Budget did not specifically have anything for the broadcasting industry, it reinforced India’s huge shift toward digitization with Rs.10,000-crore allocation for fiber optic laying beyond the already-laid 155,000 km in rural India, thereby enabling digital consumption of video content.

The Ministry of Information and Broadcasting stood its ground and did not grant extension to continue analog signal transmission to Phase-III urban areas beyond January 2017. Instructions were issued to the authorized officers to seize the equipment in cases of non-compliance. However, Arasu Cables in Tamil Nadu continues to transmit analog signals till the Madras High Court takes a decision on the MSO’s registration application.

The Telecom Regulatory Authority of India has recommended that terrestrial transmission, currently the exclusive domain of the public service broadcaster, Doordarshan, be digitized by 2023, and private players brought in to ensure inflow of private capital, plurality in content, and competition in the segment.

Recognizing this trend, video streaming service providers have committed large budgets for creating original content in India. Amazon has allocated a spend of Rs.500 crore; Hotstar, Eros Now, SonyLiv, and Voot Rs.400 crore each; and ALT Rs.50 crore. Netflix is also tying up with production houses and digital content creators. The consumer is completely in sync with this. The tectonic changes in how video is consumed has already made digital media a central part of the TV business.

Moving forward, rollout of GST, promising removal of multiple taxation in cinemas and DTH; Reliance Jio threatening to disrupt DTH services with its launch in April; incumbent Doordarshan, expanding its DTH bouquet from 80 to 104 channels; and cable TV distributors seeking government approval on TRAI’s recommendation for infrastructure sharing to reduce CapEx and OpEx, shall certainly provide requisite impetus to this sector.