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Welcome 2016!

As we usher in the new year, the broadcasting industry has reason to feel good.

Phases III and IV of cable TV digitization are likely to be the best so far for all stakeholders in the industry. Direct-to-home operators are expected to garner Rs. 3300 crore, multi-system operators Rs. 1500 crore, broadcasters Rs. 3900 crore, and the government Rs. 6100 crore in taxes, according to Crisil.

Multi-system operators (MSOs) are likely to get only 45 percent of the incremental digital market in the next two phases of digitization. The balance will go to DTH service providers. This is in sharp contrast to the previous two phases of digitization wherein MSOs had 67 percent of incremental digital market together with local cable operators (LCOs).

DTH’s upper hand in cable-dark and sparsely populated regions will aid its market growth. While incremental revenues will be on similar lines for both, profit share will be significantly more for DTH firms as they have complete access to subscription revenues unlike MSOs, who share a large part of their revenues with LCOs.

The government has some other reasons to be happy too. With the first leg of the third phase of FM radio auctions getting a huge response, the cumulative gain for the public exchequer is pegged at Rs. 5000 crore. The radio industry is expected to nearly double its revenues in the next five years to Rs. 3900 crore from Rs. 2000 crore, with five players, Entertainment Network India, HT Media, Reliance Broadcast Network, Music Broadcast, and Digital Radio dominating the market.

The CII-BCG forecast that the Indian M&E industry has the potential to reach Rs. 650,000 crore by 2025 from the current Rs. 115,000 crore could well be coming true. The consumption explosion of 250 million digital screens projected to multiply to 600 million screens by 2020 is on track.

The government is collecting funds required to provide the enabling infrastructure. Will it rise to the occasion? Will every second Indian really have a personal media consumption device in another five years? That remains to be seen.

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