MUMBAI: If TRAI’s tariff regime for the Indian broadcast and cable sectors did not occupy top mind space of the industry in 2018, the year just gone by could also boast of some other major regulatory exploratory moves that could have deep impact on the sector in the near future; especially those relating to data protection, digital communication policy and online content that, according to some critics, is on a freeway with no checks and balances.
Though many would say that the Indian media sector continues to be a challenging market (a polite euphuism for high level of regulation) offering tantalising opportunities because of sheer numbers on offer, Indian policy-makers have always had to counter such perceptions and, like their peers in many other parts of the globe, have at times found themselves outpaced by technology.
Increasing protectionism aka economic nationalism around the world, led by the likes of US, the UK and China, resonates very well with Indian politicians and policy-makers too. And, such a trend is led more by regulations.
Year 2018 has seen an interesting mix of regulations (some are still in the formative stages) for the Indian media and entertainment sector. Here we try to capture some of the annual highlights.
Telecom Regulatory Authority of India
Broadcast carriage regulator Telecom Regulatory Authority of India (TRAI)’s new tariff regime that had been embroiled in legal tangles hogged the limelight throughout 2018 with judicial directions clearing some hurdles. The last part relating to the 15 per cent discount cap was also dismissed as withdrawn in the Supreme Court.
Issued early 2017, tariff regime aims to do away with bundling of TV channels and offering them on a la carte basis to consumers, apart from other directions like caps on discounts to consumers and distributors of content. The regulation’s main aim was to empower further a consumer who has primarily grown up on a diet comprising free meals. I-should-have-access-to-200-TV-channels-and-best-content-but-will-pay-a-nominal-monthly-fee attitude has over the years definitely spoilt the Indian consumer and part of the blame does lie with the industry that has been subsidising costs in a mad race for numbers.
Now that TRAI wants to break those shackles of the consumer, industry stakeholders also have been pushing back against changes in the status quo. If content aggregators or broadcasters are to be blamed for subsidising costs, distributors, especially LCOs, too should be blamed for refusing to change with time and technology that have now brought them to the precipice where saying no to technological changes and upgradation could only hurl them towards closure. Lack of proper awareness and education of consumer too has created a vote bank of sorts that wants to consume global dishes at Indian rates.
TRAI could be blamed for many things, but certainly not for lack of transparency. One of the most transparent regulators in the country, not only does it hold wide ranging discussions with stakeholders and industry, but has made some good recommendations too. For example, the regulator’s suggestions on ease of doing broadcast business, a new DTH policy and even use of foreign satellites or Open Sky Policy are not only radical but progressive and industry-friendly.
However, many such nuggets are not implemented by nodal ministries like the Ministry of Information and Broadcasting, Department of Telecoms and Department of Space.
In 2019 it is to be seen the stand TRAI takes on issues like proposed changes in audience measurement, OTT platforms (excluding video content) and the fast disappearing boundaries between telecom and traditional media companies as business interests converge.
Ministry of Information and Broadcasting
For MIB the year 2018 has been a roller-coaster ride with a former minister making more news than policies it has framed and rolled back. Whether it was a purported crackdown on social media and online journalists or handing out diktats to Indian TV channels to shift to Indian transponders or face the music or planning a social media hub within the ministry to track Indians’ digital footprints, TV-actress-turned-politician Smriti Irani has been in the limelight too often... till a Cabinet reshuffle saw her relinquish her MIB responsibilities to her junior minister Rajyavardhan Rathore in the first quarter of the year.
Irani waded into controversies because of her largely perceived unpopular move to create a panel in April 2018 to explore regulations for online media/news portals and online content. It did not help her or the government’s cause as this announcement, though being hinted at for several months, came close on the heels of a widely protested move to cancel accreditation of journalists if found peddling fake news, while the government did not define clearly what constituted fake news.
Though the order was rescinded at the behest of the PM’s Office, the move had antagonised not just online journalists, but also social media players (many of whom are backed and funded by government’s sympathisers) and video-on- demand portals. That the responsibilities have been now passed on to Ministry of Electronics and Information Technology (Meity) tells how hot a potato it had been --- and still continues to be with the latter being able to only partially address some of the issues.
It would be an understatement to say that the past two years have been a difficult period for the Indian media and entertainment (M&E) sector what with after-effects of demonetisation of high value currency notes late 2016 and a new tax regime of GST rolled out last year. The story remains the same for ease of doing business in the sector as well.
MIB is still to focus on the recommendations made by TRAI on 'Ease of Doing Business in Broadcasting Sector’ and implement them in letter and spirit. A unilateral decision by the previous leadership of MIB to impose a processing fee of Rs 100,000 per day/channel on temporary live uplinking of events (such as sports) and the same amount for seeking minor amendments (like change in name, logo, etc) is still causing heart burns.
What was the rationale behind such moves to review processing fees? Allegedly non-revision for several years and that such a move could bring in some revenue for the government. But, should a government use licensing/permission fee as means of revenue maximisation? Probably, no.
Towards the end of 2018, a proposal to amend the mandatory sports sharing rules to allow all distributing platforms to re-transmit sports programmes on Doordarshan’s terrestrial network where the rights lie with a private sector TV channel is unlikely to please those broadcasters who have invested billions of dollars in getting premium content for the Indian region. Giving up exclusivity would hurt the business, the sports broadcasters have chorused. It is to be seen how the MIB reacts to criticism of such a proposal.
A revision of the DTH policy too is hanging fire as is an overhaul of the film certification processes as suggested by the Shyam Benegal committee. Interestingly, clearances for new TV channels too slowed down in 2018.
Ministry of Electronics and Information Technology (Meity)
For the Indian M&E sector, Meity gained importance in 2018 as proposals to regulate OTT platforms like WhatsApp, Facebook, YouTube, etc fell in its lap as has the proposal to frame content guidelines for the country’s burgeoning digital sector.
If online video distribution is growing in India, so has the demand for content regulation. Even as Indian policy-makers struggle to understand the business model(s) for digital players, the cry for regulation to suit Indian sensibilities (or lack of it) too has increased. Netflix Indian original Sacred Games is still fighting out a legal case, while informal warnings have gone to other Indian OTT platforms too to tone down edgy programming being streamed.
Bouncing amongst several government organisations (MIB, TRAI and Meity), the issue of online content regulation was a hotly debated topic in India with a large section of the industry pushing for self-regulation like those prevailing for TV content.
If not in 2018, some sort of content regulation for online video will definitely come. With general elections round the corner in Q1 of 2019, Meity has preferred to sit over the issue of online content regulations.
In response to a question asked by Congress Party’s Dr AM Singhvi few days back, the government informed Rajya Sabha or Upper House that it has no proposal to introduce a legislation to codify web media and news portals or to introduce legislation for mandatory registration of web news portals. So, it’s truce for the time being.
Department of Space
Indian Space Research Organisation (ISRO) over the years has done some incredible work, including making the country an important player in the realm of global space industry. But in its zeal it has also ended up with several conflicts of interest --- most importantly being a player and a gatekeeper or a regulator too.
Thus, despite PM Modi’s government claiming it has eased norms for doing business in India, the foreign players in the space sector will always say otherwise. Year 2018 was no change from previous years as DoS and ISRO continued to push for increased reliance on Indian satellites for delivering broadcast and telecoms services while having inadequate capacities to match ballooning domestic demand.
That satellites can play a critical role in deployment of broadband in remote places in India makes it imperative that a collaborative outlook on Indian and foreign satellites is taken. However, a new space policy, drafted in 2018 and likely to be brought in Parliament sometime in 2019, has left most foreign players and investors with an uneasy feeling as early readings suggest restrictive norms.
Department of Telecoms
One of the biggest telecoms market in the world, India’s total subscriber numbers are a shade over 1191.40 million, while the wireless segment clocked a subs base of 1,169.29 million end of September 2018 as per data collated by TRAI. And, this humungous growth in mobile tele density has been fuelled by cheap feature phones and data packages at throwaway prices, though the internet infrastructure continues to be patchy.
And, one of the biggest policy decisions of 2018 has been the formulation of the National Digital Communications Policy (NDCP), 2018 that seeks to unlock the transformative power of digital communications networks to achieve the goal of digital empowerment by attracting investments of about $ 100 million over the next few years.
The NDCP 2018 aims to accomplish the strategic objectives by 2022 of broadband for all, creating four million additional jobs in the digital communications sector, enhancing the contribution of the digital communications sector to 8 per cent of India’s GDP from 6 per cent in 2017 apart from several other aims.
The NDCP will aim to have more synergies amongst various government organisations, stopping just short of creating an over-arching communications regulatory body for broadcast, telecoms and digital realms.
In some ways every new beginning comes with a mix of hope and fear, but India’s telecoms, broadcast, cable and digital sectors do have many upsides to look out for in 2019. That is, if policy-makers do uphold their part of the bargain of easing norms for doing businesses even while empowering the consumer and making the country an investor-friendly destination.
