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India can be the Asian hub of entertainment, says Andersen study

The government can earn between Rs 1 billion and Rs 2 billion by giving uplinking facilities to private telecasters and leasing a part of the terrestrial television network in the country.

In what is clearly a boon for the television industry, the expenditure on advertising will go up from Rs 60 billion to Rs 163 billion over the next five years till the end of 2005, according to projections in 'The Indian Entertainment Industry: Strategy and Vision' report.

Prepared by media expert Arthur Andersen for the Federation of Indian Chambers of Commerce and Industry, or FICCI, the report says India can easily emerge as the Asian hub of entertainment with its current potential in infrastructure, hardware and software.

However, the report says the government will have to take certain steps if it wishes to realise revenues from the television industry.

This includes lifting the ban on Ku band for receiving signals above 4,800 mhz (direct-to-home television), privatising or leasing part of its terrestrial network, setting up two or three earth stations and permit uplinking to more Indian and foreign channels, and having a proper system of taxing foreign telecasting companies.

In addition, there is a need to get rid of archaic laws like the Indian Telegraph Act 1885 and to amend the Cable Television Networks (Regulation) Act to over the haste of those who drafted it.

The report forecasts that the revenue from television software industry is expected to go up from Rs 12 billion in 1999 to Rs 90 billion, and the revenue from export of television software is expected to up from Rs 3.50 billion in 1999 to Rs 58.30 billion in 2005. As a result, the revenue to government from tax collections is expected to go up from Rs 650 million last year to Rs 13.69 billion in 2005.

The number of television homes is expected go up from the present 68 million to 86 million by 2000-end and to about 130 million by 2005. In contrast, the number of cable and satellite television homes which number 24 million at present are expected to go up to 46 million by 2000-end and about 80 million by 2005.

Starting with six channels, cable operators offer between 50 to 75 channels. The revenues vary from Rs 25 to Rs 150 per subscriber per month. With digital compression, the number of channels in cable television is expected to go up to 200. Currently, cable operators attract advertisements worth approximately Rs 2.50 billion to Rs 3 billion annually, which if properly exploited could go up to around Rs 12 billion.

Interestingly, the number of cable operators has come down to half from about 60,000 in 1995-96 to just about 30,000 last year, primarily because of the multi-system operators buying out local networks who could not afford the expenditure involved with the increasing number of satellite television channels.

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