International companies with stakes in TV stations in India — including Viacom, News Intl., CBS, Fox, Discovery, Sony and National Geographic — are welcoming the government decision to up the cap on foreign ownership from 49% to 74%.
Friday’s move gives greater access to India’s burgeoning broadcast sector, which is worth $6.6 billion and growing at 17% a year, according to a KPMG report.
And the local biz hopes it will bring in much needed foreign coin to fund the long-delayed switch from analog to digital transmission in India’s 100 million homes by the Nov. 1 deadline.
“You’ve got two major impetuses for the government to do this,” Sunder Aaron, who recently stepped down as exec VP India at Sony Pictures Television, told Variety. “One is the faltering economy and two, the fact that digitization is just around the corner and they can’t keep putting it off.”
Aaron, who has served with the media conglom for the past 10 years, stresses the importance of foreign capital to Indian operators who lack the money to go digital. “For programmers it’s a big sigh of relief because if digitization is moving ahead, it gives us the confidence to launch more channels for these platforms.”
Aaron says Sony is aggressively looking at channel concepts, including special interest niche channels and pay TV webs that don’t rely on advertising. Exec also believes that international players like Liberty Global and Comcast will now enter India.
Tarun Katial, CEO of the Reliance Broadcast Network that runs the Big-CBS bouquet of channels, agrees. “With domestic resources being inadequate to fund digitization, this opens doors to foreigners who have been looking to invest in India.
“For Reliance Broadcast Network it will work positively through an increase in subscription revenue and reduction in carriage fees. All stakeholders, starting with the consumer, distribution platforms, broadcasters, content providers and the government stand to benefit,” Katial added.
The deals for a higher stake in TV companies will be subject to approval by India’s foreign investment promotion board. The 26% cap on international investment in TV news channels and radio stations remains and is also subject to government approval.