Television and OTT

India is the second largest subscription television market in the Asia Pacific Region in terms of number of subscribers. India will be amongst few countries to register a double digit growth upto 2020 in terms of television advertising. Though at a saturation level with expected average annual decline in subscription, cable television will continue to dominate the market over satellite television upto 2020. Also, digitization has resulted in tremendous growth in the number of television channels which has now crossed 800. Television penetration in India is currently at 61% which signifies scope for tremendous growth and expansion.

Channel owners, broadcasters, distributors and other media companies around the world have always shown significant interest in the Indian television industry. However, until recently, the limits on foreign direct investment in certain segments limited the interest of such global players. The government has now relaxed these limits and has allowed 100% FDI in all the segments of television industry except uplinking of news and current affairs channels. This coupled with other initiatives of the government like ease of doing business, has brought India on the radar of the global players in the television industry.

India provides a huge opportunity for online video providers. Apart from the traditional Over-the-Top (OTT) players in the market, major broadcasters in the country have also invested in this segment and launched their own OTT platforms. The main hindrance to the OTT market in the country is the average price for cable and satellite subscriptions, which limits subscription revenues for the OTT players.

Television industry in India is regulated by Ministry of Information and Broadcasting and Telecom Regulatory Authority of India (‘TRAI’). Licenses and approval are required to be obtained from Ministries to operationalize a channel to be broadcasted in and from India. Also, the distribution segment is quite fragmented and disorganized with thousands of MSOs and LCOs in the play. Recently, TRAI has amended its regulations to settle the dispute between broadcasters and distributors on revenue collection and sharing for pay-tv channels.

PwC Value proposition

• Undertaking market assessment / feasibility studies and assist in formulating market entry / expansion strategies
• Assist local players in identifying and inducting global strategic investors
• Assist in identifying, screening and profiling acquisition opportunities for inorganic expansion
• Advice on developing tax and regulatory compliant structure
• Formulate a compliance framework to address challenges faced in adhering to complex regulations
• Assist in obtaining regulatory approvals or making representation / seeking clarifications from regulatory authorities