Transcript Slide 1
A PRESENTATION TO TELECOM DISPUTES SETTLEMENT & APPELLATE TRIBUNAL (TDSAT) Presented by Jawahar Goel President Indian Broadcasting Federation This presentation is the personal view of the speaker and should not be treated as the view of the IBF. 2 INDUSTRY ON A GROWTH PATH The Broadcasting Sector in India is undergoing a process of sweeping changes driven by advent of new distribution technologies such as DTH, Broadband, CAS, HITS, IPTV, etc. A recent report by Price Water Cooper (PWC) has projected : Indian entertainment & media industry is expected to grow at 18% compound annual growth rate (CAGR). Reach a projected size of Rs.1 lac Crore by 2011 from its present size of Rs.43,700 Crores. The Television industry is projected to grow 22% CAGR from Rs.19,100 Crores to Rs.51,900 Crores by 2011. 3 LEAKAGES HAPPENING AT LCO LEVEL Broadcaster 12-15% Broadcaster Distribution Company 2% MSO 4-6% Distribution of Revenues Markets USA UK Australia Japan India Operator 60% 63% 65% 65% 88% Broadcaster 40% 37% 35% 35% 12% LCOs 76 – 80% Leakage Subscriber 100% Source :SSKI Reasearch 4 Broadcaster’s Share Far Below the Global Average Operator (%) Broadcaster 100 90 12 18 28 30 30 35 35 37 40 70 70 65 65 63 60 Malaysia Singapore Australia Japan UK US 80 70 60 50 40 88 82 72 30 20 10 0 India Taiwan Thailand Source :SSKI Research 5 REVENUE LEAKAGE DUE TO UNDER DECLARATION BY CABLE OPERATORS Last mile Cable Operators highly under-declare the subscribers numbers which not only means loss of revenue to Broadcasters, but also to the Government by way of nonpayment of taxes viz Service Tax, Entertainment Tax, Income Tax etc. As per the survey conducted by Centre for Media Studies (CMS) of 9 cable operators in C and D class cities for IBF, in most places, the actual subscriber numbers were found to be many times more than that reported by the local cable operators. 6 CMS SURVEY REPORT OF CABLE OPERATORS SUBSCRIBER BASE Place Dhanbad MSOs* SLR LCOs* Dec Sub Base Actual Sub Nos as per CMS Survey 4550 8225 18000 Ajmer 18000 34650 79010 Akola 15000 30000 38302 Amravati 18000 29000 55800 Bhiwani 5000 8000 25650 Charkhi Dadri 1600 1720 4377 Sirsa 6000 10000 28265 Dharmavaram 6000 9000 21600 Alwar 7500 9250 24468 * From different sources 7 Bulk of cable TV subscription is retained by local cable operators (LCOs) who declare only a fraction of actual number of subscribers to MSOs paying a portion of subscription fees. The distribution of revenue in non-addressable environment is highly skewed in favour of distributor of channels and the broadcaster get only a fraction of only 12-15% of the subscription amount paid by the subscriber. It should be made mandatory for all the cable operators to register with Service Tax authorities and the authorities should launch periodic campaigns to ensure that all last mile cable operators are registered and display their registration certificates prominently so as to ensure the proper realisation of Government revenue. The extent of leakage of service tax revenue in various cities is reflected in subsequent slides. The same holds good for leakage in Entertainment Tax revenue as well. 8 DATA REGARDING LEAKAGE OF SERVICE TAX BECAUSE OF UNDER DECLARATION (Source : NRS & RTI Data) Delhi No. of C&S homes (in Lakhs) Average ARPU (Rs.) Kolkata Bangalore Chennai Hyderabad Jaipur 26.08 20.97 13.93 15.57 11.82 2.25 150.00 125.00 175.00 100.00 150.00 225.00 Total C&S Revenue (Rs. in Crs.) P.A. 469.44 314.55 292.53 186.84 212.76 60.75 Service Tax Payable (Rs. in Crs.) 58.02 38.88 36.16 23.09 26.30 7.51 Service Tax Collected (Rs. in Crs.) 5.57 4.99 3.29 2.69 0.58 1.15 Leakage in Service Tax (Rs. in Crs.) 52.45 33.89 32.87 20.40 25.72 6.36 Means service tax declaration of 6.8% only 9 LEAKAGE OF SERVICE TAX BECAUSE OF UNDER DECLARATION (Source : NRS & RTI Data) Service Tax Payable (Rs. in Crs.) Service Tax Collected (Rs. in Crs.) Leakage in Service Tax (Rs. in Crs.) 60.00 50.00 40.00 30.00 20.00 10.00 0.00 Delhi Kolkata Bangalore Chennai Hyderabad Jaipur Ludhiana Gurgaon 10 CARRIAGE FEE & PIRACY HINDERING THE GROWTH Cable operators demand huge carriage fee from Broadcasters particularly from FTA Channels Nearly Rs. 1400 Crores/p.a. of carriage fee is being paid just in 150 cities cable operators by channels When seeking for carriage fee those MSO,s demand based on lakhs of subscriber base. Viewers are being deprived of favorite channels. News channels are forced to divert their finical resources to pay carriage fee then to deploy in research for meaning full news reporting, leads to low quality of news content Further loss of revenue to broadcasters because of rampant piracy prevalent in cable distribution. 11 SOLUTION The cable distribution should move towards digitalisation & under declaration be treated as piracy 12