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Presented byA. Mohan

Executive Vice PresidentZee Network, India

[email protected]

Information Meeting on Developments in Broadcasting

Standing Committee on Copyright And Related RightsEighteenth Session

Geneva, May 25 to 29, 2009

This presentation depicts the personal views of the speaker and should not be treated as the views of the

Company.

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Overview of Indian Broadcasting Scenario

Indian Broadcasting Industry - largest in Asia.

>300 channels of different genres viz.

entertainment, movies, news & current

affairs, sports, music, religious, infotainment

are available over Indian Sky.

Channels in different languages are also

available to cater to the requirements of

regional viewers viz. Tamil, Telgu, Marathi,

Punjabi, etc.

In Radio segment besides All India Radio (AIR),

city specific licenses have been given for FM

Radio channels e.g. Red FM, Radio Mirchi, Big

FM, Radio City, etc. 3

Structure of Television Broadcasting Industry

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Overview of Indian Broadcasting Scenario

Over 16 Major Teleports ( Uplink and DTH) 150+ channels uplinked out of India.

M&E Industry (US$ Billion)

2008 2013 P CAGR %(2009-13)

TV 5.01 9.85 14.5%Print 3.60 5.54 9.0%Film 2.28 3.51 9.1%Radio 0.18 0.34 14.2%Music 0.15 0.22 8.0%Animation 0.36 0.82 17.8%Gaming 0.14 0.57 33.3%Internet Ad. 0.13 0.45 27.9%Outdoor 0.34 0.61 12.8%Total Size 12.17 21.92 12.5%

Sources: Group M, KPMG Interviews, KPMG Analysis

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Sources: Group M, KPMG Interviews, KPMG Analysis

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Sources: Group M, KPMG Interviews, KPMG Analysis7

TV Industry(US$ bn)

2008 E 2013 P CAGR(2009-13)

Subs.Revenues

3.29 6.61 14.9%

Ad.Revenues

1.72 3.24 13.5%

Total IndustrySize

5.01 9.85 14.5%

Terrestrial – under exclusive domain of Parsar Bharti - Public broadcaster Doordarshan beaming about 28 no. of channels started transmission in 1959.

BROADCASTING

Satellite – Free To Air Channels – source of revenue -

advertisements Pay Channels (subscription based) e.g. Zee

TV, Star, Sony, ESPN, CN, etc. – source of revenue – subscriptions & advertisements

In analogue mode pay channels are encrypted upto MSO/LCO and thereafter delivered to subscriber in FTA mode through a single pipe.

In digital delivery like DTH & CAS pay channels are delivered in encrypted mode and are decrypted through STB at subscribers premises.

Video channels through cable Mainly transmitted by MSOs and cable

operators at local level through cable networks. 8

FDI Limits in Broadcasting IndustrySl.

No.Segment Existing limit Entry

RouteRecommended

limit by TRAIRemarks

1. Teleport (Hub) 49% (FDI+FII) FIPB 74% (FDI+FII) In Carriage segment of broadcasting sector i.e. cable TV, DTH, HITS, teleport, mobile TV etc. foreign investment up to 49 percent should be on the automatic route and above 49% through FIPB . However for content segment FIPB approval would be required

2. DTH 49% (FDI+FII) FDI not to exceed 20%

FIPB 74% (FDI+FII)

3. Satellite Radio No Policy as on date FIPB 74% (FDI+FII)

4. HITS No Policy as on date FIPB 74% (FDI+FII)

5. Cable Network 49% (FDI + FII) FIPB 49% (FDI+FII)

6. FM Radio 20% (FDI + FII) FIPB 49% (FDI+FII)

7. TV Channels (News & Current Affairs channel)

26% (FDI + FII) FIPB 49% (FDI+FII)

Press Note no.2 (2009 Series) – DIPP, Ministry of commerce & Industry, GOI5.2 Counting of Indirect foreign Investment The foreign investment through the investing Indian company would be considered for calculation of the

indirect foreign investment if the investing company is owned or controlled by ‘non resident entities’ and in such an event the entire investment by the investing company into the subject Indian Company would be considered as indirect foreign investment. 9

Uplinking & Downlinking Guidelines of MIB

Uplinking Guidelines Setting up of Uplinking hub/ teleport

A company registered in India under the Companies Act, 1956. The foreign equity holding including NRI/OCB/PIO should not exceed 49% should meet prescribed minimum Net Worth criteria, pay fee as per number of

channels capacity. The applicant company shall obtain registration for each channel, in accordance

with the procedure laid down under the Downlinking Guidelines notified by the Ministry of Information & Broadcasting separately.

Uplinking of non-news and current affairs channel The applicant company, irrespective of its ownership, equity structure or

management control, would be eligible to seek permission, should meet the prescribed minimum Net Worth criteria , pay fee as per number of channels capacity.

Uplinking of news and current affairs channel Foreign Equity holding including FDI/FII/NRI investments should not exceed 26% of

the Paid Up equity of the applicant company, should meet prescribed minimum Net Worth criteria, pay fee as per number of channels capacity.

At least 3/4th of the Directors on the Board of Directors of the company and all key Executives and Editorial staff shall be resident Indians 10

Uplinking & Downlinking Guidelines

Downlinking Guidelines: The entity uplinking from abroad must be a company registered in India under the

Indian Companies Act, 1956, irrespective of its equity structure, foreign ownership or management control and must have a commercial presence in India with its principal place of business in India

Must either own the channel it wants downlinked for public viewing, or must enjoy, for the territory of India, exclusive marketing/ distribution rights for the same and authority to conclude contracts on behalf of the channel for advertisements, subscription and programme content.

The applicant company should meet the minimum net worth criteria . Shall adhere to any other Code/Standards guidelines/restrictions prescribed by MIB,

GOI for regulation of content on TV channels from time to time. No News and Current Affairs channel shall be permitted to be downlinked if it does

not meet the following additional conditions: That it does not carry any advertisements aimed at Indian viewers; That it is not designed specifically for Indian audiences; That it is a standard international channel; That it has been permitted to be telecast in the country of its uplinking by the

regulatory authority of that country 11

Future - Multiple layers of Convergence

YESTERDAY (Silos into the home)

TODAY(Convergence of services,

networks & devices)

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Digitalization in India!

USA, Europe India• Refers to Terrestrial

Transmissions going Digital (DTV)• Cables and DTH have been digital

for long time• IPTV is a new technology along

with DTV

• Commonly refers to Digital cable or DTH

• Cables are mostly Analog • CAS implemented in notified

areas of certain metros. • TRAI has recommended

extension of CAS in 55 cities.• IPTV is an emerging technology• Terrestrial Broadcasting is the

exclusive domain of DD• Digitalisation addresses the issue

of piracy and under declaration

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Forms:

• Illegal decoders

• Other Decrypting technology

• Use of decoders over more than the authorized area

• Hacking of smart cards

• Hacking/tapping of pre-broadcast signals

• Lack of addressability – Under-declaration by Cable operators

Piracy Issues in Broadcasting

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Piracy Components

Source: CASBAA – Digital Deployment – Asia Pacific Pay-TV Industry Study, October, 2008

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Cost of Piracy

Source : CASBAA – Digital Deployment – Asia Pacific Pay-TV Industry Study, October, 2008

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County Piracy Type Net Piracy Cost 2007 (US$ Mill.)

Net Piracy Cost 2008 (US$ Mill.)

Australia Individual Connections 37.80 36.12

Hong Kong Individual Connections 26.41 19.59Satellite Overspill 1.05 1.72

India Individual Connections 19.20 20.74Grey Market Estimation 965.52 1121.92

Indonesia Individual Connections 8.91 5.83Illegal Distributors 27.72 27.20

Macau Illegal Distributors 13.18 14.15

Malaysia Individual Connections 1.83 2.35Satellite Overspill 2.36 2.48

Pakistan Illegal Distributors 110.40 126.58

PhilippinesIllegal Distributors 24.19 24.57Individual Connections 46.08 49.79Subscriber Under-declaration 14.69 20.12

Singapore Individual Connections 1.87 2.30

TaiwanIllegal Distributors 10.31 9.96Individual Connections 35.11Subscriber Under-declaration 37.13 35.86

ThilandIllegal Distributors 151.58 162.53Individual Connections 19.45 14.54Satellite Overspill 8.61 7.16

Vietnam Individual Connections/Overspill 10.21 5.90Subscriber Under-declaration 7.17

Source : CASBAA – Digital Deployment – Asia Pacific Pay-TV Industry Study, October, 200817

Tax Cost of Piracy

At least US$238 million is being lost annually to regional government purses

Losses comprise:Corporate profits tax: US$181 millionVAT/GST: US$56 million

The main governments losing out are:Thailand US$66 millionPakistan US$65 millionPhilippines US$44 millionTaiwan US$25 millionAustralia US$14 million

Source: PricewaterhouseCoopers18

• Smuggling of decoders from other countries into India

• Decoders from India taken to other countries

• Hacking of smart cards software

• Hacking/tapping of pre-broadcast signals

• Manufacture of decoders or other decrypting technology

– boxes are sold on large scale.

• Cable operators extending beyond area of distribution

Types of Piracy

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EUROPE 10,099,404 HomesAMERICA

577,281 Homes

MENAP 40,931,416 Homes

AFRICA 180,254 Homes

INDIA72,000,000 Homes

APAC5,447,523 Homes

Example ; Zee’s connectivity

MENAT – Middle East, North Africa & PakistanAPAC – Asia Pacific

The Largest Indian Television Network in the world

28 domestic channels, 18 international channels, across 167 countries, over 500 million homes

Indianbroadcastershave large viewership

across continents also

because of popularity of their content not only amongst Indians but also amongst global viewers. 20


577,281 Homes




APAC5,447,523 Homes




Areas covered• Africa• S.E.Asia• India• Pakistan• Gulf region• UK/Parts of

Europe• USA• Canada

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577,281 Homes




APAC5,447,523 Homes




Main areas of piracy•Gulf region•Pakistan•Parts of Europe•Parts of USA•Africa•Countries like Malaysia, Thailand etc.,

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Protection & Regulation of Broadcasters• Uplinking & Downlinking Guidelines;

• Content regulated by MIB. Programming and advertisement codes laid down. All service providers are bound by the codes.

• Copyright Act, 1957;• Cable Television Networks (Regulation) Act, 1995 (CTN Act, 1995)• The Sports Broadcasting Signal (Mandatory Sharing With Prasar Bharti)

Act 2007• Telecom Regulatory Authority of India Act, 1997 & Regulations framed

there under; (TRAI)

Present legal Position

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Copyright Act 1957• As per the amendment introduced in the year 1995, Section 37 of the Act provides

that every Broadcasting organization shall have a special right to be known as “Broadcast Reproduction Right” in respect of its broadcast.

• Section 2(dd) – “Broadcast” means communication to the public –I. By any means of wireless diffusion, whether in any one or more of the forms

of signs, sounds or visual images; orII. By wire; and includes a re-broadcast

• Section 2(b) of the CTN Act, 1995 – “Cable Services” means the transmission by cables of programmes including re-transmission by cable of any broadcast television signals.

• Section 2(g) of CTN Act, 1995 – “Programme” means any television broadcast and include exhibition of films, features, dramas, advertisement and serials through video cassette recorders or video cassette players.

• Rule 6(3) of the CTN Rules, 1994 – No cable operator shall carry or include in his cable service any programme in respect of which copyright subsists under the Copyright Act, 1957 unless he has been granted a licence by owners of copyright under that Act in respect of such programme.

• Thus the broadcast through retransmission by wire is protected by Indian Law which still is an unresolved issue in the context of WIPO Treaty 24

Copyright Act, 1957• Fixation -Not specifically defined• Sec.37 (3) – Making sound recording or visual recording is illegal Sound Recording is

very broadly defined• A recording of sounds from which sounds may be produced regardless of the

medium on which such recording is made or the method by which the sounds are produced.

• Ref. to defn of “Broadcast” & Sec.14 (reproduction by electronic means is the excl. right of the owner)

Fair Use• Provisions contained in Sec.52 of the Act -In addition to all the other provisions of

Fair Use viz., Fair dealing for private use including – Research, – Criticism, – to make back-up copies for studying interoperability of comp. programmes, – for reporting current events, etc., – Making of ephemeral recordings is not infringement– Use for an official ceremony by the Government or in a religious ceremony.

• Sec.39A – Every broadcast has to be with the license of the owner of the work that is being broadcast. License to reproduce the broadcast also requires license of the owner. Statute therefore recognizes and gives supremacy to the owner of the content. 25

As per the extant position the protection to the broadcaster is mainly through Rome Convention, 1961 and Article 14(3) of TRIPS Agreement, 1995, which inter alia include the right to prevent fixation of broadcast.

Protection granted only to signals and not to the content carried in the signals. Moreover the protection is in respect of only live signals. Pre-broadcast signals not covered.

Proposed Treaty – Informal Paper dt.3/11/2008 prepared by Chairman-SCCR - Unresolved issues:

Signal Based approach : Protection only to live signals or even to post fixation activities?

Objectives – Protection of signal from misuse: Protection of investment confined only based on the terms of contract –

i.e., the medium of transmission authorized or even beyond – any type of unauthorized use through any medium

Issues in the context of proposed WIPO Treaty

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Scope – What is to be covered? Nature – whether it covers only protection of the signals before and during

transmission or even transmission of content after fixation – post fixation rights? Whether it cover public domain content? Relationship with the rights of content creators & performers’ – rights not to be

infringed and scope covered only based on express terms of the contract between the content creator and broadcasting organization.

Communication to public other than through TV – mobile, computer, etc. Object – what is the meaning of “broadcast”?

Confined to signal or also to content carrying signal Whether technology specific or neutral specially in the context of digital technology

and convergence Meaning of - retransmission - re-broadcast

Confined only to simultaneous broadcast including deferred based on time zones? Confined only to the medium of traditional broadcasting and not internet based? Cover even post fixation transmission leading to post-fixation rights? Rebroadcast by wire – cable & internet

Source : Protection of Broadcasting Organisation : Unresolved issues before WIPO by Prof. (Dr.) N.S.Gopalakrishnan

Contd…..

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TRAI Act, 1997

Regulator:By notification dt.9.1.2004, TRAI who had been regulating

telecommunication services was also entrusted with the Regulation of Cable & Broadcasting sector by including these services in “Telecommunication Services”

TRAI has issued series of Regulations for regulating the sector. The main regulation dt.10.12.2004 elaborately defines the terms “Broadcasters” and distributor of channels viz. “Cable Operators”, “DTH Operators” & “IPTV Operators” as also the broadcasting services & cable services.

Adjudicator:Telecom Disputes Settlement and Appellate Tribunal - a specialized sector

tribunal - adjudicates disputes between two or more service providers.Appeals against the orders of TDSAT directly lies with Supreme Court of

India

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Broadcasting Services – categorized as Essential Services

“Cable broadcasting may not be an essential commodity in the sense that it is not an item of food without which one cannot survive, yet looking to the figures of TV viewership in this country its importance cannot be underestimated. Available figures suggest a TV viewership of 68 million for the whole country. This shows that television viewing has almost attained the status of an essential service in this country.”

Hon’ble TDSAT in its judgment dt.27/02/2007 in Case of Set DiscoveryVs. TRAI & others has observed asunder:

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Thank You

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