Channel Nine chief Kerry Packer had a very busy India visit last week. He announced that he was very firm on making India his numero uno investment place following Australia. India has more advantage than his motherland due to the population which stands at almost a billion as compared to Australia‘s 20 million, he pointed out. India is also known for "brains" and is an emerging superpower in IT, telecom and media sectors. Being kicked by the convergence wave, Packer has lined up interesting investments in India. He has picked up a stake in telecom company Himachal Futuristic Communications Limited (HFCL) at a cost of Rs 11,000 million. On 27 March 2000, he joined hands with the blazing broker Ketan Parekh and HFCL chief Vinay Maloo to set up a Rs 11 billion venture capital fund - KVP Ventures. He has already invested close to Rs 700 million in four Indian software and dotcoms ventures. These include the cricket portal cricketnext.com, Omega Portals Ltd‘s children portal mykindasite.com, Hexaware Technologies and Chennai based Radiant Software.

Packer is closely observing the Broadcasting regulations which do not allow majority stake of foreign players in Indian media companies. He is likely to pick up small stakes in media and entertainment companies thus staying in tune with the government policies. Talks were already on to introduce a sports channel in India and the Aussie tycoon met up with the Sahara Group boss Subroto Roy. The group recently launched a general entertainment channel in India. The sports channel will be directly pitched against ESPN and Star Sports.

What is to be seen is whether Packer succeeds in India which has a presence of giants like Subhash Chandra and his arch rival Murdoch who‘s recent India visit unleashed his new ambitions for this region. It will be a wait and watch scenario in which the general consumer will more or less benefit.

Maharashtra chief minister Vilasrao Deshmukh has invited the entertainment industry to come up with suggestions to help develop Maharashtra as a bigger player in the entertainment industry. While speaking at the FICCI seminar in Mumbai yesterday, Deshmukh said he would like suggestions from captains of industry to take his state forward.
"This region should be developed as a satellite hub," he pointed out. "I see earth stations coming up to make this as a centre of activity for television."

He added that his government was going to come up with a package to allow for the setting up of cinema multiplexes in the state. "We are examining what the other states are doing on this front. Top of our minds is making the sector viable."

He added that his government was working on setting up a new training institute for film and television in the state.

Indian information and broadcasting minister Arun Jaitley issued a stern warning to TV channels which are banking on nudity and semi-nudity or provocative programming to attract audiences and generate viewership.

"People have protested about how some organisations are taking advantage of liberal norms in India. Why should you have a stripper in a airconditioner ad which was shown recently on television? Why should a condom commercial be so erotic and put on television for all to see," he asked. "If fashion is to be marketed in terms of transparent clothing, and every decency violated on TV screens, I don‘t know if we can allow that. The cable and satellite industry has to morally police itself. Also advertisers. There are issues which affect our sensibilities. I don‘t think Indian society is prepared for this. We want a liberal regime. Hard censorship is abhorrent to any democracy. But if industry is not interested then we may have to step in."

Jaitley was speaking while addressing a gathering organised by FICCI on what Indian entertainment should be doing to ensure rapid growth in the new millennium on 30 March.

He responded icicly: "The industry has absolutely no responsibility does it? TV censorship in India is not in the form of pre-censorship. It is like the green channel in the Customs where the onus is on you to declare honestly. But if we allow some channels which are not comlying honestly than five others will get in and take advantage of our liberal attitude. "

Going by Jaitley‘s statements it is quite likely that the government may shortly come out with a ban against the Michael Adam promoted Fashion Television, which is generating high viewerships in India mainly because of scantily clad models. Jaitley had banned Russian channel TB6 last year because it showed pornographic films and had ordered Indian cable networks to stop carrying it on their networks. Most Indian cable TV operators have complied since.

The Ficci‘s International Conference on The Business of Entertainment ended today with a concluding speech by Tapan Sikdar, the Minister of Communications.
Earlier in the day, discussions were held on the content aspect of the entertainment industry. The session was headed by the noted film maker Shyam Benegal. The next session covered the film production and marketing, and the international status and presence of Indian films abroad. The internationally acclaimed director and the maker of the Oscar winning film "Elizabeth" spoke about issues involved about Indian films in the international market. Before this Harish Thawani, chief of Nimbus Communications projected his views about the television and film sector. He displayed his views about importance of synergy between the television and the film industry. The session enlightened the audience about the need of marketing of Indian films and globalising the industry.

The post lunch session was about the music industry in India. It covered issues from piracy, internet, IPR, radio and the general scenario of music industry in India. The concluding session was about convergence and the regulatory framework to enable it in India. The session was headed by the Nasscom chief Dewang Mehta and the panel of speakers included Sony Entertainment Television chief Kunal Dasgupta, MTV India chief Alex Kuruvilla, MD Modi Entertainment Network MD Ajay Nijawhan and UTV head Ronnie Screwvala. The session demanded a clear and comprehensive regulatory policy for the success of convergence in India which is a entertainment software heaven.

The effort by the Ficci was quite admirable as it enlightened quite a few and brought the whole entertainment industry together.

"No specific time line has been set to get a broadcasting bill in place. But we are trying our best to get it out at the earliest." Thus spoke Information and Broadcasting Minister Arun Jaitley at the ‘International Conference on the Business of Entertainment: India - Opportunities in the 21st Century‘ on 30 March in Mumbai.
He was making the inaugural address at the two day seminar. He added that the Broadcasting Draft has been sent to the law ministry. "It will come back to us soon. But I cannot say when it will be sent to Parliament."

"We are trying to link legislation for entertainment with telecom. The Bill would take into consideration issues of convergence, and consultations are on with the Telecom Ministry for this", Jaitley said. "A broad framework for convergence is to be laid down which will help legislate the entetainment industry."

The Federation of Indian Chambers of Commerce and Industry (FICCI) has compiled a report "The Indian Entertainment Industry: Strategy & Vision" with the assistence of Arthur Anderson. It was officially released at the "International Conference on the Business of Entertainment: India-Opportunities in the 21st Century" held in Mumbai on 30 March, 2000. The report presents very optimistic figures pertaining to the entertainment industry and makes some recommendations to the government to facilitate the growth of the industry. It expects the turnover of the entertainment industry to touch Rs 600 billion. The report says that the future of television broadcasting belongs to the satellite channels. The market of regional channels is huge with more and more players like Zee and Broadcast Worldwide making a foray into the regional channel market. Even the niche channels like Nickelodeon, Maharishi, Cartoon network, Fashion TV, ESPN, Discovery, Channel V etc have a tremendous potential and their huge success indicates the fragmentation of audience. Regarding the Direct-To-Home (DTH) mode of distribution of television channels, the report says that it too has a tremendous potential and if the segment is opened up, there would be 1 million DTH homes in India by 2002.

FICCI recommends that the government should lift the ban on the use of KU Band reception equipments as it will be incongruent in a scenario of freely viewable television channels over the Internet. It also suggests that the government should privatise the terrestrial network along with introduction of DTH which will enable the smaller cities to receive satellite channels as the cable operators ignore that segment. Another important point highlighted is the ammendment in the conditions for the presumptive rate of taxation of foreign companies which stands at the rate of 10% of deemed profits. A legislation clarifying the taxation of foreign telecasting companies is demanded.

Development of about two to three earth stations in India within the next six to seven years would generate revenues between $12 million to $23 million as Indian as well as foreign channels would consider uplinking from India. The Government can generate revenues between $12 million to $23 million by leasing a part of its terrestrial network. The level of employment can double from the existing 2,50,000 people in the next three to five years. The growth in the broadcasting industry will simulate a similar trend in industries such as the television software industry, film industry, the music industry and even the equipment and hardware manufacturing industry which directly depend on the broadcasting sector.

In the cable television sector, FICCI has requested the government to rectify the hinderences in the growth of the cable television market due to restrictions on foreign equity participation and the short-sightedness of the Cable Television (Networks) Act, 1995 and the archaic Indian Telegraphs Act, 1885. The growth of the cable television industry would help the government in generating more revenues in the form of taxes. The penetration of Internet to the common man can also increase with the growth of the cable television industry. Employment in this sector stands at 2,50,000 people. Additional 4,00,000 peaple can be employed in the next three to five years.

On the television software side, FICCI has requested the government to nominate a representative who would be an active member and assist in industry issues like hardware insurance, copyright protection, etc. The government should also facilitate the growth of training institutions focussing on software development that would help the students learn modern techniques on up-to-date equipment and be aware of the dynamic trends in the entertainment industry. The television software and entertainment companies should also benefit similarly from the 10% listing criterion currently enjoyed by infotech companies as it would help in giving adequate ESOPs. Another benefit of utilising 100% proceedings of funds raised through ADR/GDR issues to acquire overseas companies is enjoyed only by IT industries and this benefit should also be made available to other companies.

Owing to the increase in revenues in this segment to $2,093 million by 2005, the government‘s tax collections will rise to $318 million. If proper and adequate incentives are provided by the government, the export earnings from this segment will rise to $233 million within the next two years, from the current $81 million. The industry expects this figure to touch $1.356 billion by the year 2005. Direct and indirect employment will rise from the current level of 1 million to 2 million by the year 2005.