The policies of the Ministry of Information & Broadcasting, Government of India, are fully geared towards realising the complete potential of the M&E sector by forging global partnerships and providing an enabling environment by lowering market barriers and propelling growth
In the rapidly changing global media and entertainment landscape, India has emerged as a window of opportunity to position itself as a hub for audiovisual services for the rest of the world. Media and Entertainment is one of the champion sectors supported by the Government of India. The incentives for the audiovisual services that closely match the sops given by various other nations are already finalised by the Ministry of Information & Broadcasting. They are waiting for the appropriate time to announce incentives that is set to handhold industry in the aftermath of Covid-19 pandemic.
India has probably one of the most liberal investment regimes in the media and entertainment, information and communication sector amongst the emerging economies with a conducive foreign direct investment (FDI) environment and ease of doing business.
Digitization and the growth of the internet are reducing many barriers to market entry and creating opportunities for smaller companies’ offering skills and services in new forms of content creation for various platforms.
In the current scenario, the Indian animation (IPs included) and VFX Services have gained a lot of traction among the international producers and production houses. In the following pages we have curated 15 animation co-production projects seeking partners at Annecy/MIFA 2021.
In the aftermath of coronavirus pandemic, Indian media, entertainment and technology services are witnessing new growth opportunities on the back of growing offshore services domain, especially in animation, VFX, gaming, AR/VR and digital media, among others.
Many companies have created top-end studio facilities in India that serve as single windows to fulfil the needs of the M&E industry (Technicolour India, Deluxe). Their international business model offers local and remote clients the opportunity to produce and co-produce and distribute content anywhere around the world.
Media & Entertainment sector has been supported by the Government of India as one of the champion sectors with immense potential of growth both within and outside the country. Media and Entertainment is also among the sectors that clearly has made an impact of Make in India, Show the World. For services it is Make in India, Serve the World.
The role of the Ministry of Information & Broadcasting is to facilitate the industry to create jobs and growth for the sector. The government’s efforts are driven towards creation of forums and forge partnerships to keep the momentum going.
Content produced for Indian media sectors holds tremendous potential for global consumption. With a significant diaspora population residing overseas, Indian content is a key tool for these communities to connect with their cultural roots.
The Indian film industry is fairly unique in the world. The country, along with America and China, is among the few that can sustain their industry domestically. You can make a film just for India, or even one region within India. Once when the Government gives green signal to open theatres there are over 83 films waiting to be released in India. OTT players like Amazon Prime, Netflix, Disney + Hostar, ZEE5 have brought in a transformation in expanding Indian content reach to over 100 territories across the world.
India has audio visual co-production treaties with over 15 countries — Bangladesh, Canada, China, France, Germany, Israel, Italy, Republic of Korea, New Zealand, Poland, Portugal, Spain, UK & Northern Ireland, Bangladesh, Russia. It is now possible for filmmakers of different countries to come together and make films under bilateral co–production agreements. Co-productions under these agreements are more beneficial to filmmakers than a purely commercial partnership between two individuals or entities. New markets and audiences would be available for the product, especially if collaborations and partnerships are between nationals of different countries.
The Ministry of Information & Broadcasting is currently finalising incentives for co-production, filming under the champion sector scheme. In addition to films, TV Series, Web Series, Animation will be also be included in the co-production projects.
The Augmented and Virtual Reality, the two spectrums of immersive technology, will form the next frontier of growth for the M&E industry. For India, AR/VR can open up new creative avenues. According to a report, the Indian AR/VR market is expected to grow at a CAGR of 76 percent over the next five years, fuelled by demand from business and consumer sectors. The past few years have witnessed the emergence of over 200 AR/VR start-ups in the country. Bengaluru and Hyderabad take the lead, attracting a big chunk of these start-ups, followed by Delhi and Mumbai. Among states, Karnataka and Telengana are actively promoting AR/VR startups by providing incubation, mentoring, idea validation by experts, opportunities to deploy pilots with various departments, along with fund support for eligible ones. This was the major takeaway at the recently concluded Global AVGC Summit FX 2020 organised by the Confederation of Indian Industry.
Dinesh Gupta, Director and Co-Founder at Sacom in one of the the recent Pickle columns mentioned massive growth opportunities in video gaming. Statista’s Global Digital Market Outlook pegs the digital media market at US$ 172,502mn in 2020 with a 9.8% year-on-year growth projection. This forecast was adjusted for expected global impact of Covid-19 pandemic. Video Games share with a projected market volume of US$ 92,633 mn and 11.41% growth over previous year dominates the digital media market with a close to 54% worldwide share. This makes the Video Games industry much bigger than Video-on-Demand, ePublishing and Digital Music put together. Majority of the revenues for video gaming are contributed by mobile gaming which is likely to contribute as much as 60% in 2020.
Addressing FICCI Frames 2020 virtually, Amit Khare, Secretary, Ministry of Information and Broadcasting, Government of India, said the demand of 26 per cent FDI limit for news aggregators is being looked into by the government
In order to provide a level playing field to print and digital media in India, the Ministry of Information and Broadcasting is considering limiting to 26 per cent Foreign Direct Investment (FDI) for news aggregators, which have seen accelerated rate of growth driven largely by investments flowing in from countries like China.
Addressing FICCI Frames 2020 virtually , Amit Khare, Secretary, Ministry of Information and Broadcasting, Government of India, said the demand of 26 percent FDI limit for news aggregators is being looked into by the government even as the Ministry of Information and Broadcasting believes in playing the role of a facilitator and educator rather than a regulator of the Media and Entertainment Industry.
During the discussion, Girish Agarwal, Promoter and Director, Dainik Bhaskar Group, highlighted that print media and news aggregator regulations differ from each other. His remarks were in the context of the 26 percent FDI cap on print media, which didn’t apply to news aggregators.
Girish Agarwal added that these discrepancies must be harmonized to create a level playing field for print media and digital news aggregators, as well as radio and podcasts.
Khare also invited M&E industry representatives to provide more clarity on the definitions of various infrastructures included in the proposal to give infrastructure status to the M&E industry. Khare said the Ministry of Information and Broadcasting, Ministry of Finance and NITI Aayog are agreeable to grant infrastructure status to the broadcasting sector. For this, stakeholders should arrive at a common understanding on what infrastructure will be covered within this definition.
He also acknowledged that digital media in India is growing very fast and changing the consumption pattern and consumer behavior. Citing the example of 11 working groups formed by the PMO to aid convergence between various Ministries to manage the COVID-19 crisis, he said that the I&B Ministry is trying for convergence of regulation of digital content and digital platforms, which currently fall under the purview of the Ministry of Electronics and Information Technology.
Technological changes will outpace regulation, so it would be optimal to create a negative list (No Go Zone) of prohibited activities, just like Singapore has done. Outside this list, any platform or medium can function without other regulations.
Khare said, “From the Spartan world of traditional movie marketing, we have now entered a rather sophisticated universe of digital movie making. While looking at different digital mediums is important, one should not forego the importance of personal touch, as the entertainment industry plays on human emotions.”
He added, “Convergence and coordination of various Ministries is mandatory for the smooth functioning of the entertainment industry.”
Stating that there are different regulatory practices for different media such as the Press Council of India for the print media and the Central Board of Film Certification for films, Khare said there has to be a level playing field for all, including OTT platforms such as Netflix and Disney+ Hotstar, which do not come under any regulatory purview as of now.
Khare said OTT is a subject under the Ministry of Electronics, Information and Technology (MEITY), but Information and Broadcasting wants the content part to fall under its purview.
Khare said, “Instead of bringing everyone to the lowest common, the attempt is to have more freedom to all of them. We must try to regulate or rather facilitate the sector. There is definitely a need for a level playing field among the different media.
But, level playing field does not mean getting everyone under very heavy regulatory structures. In fact, the last six years of the present Government has been focused on doing ease of business and having less but more effective regulation.”
Speaking on the challenges being faced by storytellers owing to the fast evolution of technology and digital media, noted Filmmaker Shekhar Kapoor said that both creators and regulators have fallen behind the fast pace of development in the digital media technology, which has thrown a huge challenge for traditional storytellers like filmmakers. He added that the fast emergence of digital platforms keep him on his toes.
Finance Minister Nirmala Sitharaman has proposed to further relax norms and open up foreign direct investment (FDI) in Media and AVGC (Animation, Visual effects, Gaming and Comics) sector in her maiden budget speech on Friday.
“I propose to further consolidate, the gains in order to make India more attractive FDI destination. The government will examine suggestions of further opening up of FDI in media, AVGC (Animation, Visual effects, Gaming and Comics) in consultation with stakeholders,” she said.
Already India is one the most liberal media markets in the world in foreign direct investment (FDI) for global companies to engage in business.
Currently, the government allows 26% FDI in publishing of newspapers and periodicals involved with news and current affairs through the approval route and 49% FDI in news channels.
While no rules have been framed for FDI in news and current affairs in digital media in India, indications are that government may spell out norms for permitting 26% or 49% for Streaming of news & current affairs through digital media.
It is not clear on what’s to come in FDI in AVGC (Animation, Visual effects, Gaming and Comics sector. The AVGC sector already enjoys 100 per cent FDI, although no rules have been forumlated for this sector.
MEDIA & ENTERTAINMENT SECTOR: CURRENT FDI NORMS
FDI in all film-related activities such as film financing, production, distribution, exhibition, marketing etc. is permitted up to 100% for all under the automatic route
100% foreign direct investment (FDI) in the advertising sector through the automatic route
FDI up to 100% now permissible in broadcasting carriage services outlined in FDI Policy, viz., teleports, DTH, Cable Networks, Mobile TV and Headend-In-The-Sky – FDI up to 49% permissible under automatic route and above 49% under Government approval route
FDI up to 100% permissible under automatic route in case of up-linking of non-news and current affairs TV channels and down-linking of TV channels
FDI up to 100% is permitted in publishing/printing scientific and technical magazines, periodicals and journals
100% FDI for General Entertainment Channels
FDI up to 49% permissible under Government route in case of terrestrial broadcasting FM (FM radio), up-linking of ‘news and current affairs’ TV channels
In the news and current affairs category, such as newspapers, FDI has been allowed up to 26% subject to certain conditions
Companies would require government approval for 49% FDI in news channels. But 100% foreign investment in non-news channels or entertainment broadcasters will be allowed through the automatic route