Our view
The policy provides details of increased focus towards broadband penetration to promote growth of digital and OTT video consumption, which will benefit digital advertising space; granting infra status to broadband just like the telecom sector will attract more investments in the space. India TV penetration has breached 75% and the incremental growth will come from hybrid box (providing Digital and tv content) for which investments have to be scaled up. There is also a mention of more regulatory changes in the linear TV segment – in our view that could be in the form of NTO 2.0 or any other new norms that may be introduced; the opening up of Free Dish space further will increase the competitive intensity for larger broadcasters. There is also a mention of self regulation, which gives some indication that censorship may not come for digital. Digital radio is a positive for private radio players as it can lead to having multiple Channels in one frequency and lead to savings in the license costs (approx 4% of the revenue today)

Impact on listed broadcasters
We maintain our positive bias for the large listed broadcasters, however that is only limited in the near term as long term challenges in the form of 1) increased consumption towards digital content 2) heavy regulations on the TV industry 3) access towards all forms of content through a hybrid box, which will make aggregators even more strong in the ecosystem. The broadcasters will have to aggressively scale up their digital offerings by providing high quality content and also work towards a B2C offering to reduce their dependence on telco partnerships for growth in subs revenue

National Broadcast Policy Dec’20 Summary:- Intention & Need for Policy

• Broadcasting sector is well placed to harness the economic strengths largely due to large domestic market, Radio & TV broadcasting proving employment opportunities to creative professionals, development of IP etc.
• Maximizing the access to broadcasting as a policy objective has been largely addressed as 197mn households subscribe to TV networks i.e. 75% of total households in India. Put Radio channels available in 100 cities & All India Radio(AIR) reaches 99% Indians in 23 languages.
• Now, with majority of the households being digitized, there is need to enable access to wider choice of content & technology which is the main objective of the policy.
• Need to reimagine the emerging interest of consumer in quality content, experiences, responsive & accessible services, which the policy aims to address.
• Policy is also necessary to : 1) encourage investments in niche regional content & promote quality content as demanded by consumer 2) Provide multiple avenues to choose between technology & modes of content consumption.
• Policy will help promote the content exports supported by well positioned production & distribution mechanism for TV & Radio.

Broad Goals & Strategies to achieve those goals

• Universal Reach of Broadcasting – Quality content creation by incentivizing investments into content creation, making it available to all at affordable rates(by offering Free Dish, collaboration & partnering of Prasar Bharati with other platforms, making DD, AIR on & ensure universal services across sector.
• Choice of suitable distribution technology/mode : Providing choice of Art, transition to broadband ready cable infrastructure & support indigenous production of consumer premises equipment’s.
• Enabling level playing field for sector growth – grant infrastructure, make India destination for foreign invts, engender self regulation, content security & privacy/copyright protection & catalyze skill upgradation & development.
• Enhanced global outreach – Projecting Brand India, global footprint of Indian satellites etc.

Key Highlights of Broadcasting Market in India(2019)

• No. of TV Broadcasters – 1 public sector(Doordarshan) available in 38 countries, 359 Pvt broadcasters, 926 Pvt TV channels & 328 Pay TV channels
• No. of Radio Broadcasters – 1 public sector, 467 radio stations & 667 radio transmitters. AIR reaches 99.2% Indians in 100+ cities. 280 community radio stations of which 210 are operational.
• 1143 MSO’s, 60000+ cable operators, 4 pay DTH operators, 1 HITS operator
• Revenues – INR 771bn as on 2018 & FDI of 1.93% since April’2000 to June’2019.
• Market potential – 298mn households, 197mn TV households, 836mn viewers, 88% of Households digitized while 98.5mn cable TV households.
• Active DTH subscribers of ~72.4mn, HITS subscribers at 1.5mn
• Radio listenership at 202.7mn users while Terrestrial TV at 4mn user