Fdi in media & entertinement

Foreign Direct Investment  IN MEDIA & ENTERTAINMENT

DefinitionForeign direct investment is a direct investment into

production or business in a country by an individual or

company of another country, either by buying a company

in the target country or by expanding.

FDI INCLUDES• MERGER&ACQUISITION.• BUILDING NEW FACILITIES. • REINVESTING PROFITS EARNED FROM OVERSES

OPERATIONS.• INTRA COMPANY LOANS.

Types of FDI’s• Horizontal FDI arises when a firm duplicates its

home country-based activities at the same value chain stage in a host country through FDI.

• Platform FDI Foreign direct investment from a source country into a destination country for the purpose of exporting to a third country.

• Vertical FDI takes place when a firm through FDI moves upstream or downstream in different value chains i.e., when firms perform value-adding activities stage by stage in a vertical fashion in a host country

Methods

The foreign direct investor may acquire voting power of an enterprise in an economy through any of the following methods:

• By incorporating a wholly owned subsidiary or company anywhere

• By acquiring shares in an associated enterprise• Through a merger or an acquisition of an unrelated

enterprise• Participating in an equity joint vanture with another

investor or enterprise

Foreign Direct InvestmentIN INDIA MEDIA & ENTERTAINMENT

India has been ranked at the second place in global foreign direct investments in 2010 and will continue to remain among the top five attractive destinations for international investors during 2010-12 period, according to United Nations Conference on Trade and Development (UNCTAD) in a report on world investment prospects titled, 'World Investment Prospects Survey 2009-2012'.

MEDIA & ENTERTINEMENTIndian advertising industry stands at the size of US $ 5 billion in 2010, based on PwC’s India Entertainment and Media Outlook 2011 estimates. The main components of Indian advertising are:•Internet advertising which is its fastest-growing segment•Radio advertising•Print advertising - the largest segment in the advertising industry•Television advertising- the second largest segment.

Investment Policies74% FDI: Under the Broadcasting Carriage Service’s investment policy, 74 % FDI is permissible for Teleports, Direct – to – home (DTH), Cable Networks {Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalization and addressability}, Mobile TV & Headend-in-the Sky Broadcasting Services (HITS). There is automatic route upto 49% investment and government route beyond 49% and upto 74%.

26% FDI: Under the Broadcasting Content Services’ investment policy, 26% FDI is permissible for Terrestrial Broadcasting FM (FM Radio) and Up-linking of News & Current Affairs’ TV Channels with the Government approval

100% FDI: Under the Broadcasting Content Services’ investment policy, 100% FDI is allowed for Up-linking of Non-‘News & Current Affairs’ TV Channels//Down-linking of TV Channels with the Government approval Print media

Major PlayersGovernment approving 75 licenses for launch of new channels or re-launch existing channels in HD after a freeze of two years. The major players who are launching new channels and HD channels are Discovery, UTV, Fox, ZEE and STAR amongst others

Apart from Prasar Bharati, Dish TV India Ltd., Tata Sky Ltd, and Sun Direct TV Pvt. Ltd., Reliance Big TV Pvt. Ltd., Bharti Telemedia Ltd and Bharat Business Channel Ltd have been granted license for operating DTH services.

INVESTMENT OPPORTUNITIES

• Theatre/ Multiplex Infrastructure• Television Segment• Film Entertainment• Animation Segment• Print Media• Mobile Entertainment• Television Software Content• Advertising

ADVANTAGESIn my point of view FDI in retail is good for Indian economy. Because of it it grow fast as well as increase the standard of living of people. There are several benefits as under.1. Increase employment.2. Customer get good product at reasonable price.3. Farmer get enough price for his product.4. All brand under one roof.5. There are many option available for customer to chose best among the various brand.6. New technology are come and it helpful to fulfill customer need.7. Because of employment the national as well as per capita income will increase

DISADVANTAGES

• It has been observed that the defense of a country has faced risks as a result of the foreign direct investment in the country.• At times it has been observed that certain foreign policies are adopted that are not appreciated by the workers of the recipient country• Economically backward section of the host country is always inconvenienced when the stream of foreign direct investment is negatively affected.• The disadvantages of foreign direct investment occur mostly in case of matters related to operation, distribution of the profits made on the investment and the personnel

BARRIERS Lack of empowered regulators Cross-media ownership rules Price regulation in the television industry Content regulation Level playing field with incumbents : Lack of a uniform media policy for foreign investment Piracy Tax treatment of foreign broadcasting companies

ANY QUERIES??