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The high volume-low margin approach makes it difficult for niche channels to grab a foothold in the broadcasting industry.

Mumbai March 26 With regard to the new Broadcast Bill from the Information and Broadcast Ministry, Mr Shardul S. Shroff, a managing partner from law firm Amarchand & Mangaldas & A. Shroff & Co. had a simple message for the Government.

"Regulations should be oriented to create business," said Mr Shroff, who was speaking at the Regulatory Framework for Entertainment Industry, being held at FICCI Frames 2007, on Monday.

Mr Shroff was part of a panel that included Mr S.K. Aurora, Secretary for the Ministry of Information & Broadcasting; Mr Kunal Dasgupta, CEO of Sony Entertainment India, and Mr Philip Graf, Deputy Chairman of Offcom, the UK's convergence regulatory body.

The discussion focused on the concept of over-arching regulation in the converging world of media, entertainment and telecommunications.

Earlier, Mr Aurora outlined the high volume-low margin model the Government wants the industry to adopt, to make entertainment available to the far-flung areas of the country.

At the heart of the model is the consumer, who is king. The Government's job is to ensure the consumer can freely choose the media of his liking.

In doing so, the Government will also encourage investment in the industry and support its quest to go global. While agreeing in general with Mr Aurora's principles, Mr Dasgupta pointed out that the high volume-low margin approach makes it difficult for niche channels to grab a foothold in the Indian broadcasting industry.

Using the Golf Channel as an example, Mr Dasgupta hypothesised that half the country's two lakh golfers would subscribe to the channel.

At the maximum subscription price of Rs 5 per month, Rs 2.50 would go to the broadcaster.

That works out to Rs 30 lakh a year in revenue, which is not enough to make the Golf Channel a viable project. Mr Dasgupta argued that golfers would willingly pay a higher price for the channel, but for the government regulations.

It is precisely because price controls are so tricky that Offcom does not use them except as a last resort, Mr Graf said.

A regulator should have a light touch and should basically stay out of the way unless called upon, he pointed out.

Eventually, with the help of well-written codes and guidelines, he said, regulators should just fade away, leaving the media and entertainment industry to regulate itself.

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