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The media industry is seeking clarity as they await details on the government’s move to permit 26 per cent FDI for uploading and streaming of news and current affairs through digital media.
Ashish Pherwani, Partner and Media and Entertainment Leader, EY India, said, “This move will necessitate a re-think of their India strategy by many digital news companies and may require clarity between digital news production companies, news aggregators and platforms. The definition of digital media itself will be critical.”
Also read:Government opens up FDI door further
Analysts said that the government was earlier silent on the issue of FDI in digital media. Himanshu Parekh, Partner and Head, Corporate and International Task, KPMG India, said, “The FDI policy currently permits 49 per cent foreign investment in uplinking of news and current affairs TV channels and 26 per cent in the print media sector, both through government approval rate, but it was silent on FDI in digital media segment.” He added that the government’s move to allow 26 per cent FDI in digital media should lead to larger FDI inflows in India in the already “burgeoning digital media sector”.
There is also confusion for news broadcasters, especially those who may already have 49 per cent FDI infusion, but also stream online and have digital presence.
Manav Sethi, Group Chief Marketing Officer, Eros International, said, “The scope of the impact will be determined by the wording of the provision in the FDI policy. How would you differentiate between TV channels which have 49 per cent and their online streams, which will effectively have 26 per cent?”
Existing digital news platform who have already raised more than 26 per cent FDI will need to rejig their shareholding structure to align themselves to the new FDI norms, an analyst pointed out.
Industry executive also said that this is expected to be beneficial for larger media companies who can raise additional capital by hiving-off out their news digital platforms as separate ventures.
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