MUMBAI: Are the winds of change blowing in probably what is the most hypercompetitive and protected media market in the world after China? It looks likely that they are.
The US Federal Communications Commission announced over the weekend that it is considering relaxing foreign investment norms in broadcast TV and radio stations in the US. Current norms restrict foreign holdings in companies holding broadcast licences at 25 per cent.
The FCC is scheduled to have an open discussion on this when it meets on 14 November under Acting Chairwoman Mignon Clyburn. Clayburn says once its proposal is approved, the FCC will take decisions on proposals on a case by case basis. An official statement quoted her saying: “I circulated a declaratory ruling that clears the way for increased access to capital and potential new investors for the broadcast sector. Approval of this item will clarify the Commission’s intention to review, on a case-by-case basis, proposed transactions that would exceed the 25 per cent benchmark that restricts foreign ownership in companies holding broadcast licenses.”
FCC Commissioner Ajit Pai added while speaking to a wire service that there is a great disparity in the fact that foreign companies can indirectly invest more than 25 per cent in wireless telecom, internet, cable TV ventures while draconian restrictions continue to hamper the flow of capital in the US broadcast sector which is going through turbulent times.
The proposal has been welcomed by many in the broadcast sector including the National Association of Broadcasters and The Minority Media and Telecommunications Council (MMTC), which has in the past stated that the rules framed in 1912 need to be changed.
In a statement, MMTC explained its advocacy for the measure: “MMTC, along with over 50 national civil rights, intergovernmental, entrepreneur, and professional groups, has petitioned the Commission to amend the rules for eight years. The organisations have cited the lack of domestic investment in diverse radio stations and the relief foreign investment capital would provide to American broadcasters, especially minority entrepreneurs. The move would also facilitate American broadcasters’ reciprocal entry into diverse overseas markets hungry for African-American, Hispanic-American, and Asian-American music and culture.”
It may be recalled that News Corp boss Rupert Murdoch had to become an American citizen and give up his Australian citizenship in September 1985 in order to buy a network of independent television stations. He went to buy 50 per cent of 20th Century Fox Film Corp. (21st Century Fox) and had plans to purchase Metromedia, the nation’s largest group of independent television stations, including KTTV in Los Angeles.
The change in thinking brings to mind the fact that TRAI has been recommending a freeing up of foreign investment norms in cable TV, television - news and current affairs channel (in the uplinking guidelines may be increased from 26 per cent to 49 per cent through the FIPB route), radio (the FDI limits may be enhanced from 26 per cent to 49 per cent through FIPB route for the FM radio sector), DTH, and putting it on par with telecom. Hopefully, there will finally be some movement in that direction.
We don’t know if Indian firms are smelling opportunity, but it well could be. Zee TV already owns a wellness TV service in the US under the brand of Veria and several other Indian broadcasters have launched versions of their Indian channels and delivered them to south Asian diaspora via satellite in the US. Sure, it will provide India’s going-global media firms a chance to put in investments and acquire broadcasting firms - even though they may be local TV stations - in the US. Yes, it will take big money, but for the risk takers the rewards will be big too when they work out.