Television

Budget has negative impact, say media analysts

MUMBAI: Motilal Oswal's Inquire Equity Research (MOSt) report titled "Union budget 2003-04: a review" says that the provisions of the budget indicate that the total effective tax on set top box (STBs) imports would fall from 50.8 per cent to 45 per cent. The union budget would have an overall negative impact on broadcasters and MSOs (multi-system operators), the report adds.

Kotak Securities' research report titled "Union budget 2003-2004" maintains that the budget hasn't had any significant impact on the media sector. It has also maintained its "in-line" rating (in line with the sensex fluctuations) on Zee at a price of Rs 84.

The following are some excerpts from the analyst reports regarding the impact of the budget 2003-04 on issues related to the media sector companies:

* Higher service tax will hurt all broadcasters:

The impact of higher service tax will be negative for all broadcasters including the listed ones namely Zee Telefilms (MOSt rating of "Buy"), Television Eighteen and ETC Networks.

While the increased service tax can be passed on to cable subscribers because the increase is only by 3 per cent, it might not be easy to pass on the incremental service tax burden on advertisers due to the prevalent weakness in ad markets.

The MOSt report states that there has been stiff resistance exhibited by big advertisers like HLL, Nestle, Pepsi to pay up the 5 per cent service tax in the past. The issue had been resolved and broadcasting companies had to take some hit in absorbing service tax in some specific cases.

The MOSt Inquire analyst team believes that the increased service tax would hurt the advertising business in India even if individual broadcasters manage to pass it on to advertisers.

Kotak Securities' budget report states that Zee Telefilms will have to pass on the increased service tax to its advertisers. It adds that there is no significant bearing on BalajiTelefilms.

* Marginal cut in import duty on set top boxes a negative surprise: 

Reduction in import duty post budget 2003-04

Set Top box

CIF price

Basic duty

CVD

SAD

Landed cost

Total cost

Existing

100

30 per cent

16 per cent

4 per cent

156.83

56.83 per cent

New

100

25 per cent

16 per cent

4 per cent

150.80

50.8 per cent

MOSt Inquire estimates

The cut in peak customs duty will reduce the duty on imports of fully built set top boxes, albeit marginally. The expectations in the industry were of a much larger cut in duty and this clearly is a deemed negative for the industry. This also belies the optimism in industry participants that the cut in import duty on set top boxes would provide a boost to an accelerated implementation of conditional access system (CAS).

This would negatively impact the pay broadcasters, Zee Telefilms and Television Eighteen and MSOs such as Hinduja TMT, says the MOSt Inquire team.

* Reduction in corporate tax surcharge to benefit all companies:

Reduction in corporate tax surcharge from 5 per cent to 2.5 per cent would benefit all the companies, especially Zee Telefilms and Balaji Telefilms that pay high rates of tax.

Kotak Securities report adds that the real impact on receivables, profitability and turnover will be known in May 2003 when Zee will announce its results.

Foreign exchange rate US$1 = Rs 47.63 as on 5 March

Latest Reads

http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/08/18/Sun_TV_800.jpg?itok=LjfNJsqT
Sun TV leads the Tamil market in BARC week 32

Zee Bangla continued to maintain its first position in BARC’s week 32 data. The Bhojpuri market, however, had a new entrant - Oscar Movies Bhojpuri that secured fifth position, whereas in the Kannada segment, Colors Kannada retained its leadership position. Asianet from Star TV continued took the...

Television TV Channels Viewership
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/08/18/Zee_Anmol-800.jpg?itok=K8PpdkTD
Zee Anmol back on top of Hindi channels in across genres

After a short hiatus, Zee Entertainment Enterprises Ltd (Zeel) free to air (FTA) Hindi GEC Zee Anmol was back at number two rank in Broadcast Audience Research Council of India (BARC) weekly list of the top 10 channels across genres (across genres list) in week 32 of 2018 (Saturday, 4 August 2018...

Television TV Channels Viewership
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/08/17/star.jpg?itok=VclldYU3
Star India mobilises disaster relief for Kerala; Star network rallies public support #AllForKerala

As Kerala struggles with the devastation of massive floods, Star India, and its employees have stepped up to donate to and mobilise disaster relief for the flood-ravaged state #AllForKerala

Television TV Channels GECs
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/08/17/debate.jpg?itok=jDHt_-OJ
BARC week 32: Republic TV regains top position in English News

After losing its top position in week 31 of BARC ratings Arnab Goswami’s Republic TV regained its top position in the English news genre in week 32. Times Now stepped down to second position.

Television TV Channels Viewership
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/08/17/zee.jpg?itok=earyuT-k
Zee Anmol leads Hindi GEC (U+R) in BARC week 32

Dangal TV emerged as the new entrant in Broadcast Audience Research Council (BARC) data for week 32 of 2018 in the Hindi GEC (U+R) market.

Television TV Channels GECs
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/08/17/animal.jpg?itok=nTozo4Fd
HCL Corporation & The Habitats Trust tie-up with Animal Planet to create awareness about the need to save species and their habitats with ‘On the Brink’

HCL Corporation, a global technology conglomerate, & The Habitats Trust, a recently launched foundation working towards protecting habitats and their indigenous species

Television TV Channels English Entertainment
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/08/17/flix.jpg?itok=WvSHeMmv
&flix brings the explosive action thriller this Sunday with ‘S.W.A.T.: Under Siege’

It’s triple the trouble and thrice the thrill – this season, your favorite Special Weapons and Tactics team – S.W.A.T. are back with the third installment of the blockbuster series.

Television TV Channels English Entertainment
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/08/17/vollyball.jpg?itok=JNW_Dk9W
Sony India bets on Pro Volleyball League

Sony Pictures Networks (SPN) India has signed a multi-year deal with Baseline Ventures and Volleyball Federation of India (VFI), to broadcast the inaugural season of the Pro Volleyball League in February 2019.

Television TV Channels Sports
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2018/08/17/romedy.jpg?itok=UvNBe24n
Romedy NOW launches ‘Happy Hours’ in collaboration with ‘Happy Phirr Bhag Jayegi’

Romedy NOW, India’s favourite English Entertainment channel, introduces a specially curated property ‘Happy Hours’, an exciting line-up of romantic comedies, in collaboration with Happy Phirr Bhag Jayegi.

Television TV Channels English Entertainment

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories