FDI IN INDIAN MEDIA
BUSINESS AND
ENTERTAINMENT INDUSTRY
FOREIGN DIRECT INVESTMENT
(FDI)
FOREIGN DIRECT INVESTMENT
A firm invests directly in foreign facility
Investment either by buying a company or
expanding...
FOREIGN DIRECT INVESTMENT
 FDI includes
– mergers and acquisitions
– building new facilities
– reinvesting profits earned...
FOREIGN DIRECT INVESTMENT
 The company has direct managerial control
– Depending on its extent of ownership and
– On othe...
INDIAN MEDIA AND
ENTERTAINMENT (M&E) INDUSTRY
MARKET HIGHLIGHTS
With a conducive regulatory environment and high volumes of content consumption,
India holds significant...
TELEVISION INDUSTRY
The industry is projected to grow at a CAGR of 12% to reach US$11.4 billion by
2014.
The continued dig...
PUBLISHING INDUSTRY
Indian publishing industry is projected to grow at a CAGR of 11% to reach US$7.1
billion by 2014.
A lo...
FILM INDUSTRY
The Indian fi lm industry is projected to grow from US$3.2 billion in 2010 to US$5
billion by 2014 at a CAGR...
RADIO AND MUSIC INDUSTRY
• The radio and music industries contribute just 2.4% of the total Indian M&E
industry revenues.
...
FDI IN INDIAN M&E INDUSTRY
FDI IN PRINT MEDIA
 FDI up to 100% is permitted in publishing/printing scientific
and technical magazines, periodicals an...
FDI FOR RADIO
 Total foreign investment including FDI by OCB/NRI/PIO
etc, is permitted to the extent of not more than 20%...
FDI IN BROADCASTING
 74% FDI: Under the Broadcasting Carriage Service’s investment policy, 74 %
FDI is permissible for
– ...
FDI IN FILMS
 FDI in all film-related activities such as film financing,
production, distribution, exhibition, marketing ...
FDI SUMMARY
FDI SUMMARY
HOW TO ENTER INTO INDIAN MARKET
 Foreign corporations are permitted to open liaison/representative
offices in India subje...
FUNDING OF BUSINESS IN INDIA
 Equity share capital is a conventional method of funding a local Indian
subsidiary company....
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Fdi in indian media (1)

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Fdi in indian media (1)

  1. 1. FDI IN INDIAN MEDIA BUSINESS AND ENTERTAINMENT INDUSTRY
  2. 2. FOREIGN DIRECT INVESTMENT (FDI)
  3. 3. FOREIGN DIRECT INVESTMENT A firm invests directly in foreign facility Investment either by buying a company or expanding operations of an existing business A firm that engages in FDI becomes multinational enterprise (MNE) Multinational = “more than one country”
  4. 4. FOREIGN DIRECT INVESTMENT  FDI includes – mergers and acquisitions – building new facilities – reinvesting profits earned from overseas operations – Intra company loans  Involves ownership of entity abroad for – Production – Marketing/service – R & D – Access of raw materials and other resource
  5. 5. FOREIGN DIRECT INVESTMENT  The company has direct managerial control – Depending on its extent of ownership and – On other contractual terms of the FDI  No managerial involvement = portfolio investment  Most FDI flow has been to developed countries from developed countries  FDI increase to developing countries since ‘85
  6. 6. INDIAN MEDIA AND ENTERTAINMENT (M&E) INDUSTRY
  7. 7. MARKET HIGHLIGHTS With a conducive regulatory environment and high volumes of content consumption, India holds significant potential for foreign investments across all segments of the M&E industry.
  8. 8. TELEVISION INDUSTRY The industry is projected to grow at a CAGR of 12% to reach US$11.4 billion by 2014. The continued digitization of distribution infrastructure, the demand for regional and niche content, and low TV penetration will drive growth in this segment.
  9. 9. PUBLISHING INDUSTRY Indian publishing industry is projected to grow at a CAGR of 11% to reach US$7.1 billion by 2014. A low readership penetration of 30% compared with a literacy rate of 74% underscores the potential for further growth for publishing in India.
  10. 10. FILM INDUSTRY The Indian fi lm industry is projected to grow from US$3.2 billion in 2010 to US$5 billion by 2014 at a CAGR of 14.1%. Growth is expected to come from the expansion of multiplexes in smaller cities, investments by foreign studios in domestic and regional productions, the growing popularity of niche movies and the emergence of digital and ancillary revenue streams.
  11. 11. RADIO AND MUSIC INDUSTRY • The radio and music industries contribute just 2.4% of the total Indian M&E industry revenues. • They are projected to grow at a CAGR of 17.3% to reach US$844 million by 2014.
  12. 12. FDI IN INDIAN M&E INDUSTRY
  13. 13. FDI IN PRINT MEDIA  FDI up to 100% is permitted in publishing/printing scientific and technical magazines, periodicals and journals.  In the news and current affairs category, such as newspapers,FDI has been allowed up to 26% subject to certain conditions including: – The largest shareholder must hold at least 51% equity· – Three-fourths of directors and all executive and editorial staff have to be resident Indians  Upto 74% publishing scientific/technical and specialty magazines/periodicals/journals
  14. 14. FDI FOR RADIO  Total foreign investment including FDI by OCB/NRI/PIO etc, is permitted to the extent of not more than 20% of the paid up equity subject to the following conditions: – One Indian individual or company owns more than 50% of the paid-up equity excluding the equity held by banks and other lending institutions – The majority shareholder exercises management control over the applicant company – Has only resident Indians as directors on the board· – All key executive officers of the applicant entity are resident Indians
  15. 15. FDI IN BROADCASTING  74% FDI: Under the Broadcasting Carriage Service’s investment policy, 74 % FDI is permissible for – Teleports, – Direct – to – home (DTH), – Cable Networks, – Mobile TV & Head end-in-the Sky Broadcasting Services (HITS). There is automatic route up to 49% investment and government route beyond 49% and up to 74%.  49% FDI: Under the Broadcasting Carriage Service’s investment policy, 49% FDI is permissible for Cable Networks under the Automatic route.  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.
  16. 16. FDI IN FILMS  FDI in all film-related activities such as film financing, production, distribution, exhibition, marketing etc. is permitted up to 100% for all companies under the automatic route FDI IN ADVERTISEMENTS  Government has permitted 100% foreign direct investment (FDI) in the advertising sector through the automatic route
  17. 17. FDI SUMMARY
  18. 18. FDI SUMMARY
  19. 19. HOW TO ENTER INTO INDIAN MARKET  Foreign corporations are permitted to open liaison/representative offices in India subject to approval by the Reserve Bank of India (RBI).  Foreign corporations may open branch offices to conduct activities permitted by the RBI after obtaining approval from the RBI.  Foreign corporations can set up subsidiary companies in India, subject to FDI guidelines.  Limited liability partnership (LLP) Provides more flexibility in operations compared with a subsidiary. Recently, FDI has been permitted in LLPs subject to prescribed conditions.
  20. 20. FUNDING OF BUSINESS IN INDIA  Equity share capital is a conventional method of funding a local Indian subsidiary company.  Foreign investments through convertible preference shares that are fully and mandatorily convertible into equity shares are treated as FDI.  Like preference shares, the treatment of debentures as FDI or External Commercial Borrowing (ECB) depends on their convertibility into equity shares.  ECBs can be accessed under two routes: the automatic route (without RBI approval) and the approval route (with RBI approval).  Other forms of funding include the issue of American Depository Receipts, Global Depository Receipts, and Foreign Currency Convertible Bonds.
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