New Delhi: The glitz and glamour of the country’s media and entertainment sector was overshadowed in 2007 by the one-upmanship game between the government and industry, especially over the controversial Broadcasting Bill and a content code, spurred by two incidents—a fake sting operation and an unsavoury remark by a radio jockey.

In the year that otherwise witnessed an unabated proliferation of television and FM radio channels—both crossed more than 400 and 200, respectively—the government was seen increasingly trying to impose some norms on the industry and give itself more powers to monitor and regulate the sector.

Stringent rules: Union minister for information and broadcasting Priya Ranjan Dasmunsi.

Information and broadcasting minister Priya Ranjan Dasmunsi occupied as much air time and print space as did news about the banning of TV channels such as AXN and FTV for a month. The two channels were pulled up for transmitting “vulgar content".

The electronic media, despite a collective opposition over proposals to regulate the news content, provided the government ample ammunition thanks to the fake sting operation involving Live India and New Delhi school teacher Uma Khurana in a made-up sex racket.

While the industry vociferously contested the dos and dont’s from the government, proposed in the Broadcast Bill, they were unable to defend the mandatory sharing of live feeds of sporting events of national interest with Prasar Bharati. The government had brought in an ordinance earlier in the year as private broadcaster Nimbus Communications objected to the proposal of sharing of cricket telecast feed with the public broadcaster.

Another fight that plagued the industry was with advertisers when the Indian Broadcasting Federation sought a 25% hike in fees on behalf of members to offset rising input costs. The Advertising Agencies Association of India rejected it outright, saying contracts are between channels and advertisers and no third party should be involved. As on now, status quo has been maintained, and the matter will be taken up in January by the two bodies.

Trigger factor: A file photo of Delhi policemen escorting Government Sarvodaya Kanya Vidyalaya teacher Uma Khurana out of the school premises on Asaf Ali Road in New Delhi. The electronic media, despite a collective opposition over proposals to regulate the news content, provided the government ample ammunition thanks to the fake sting operation involving Live India and Khurana in a made-up sex racket

It wasn’t just a year of battles though. The government mooted a proposal to allow more foreign direct investment (FDI) in cable and broadcasting segment on the lines of telecom sector, where 74% FDI is allowed. Also, the information and broadcasting ministry said it would lobby on behalf of the industry with the finance ministry for a slew of tax incentives for infrastructure and technological upgrade in the TV and entertainment sector.

Meanwhile, India geared up to embrace new digital technologies such as Direct-To-Home (DTH) services and Internet Protocol TV (IPTV). The DTH space saw fresh investments of about Rs3,100 crore from players such as Tata Sky Ltd and DishTV. New players such as Bharti Airtel Ltd, Reliance Communications Ltd, Videocon Industries Ltd and Sun TV Network were seen waiting in the wings.

On the radio front, the FM industry grew at 28% in 2007 compared with 18% for overall media and broadcasting industry in 2006. The number of FM radio channels increased to more than 200 in the country. Yet, the penetration of radio, number of listeners as a percentage of the population, grew by just 8% to 53%, from 45% last year.

The slow growth, according to a study by the Federation of Indian Chambers of Commerce and Industry, was due to the lack of diversity in content on FM channels, which are dishing out Bollywood-centric music, bereft of other forms of entertainment and news and current affairs programmes, is leading to disenchantment among audiences.

Like the electronic media, the radio sector also gave the government a chance to prove its point for more control when casual remarks by a radio jockey of a private FM channel, Red FM, on Indian Idol III winner Prashant Tamang created furore in Darjeeling and parts of North-east India. The channel was ordered off the air for a week by the information and broadcasting ministry though that was shot down by the Telecom Disputes Settlement and Appellate Tribunal.

The television industry continued on the expansion spree with media conglomerates such as New Delhi Television Ltd and others such as INX Media Pvt. Ltd, UTV Software Communications Ltd and B.A.G Films and Media Ltd announcing plans of launching new channels. The country now boasts of having about 400 TV channels.

At the same time, the Telecom Regulatory Authority of India allowed cable operators to pick and choose channels instead of broadcasters forcing them to buy bouquets.

All this was happening on the backdrop of a tug-of-war with the government, which wanted more powers to control the fourth estate with the Broadcast Bill and a content code. The draft Broadcast Bill proposed a code of conduct, setting up of an independent regulator—Broadcast Regulatory Authority of India—which would include government representatives.

The industry’s main contention was that such a body was not required as it was already self-regulated. The industry was near unanimous in rejecting the content code, which they saw as an attempt to fetter the autonomy of media and have instead pressed for self-regulation. After several rounds of talks with the industry, the government failed to build a consensus over the Bill, which ultimately delayed its introduction in the Parliament. “We have delayed the process of introducing the Bill as big corporate houses are opposing it," Dasmunsi said. “They (the corporate houses) like to have court directives rather than listening to the government."

Another issue that pricked the industry-government relationship was the mandatory sharing of live feed of sports broadcasts of national interest with public broadcaster Prasar Bharati. When Nimbus, the holder of the Board of Control for Cricket in India’s cricket telecast rights until 2010 for matches played in the country refused to share the live feed with Doordarshan, the government took the recourse of an ordinance to make it mandatory.

Meanwhile, the information and broadcasting ministry has begun a review of the FDI policy in the industry in consultation with other ministries concerned. Up to 20% FDI is allowed in FM radio and DTH services, while it is 26% for television news broadcasting and 49% for the cable services. In case of Internet service providers and non-news television broadcasters, 100% FDI is allowed. Despite the hurdles, the Indian media and entertainment industry is set to grow at twice the rate of the country’s gross domestic product in the coming years, driven largely by the emergence of regional players, technology and digitization, according to a report by industry lobby group The Associated Chambers of Commerce and Industry of India, and audit and consultancy firm Ernst and Young.