The recent union Budget may not have much for media and the advertising industry, yet there was a clear signal in the FM’s proposals for the next five years that new media would be of much more importance in the future and would drive growth for the industry. Lintas Media shares with DNA what could be the likely implication of some of these proposals.
Proposed: Induction of 3G spectrum — mobile TV to be enabled
Implication: Other than bringing in huge revenues for the government from the planned spectrum auction, we can expect some interesting manifestations as this technology spreads and fundamentally shifts services from simple text and audio applications to high-level, multi-media opportunities for consumers.
A significant muscle will be added to internet access too, as mobiles become 3G-enabled. Advertising will shift from basic SMS mobile marketing to more sophisticated multimedia advertising.
Proposed: Increase of customs duty on set-top boxes from nil to 5%
Implication: The apparent effect on DTH and IPTV services seems negative but from a long-term perspective, this is likely to boost domestic manufacturing of set-top boxes. This, in turn, could mean consumers getting better deals and thereby pushing the growth of digital TV further.
Proposed: Wavier of the 15% agency commission and 10% increase in DAVP rates in print and extension of exemption of customs duty on newsprint till December 2009
Implication: This means higher realisation by media and with the heightened government spending in media, this will give muscle to media houses to sustain in the slowdown in corporate spending.
Proposed: Raising of FDI limit for FM broadcasters to 24% and for DTH providers to 74%
Implication: This is clearly an invitation to spur competition in the sector as well as enable implementation of better technology and services to boost growth of these industry segments.
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