India needs to focus more on digital infrastructure: James Murdoch

With digitization, the Indian industry will finally have the incentives to invest and create. Even more important, local customers will have the content and choice—worthy of the nation’s rich diversity

India has around 120 million TV households and yet there are only about 30 million home which have digital channels. This shows the need for the country to focus more on creating digital infrastructure said James Murdoch, chairman and chief executive, News Corp, Europe and Asia.

Speaking at the FICCI FRAMES 2011 in Mumbai today, he said, "Digitisation brings content distribution and connectivity together-and helps them come alive. That is why the nations most determined to modernise their economies have put digital infrastructure at the top of their priorities. Digitization needs funding, it's true. So it is crucially important to relax investment and ownership regulations and align them to this objective."

Though India has a large population, its creative potential remains below expectations. "If India's economy had a creative sector on the scale, relative to overall GDP, of Britain's, for example, instead of a $15-billion industry we would be talking about a $120-billion industry," Mr Murdoch said.

"Digitisation is the key to unlocking the potential of the creative sector. With digitisation, the Indian industry will finally have the incentives to invest and create. Even more important, Indian customers will have the content and choice worthy of their nation's rich diversity. The second area is what we can do to bring Indian creators, storytellers, and journalists to the world's conversations. And this can only be done by ensuring that India's creative market is competitive at home," he added.

AT present there are 550 TV channels in the country out of which around 400 are active. There are 106 channels which still use the analogue system to broadcast signals to 90 million homes. In addition, there are 300 TV channels ready to start broadcasting the moment they get licenses. Due to the dearth of digital infrastructure, broadcasters are forced to use analogue system and pay more money as carriage fees.

Mr Murdoch said, "When competition is stifled by infrastructure, the scarcity of bandwidth drives the operator to price channel placement instead of investing in greater capacity. This makes things more expensive for the channel operator who has to recoup that higher cost out of advertising, spread ever so thinly across a fragmenting audience."

India is a young country-and there are more mobile devices than TV sets in country. In order to reach out more to the audience, content providers from the media need to cater to this segment as well.
"In India, there is more demand and scope for content for handheld devices," said Sachin Pilot, minister of state for communications and IT. He assured all possible help to the media and entertainment industry from the government.

During the inaugural session, FICCI and KPMG released a report on Indian media and entertainment (M&E), which expects the segment to grow at a compounded annual growth rate (CAGR) of 14% to $28 billion by 2015, due to positive industry sentiment and growing media consumption. (Read FICCI-KPMG expects Indian media and entertainment industry to touch $28 billion by 2015:).

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