Category: Software

MUMBAI: Tata Sky will take 5-7 years to break even and plans to further invest Rs 20 billion to ramp up its direct-to-home (DTH) business.

“We have already invested close to Rs 10 billion. We will pump in a further Rs 20 billion,” says Tata Sky CEO and MD Vikram Kaushik.

There is a hardware and content subsidy and it will take us 5-7 years to break even, he adds. Tata Sky charges Rs 3999 for hardware and installation cost while the subscription fee is Rs 300 per month.

The DTH service provider has a subscriber base of half a million and expects to benefit largely from the ICC cricket World Cup with its free subscription promotional scheme for the next three months.

It has roped in actor Hrithik Roshan for its new marketing campaign where select viewers would get to watch the World Cup final match with him.

“We are on course to achieve our target of one million subscribers in our first year of operations. We have activated half a million boxes. The World Cup should give us a spurt as we have interesting value-added features. In the Cas (conditional access system) areas, we have also seen a rise in demand for our service,” says Kaushik.

Tata Sky hopes to add on the Sun network channels soon. “There was a hearing in the court today. The final hearing will be before the first half of March,” says Kaushik.

MUMBAI: Kalanithi Maran‘s Sun Direct TV has secured government approval to induct 20 per cent foreign equity worth $150 million. Malaysia-based Astro is making the investment in the direct-to-home (DTH) venture through its wholly owned subsidiary company South Asia Entertainment Holdings Ltd (SAHEL) of Mauritius.

The cabinet committee on economic affairs gave its nod today to Sun Direct to issue equity shares to SAHEL. The approval is subject to guidelines issued by the ministry of information and broadcasting.

Sun, which was waiting for a satellite and regulatory approvals, can be ready to kick off its services after Insat-4B launches on 10 March.

NEW DELHI: Broadcasters have expressed the hope that the government will ease the taxation structure for the initial three to five years and introduces policies that promote domestic manufacturing of set top boxes because the high import duty and taxes like octroi and other taxes were acting as a bottleneck in smooth transition to digitalization.

Zee Turner CEO Arun Poddar told indiantelevision.com today that irrational rates were dissuading Indian entrepreneurs from investing in the production of STBs. He hoped the government would introduce policies that promote domestic manufacturing of STBs.

Listing his expectations from Union Budget 2007-08 being presented on 28 February, Poddar appealed for doing away with double taxation from broadcasters. He said since media was part of the entertainment as well as a service industry, broadcasters were charged both entertainment tax and service tax.

He said the entertainment industry was in the transition mode from analogue to digital and it was extremely imperative for the government to take steps that not only accelerate the process but also make this industry an interesting and appealing investment proposition for Indian manufacturers.

Service tax remained one of the crucial and unresolved issues in the entertainment industry and should be sorted out in the forthcoming Union budget. While service tax is levied on the electronic media, the print media is exempted from any such taxation. This is despite the fact that both print and electronic fall under media and entertainment industry. There was therefore need to create a level playing field for all, and take measures to bring electronic at par with print media.

“The 400,000 exemption limit from service tax has led to ‘appalling confusion and dissatisfaction‘. While the last mile cable operators are able to take undue advantage of this exemption limit, multi system operators (MSOs) and broadcasters were being penalized,” Poddar said. The last mile cable operators conveniently avoid passing the service tax to MSOs by under declaring their subscriber base by almost 80 to 85 per cent. MSOs and broadcasters paid service tax but could not recover this from the last mile operators.

He expressed the hope that the government would bring about clarity on how service tax should be charged or should waive the exemption limit completely.

MUMBAI: Casbaa lauded the Philippines Department of Justice (DoJ) for its recommendation in filing of 12 criminal cases under the “information for copyright infringement” law against cable operator Maguindanao Skycable CATV and its directors and officers.Speaking on behalf of the Casbaa members who filed complaints with the DoJ against Maguindanao Skycable, Casbaa said the DoJ had strengthened the industry‘s faith in a government commitment to protect intellectual property rights.“With this decision, the DoJ strongly demonstrates the Philippine government‘s strong political will to address the worsening pay-TV piracy situation. We are pleased with this development and eager to see the prosecution of the complaints,” said Casbaa CEO Simon Twiston Davies.

Casbaa and its members filed the complaints against Maguindanao Skycable for illegally acquiring and transmitting copyrighted programming from channels-AXN, CNN International, Cartoon Network, Discovery Channel, the Disney Channel, ESPN Star Sports, HBO Asia, MTV Asia, National Geographic, Star Movies, Star World, and Star Sports.The complaints were filed based on evidence gathered by the National Bureau of Investigation – Intellectual Property Rights Division (NBI-IPRD) following a period of intensive surveillance and a raid on Maguindanao Skycable‘s offices and head-end in Cotabato City in southern Philippines.

Under the Phillipines Republic Act the accused persons who have illegally transmitted copyrighted programs face a jail term of up to three years and fines amounting to Php 150,000 for the first offense. The courts may also order a convicted operator to pay damages for economic losses resulting from the unauthorized broadcasting of copyrighted programs. The Philippine Cable Television Association (PCTA) also welcomed the DoJ resolution, saying it is a “positive step towards creating a competitive Philippine pay-TV market that provides a level playing field for cable operators”.

NEW DELHI: The Telecom Regulatory Authority of India (Trai) has take up the demands of stakeholders in the broadcasting industry and recommended to the Finance Ministry that there is a need for tax rationalisation. The chief amongst which is abolishing of customs duty on import of components for the local manufacture of STBs.

MSO sources tell indiantelevison.com that Trai has suggested to the ministry that it should ensure a level playing field in the interest of digitalisation of cable television, which has seen increased demand after the rollout of Cas.

For the benefit of the consumers, Trai has also suggested that Entertainment Tax be abolished from the cable TV sector.

Trai has argued, as the MSOs had desired, that this is the only industry in which both service tax and entertainment tax are levied, the latter going to the state governments, and suggested that instead of the extra entertainment tax burden, there should be evolved a system of sharing a part of the service tax with the state governments.

These sources say also that Trai has for the first time written to the government of the reports the industry has been filing since the middle of January this year, that after Cas rollout, the interest in digitalised TV has vastly increased, and Trai says that there are requests from areas not covered under mandatory Cas for the same system being introduced.

The issues were discussed in a roundtable between Trai, the MSOs and other stakeholders earlier this month.

Trai has written to the government, sources requesting anonymity tell indiantelevision.com, that the stakeholders desire rationalisation of tax structure, because greater convergence in broadcast and telecommunication technologies in the near future would result in the distinction between the two services getting increasingly blurred.

Hence the need for a level playing field, which in turn could not be brought about without required rationalisation of taxation in the two sectors.

Trai feels that the current additional customs duty of 4 per cent on components of set top boxes and associated items like viewing cards should be abolished, just as has been done for the components and parts of cellular phones and mobile phones.

The Trai wishlist sent to the MoF, sources say, recommends the complete removal of basic customs duty on imported digital headend equipment from the present 12.5 per cent, to improve penetration in the country as a whole.

Trai says this is quite in line with the abolition of duty on import of STBs done in 2006.

The MSOs say that they had desired that though excise duty is currently levied on the transaction value of STBs, which are sold as packaged commodity, in the same manner as mobile phones, televisions and cameras, but wherever required manufacturers may be given the option for the scheme on which excise duty is levied on the basis of MRP, with an abatement of 40 per cent.

Presently, this is applicable to other packaged commodities, and Trai has sent this as part of the recommendation to the ministry as well.

In consonance with the wishes of the MSOs and other stakeholders, Trai has also suggested that the telecom department has demanded reduction of excise duty on telecom equipment to 8 per cent, and this same should be applicable to manufacture of STBs.

The stakeholders had told Trai that this would be necessary because with greater convergence of technologies, it would be tough to distinguish between the services.

There is another tricky issue on excise duty. MSOs say that the premises of the subscriber where the set top box is deployed should be treated as the extended premises of the service provider and the STBs at the premises of the subscriber be treated as the possession of the service provider.

This would enable them to avail a set-off of excise duty paid, against its service tax liability.

BKN International AG signed an agreement with NASDAQ listed Digital Music Group (DMGI) to handle all USA and Canada digital rights for current and upcoming BKN films and series. The announcesment was made by BKN CEO Allen Bohbot, CEO and DMGI CEO Mitchell Koulouris.

The deal includes BKN series such as Legend of the Dragon, Dork Hunters from Outer Space and Zorro – Generation Z and films such as Jungle Book – Rikki-Tikki-Tavi to the Rescue, Robin Hood – Quest for the King and Kong – Return to the Jungle.

“Having an organization like DMGI with expertise in handling all digital rights in the key USA and Canada markets is very important to us,” said Bohbot.

He further added “DMGI provide access to new stores particularly online retailers including iTunes Music Store, Google Video, RealNetworks, Napster, Wal-Mart Music, and Yahoo! which will enable kids to view our shows on these channels.”

“BKN‘s list of film and television productions is impressive in both its scope and tremendous success with audiences,” said Koulouris. “DMGI is looking forward to working with BKN to maximize the earnings potential on their entire list of productions.”

MUMBAI: BT announced that it has been granted international long distance (ILD) and national long distance licenses (NLD) by the Department of Telecommunications, Government of India. These licenses enable BT‘s newly-formed joint venture company, BT Telecom India Pvt Ltd, to offer services for the first time directly to multi-site corporate customers in the Indian market.

BT plans to provide corporate customers who have sites in India with virtual private network-based (VPN) services using technologies such as internet protocol-based multi-protocol label switching (MPLS) and ATM.

BT Global Services CEO Andy Green said, “This is fantastic news, allowing BT to establish and manage our own operations in India. It‘s also great news for our multinational customers doing business in India and our Indian customers wanting to access a BT-managed network which is connected to BT‘s comprehensive global network across Asia Pacific, Europe and North America.”

Minister of Communication and IT M Maran said, “To further promote investment into India and enhance business opportunities for Indian companies operating overseas, India must have the best and latest infrastructure. These licenses will allow BT to bring its 21 CN services to India‘s IT and ITES sector and increasing their competitiveness through connectivity, availability, quality and responsiveness on a global scale.”

The company also predicted in 2006 that its revenues from India will be US$250 million by 2009 and that it is looking to increase its Indian employee strength by hiring an additional 6,000 people within the next two years. In February 2007, BT signed an agreement for the acquisition of i2i Enterprise Pvt Ltd, a Mumbai-based enterprise services company specialising in internet protocol (IP) communications services for major Indian and global multinational companies.BT also plans to add additional resources to support its already substantial capabilities in outsourcing and systems integration services.

MUMBAI: Japanese media conglomerate Sony has announced that users of the PlayStation 3 will shortly be able to download Sony movies and television shows on their gaming console.

Sony made this announcement to hype the launch of the PlayStation 3 in Europe as well as push more sales of the system in the US.

In creating a movie and music download service for the PlayStation 3, Sony will be putting itself in competition most directly with Microsoft and the Xbox 360 platform. The inclusion of a hard drive in the PlayStation 3 is part of a larger strategy to boost the PlayStation‘s presence as an entertainment hardware device, rather than just a game machine.

MUMBAI: US media conglomerate Viacom and broadcast-quality Internet television service Joost have announced that Viacom will be a key content partner.

It will offer a range of brands and programming for free to consumers on the Joost distribution platform.

Under the agreement, Viacom’s divisions – MTV, Bet and Paramount Pictures – will provide television and theatrical programming on the Joost platform. Founded by Niklas Zennström and Janus Friis who were behind Skype, Joost is powered by an Internet platform that enables premium interactive video experiences while guaranteeing copyright protection for content owners and creators. The financial terms of the deal were not disclosed.Joost will allow users to have free access to thousands of programs and channels not readily available on the Web. Through Joost, viewers can watch programming from many of Viacom’s brands on their computers through a customizable platform with advanced television viewing features such as links that lead to more information or related websites based on the content; and a variety of plug-in applications, such as instant messaging, message boards, and news tickers.

Currently available in limited beta, Joost combines TV and the internet by offering viewers a TV-like experience. Joost is the first online, global TV distribution platform, bringing together advertisers, content owners and viewers in an interactive, community-driven environment, according to an official release. MTV will offer shows, both past and present, including Laguna Beach, Beavis and Butthead, Real World. Comedy Central will feature episodes from Stella, CCP’s and Freak Show. Nickelodeon, CMT: Country Music Television, MTV2, Logo, Spike TV, mtvU, and Gametrailers.com will also provide content. VH1‘s offerings will include episodes of Flavour of Love, Surreal Life and I Love New York.

NEW DELHI: While demanding various reductions and exemptions of taxes and duties that would be beneficial for the media and broadcasting industry in general, the Confederation of Indian Industry (CII) has demanded a hike in customs duty on STBs from the present nil to 5 per cent.

The CII has demanded exemptions and tax burden relief on capital goods import and other issues, especially those meant for infrastructure development, creation of intellectual property and import of colour TV and picture tubes.yet, so far as STBs are concerned, the CII says that whereas in the present situation, import of STBs do not attract any customs duty, this should be raised to five per cent in the budget for 2007.

The CII, in its document “Pre-Budget Memorandum” gives its own arguments on that count.It says: “Excise Duty on STBs was exempted on 24th June 2003 to facilitate introduction of Conditional Access System in the country. In the budget 2006, the exemption on excise duty was withdrawn but customs duty was reduced from 15 per cent to Nil. However, there was no corresponding reduction of customs duty on inputs used in the manufacturing of STBs. This has resulted into another case of inverted customs duty structure.“The correction of the anomaly can be achieved either the by reduction of customs duty on inputs required for manufacturing of STBs to Nil, or increasing of customs duty on the import of STBs from Nil to 5 per cent, and also allowing import of inputs at five per cent.”A senior tax consultant told indiantelevision.com that the measure would benefit local manufacture of STBs, as the customs duty on import of boxes and import of input components would be the same, whereas previously, there was no customs duty on import to STBs.

Currently, MSOs are importing STBs mainly from China and Korea.“This is a pro-local manufacturing and necessary corrective measure from an earlier skewed customs regime so far as STBs are concerned,” he explained.The CII recommendation says that the second option is preferable.It says also: “In case it is felt that it would increase the price of imported STBs, then excise duty can be reduced from 16 per cent to 12 per cent on STBs as well as its major imported inputs.Meanwhile, there are many general recommendations of the CII that would benefit the industry. It has specifically suggested that the customs duty on glass parts of the colour picture tubes for TV sets should be reduced from 12.5 per cent to five per cent.It has argued here that the Free Trade Agreement between India and Thailand has a list of goods covered by the Early Harvest Scheme and includes CTV and colour picture tubes. “Consequently, customs duty on CTV (8528 12) and CPT (8540 11) imported from Thailand was reduced to 12 per cent on September 2004, and to 6.25 per cent on September 1, 2005. The impact of (this) reduction has resulted in tremendous increase of imports (from Thailand).On the telecom sector the CII has recommended that there should be a reduction of customs duty to five per cent on capital goods required for manufacture of telecommunication equipment covered by the IT agreement.It also wants to extend the present “Nil” customs concession to inputs for the manufacture of components / sub assemblies duty under serial number 239 of customs notification 21/2002.Across the board, CII has recommended measures that will benefit industry as a whole and consequently the media and broadcasting industry. It has, for instance, recommended reduction of CENVAT rate of 16 per cent to 14 per cent in the budget 2007, and has also said that the service tax of 12 per cent must not be increased.On the issue of infrastructure development CII has suggested that the government may consider more loans from international institutions.“Gross Capital Formation in infrastructure must be progressively raised from 4.5 per cent of GDP to 11 per cent,” the report of CII says.In general, all companies and employees may stand to benefit also if the CII recommendation of abolishing of Fringe Benefit Tax (FBT), in consonance with the desires of business as a whole, ever since the tax was slapped vide the Finance Act 2005. It outlines the alternative thus:“Either the tax should be abolished or the choice be given to tax paying firms to pay one per cent additional corporate tax on its total income in lieu of FBT. Otherwise the corporate could chose to remain under FBT. If this is not possible, the CII proposes levy of FBT only on elements of personal benefit to employees, and exclusion of deeming provision of treating a portion of pure business expenses as personal expenses.”The CII recommendation on depreciation would also benefit the media and broadcasting industry. Stating that it is well known that technology is changing fast, “and unless we are able to replace our assets fast, we cannot match with other countries in terms of productivity, CII has recommended that depreciation rate be raised from 15 per cent to 25 per cent, as was the case earlier, provided the rate charged under Income Tax is the same or higher than charged under the Companies Act.Development of infrastructure would also benefit from the industry body recommendation that the Minimum Alternative Tax is abolished. If it is not, CII feels, it should at least be removed for infrastructure companies in order to promote development and to motivate the private investor to come into this sector.