Operating margins of Indian TV industry fall by half
By siliconindia   |   Wednesday, 13 October 2010, 23:38 IST   |    1 Comments
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Operating margins of Indian TV industry fall by half
Bangalore: Comparing the TV market of the BRIC (Brazil, Russia, Indonesia and China) nations, Indian TV market scores high on growth and volumes. Unfortunately, the operating margins of the world's second largest TV market have slipped from 25 percent to 13 percent over the past four years. According to a report released by Media Partners Asia, growing competition and capital intensity along with poor regulation are degrading value in the business. Indian media has been quite dependent on advertising and it could penetrate the Indian market. This model was followed for quite a long time till money was flowing through advertisements. But now due to the slowdown in growth and higher costs, the industry has faced a remarkable shift and is finding it difficult to deal with the problem. Till the ad revenues did not drop, most broadcasters did not even bother to fix the problem. The Telecom Authority of India (TRAI) has made some sensible recommendations on how to fix the issues related to the $6 billion TV industry in India. Its entire focus seems to be on micromanaging pricing, technology and rating points, instead of worrying about incentivising investment or getting a good piece of broadcast legislation through.

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