MIB relaxes net worth rules for ‘Downlink Only’ satellite TV channels

In a major reprieve for Indian agents/representatives of downlink-only TV channels, the government has offered some relaxation in the networth norms for such domestic companies.

In an uphaul of old rules, the Uplink and Downlink Guidelines were updated late 2022 with the networth requirement of the company responsible for downlinking a foreign TV channel into India increased susbstantially; especially those responsible for news channels where the networth was upped from Rs. 5 crore to Rs. 20 crore for the first channel with subsequent increment for every additional news channel.

In an office note, dated Septemebr 1, the Ministry of Information and Broadcasting took note of the difficulties of medium-size Indian companies who acted as reps of foreign news channels and were responsible for their downlink into India.

The MIB note said, “The net worth requirement for ‘Downlink only’ TV channels will be exempted from the increase as mandated in the Policy Guidelines of 2022 only if the permission holder is in the nature of an agent/ distributor and not a content creator/aggregator.”

Industry experts said that those foreign TV channels— news or non-news — that had Indian subsidiaries acting as the downlink agents are not likely to benefit from the government relaxation in company networth levels.

Enumerating the rationale for giving this relaxation, the government said that existing permission holders pointed out that they served as exclusive distributors of ‘downlink only’ TV channels and were mere intermediaries responsible for TV channel distribution to DTH and cable operators. They did not engage in content creation or had editorial control. Their function was essentially that of a conduit for transmitting content and, thus, the “need for a high networth was unwarranted”.

“For international channels, it has been pointed out that the downlinking permission is obtained through a local agent. The agent’s primary responsibility is to ensure compliance with regulatory guidelines and distribute the channel to operators. Their income primarily comes from distribution fees, making their role more about logistics and administration rather than substantial financial investment.

“These distributors do not engage in producing or curating content, eliminating the need for investment in content creation infrastructure. As a result, the financial burden associated with maintaining a significant net worth is disproportionate to their role and responsibilities,” the MIB note said, highlighting the contention made by companies that were responsible for downlinking of foreign TV channels and acted as their agents in the country.

‘Downlink only’ distribution is often an attractive business venture for micro, small and medium enterprises (MSMEs) due to its manageable operational requirements and revenue potential. Imposing a high networth requirement could deter such entities from entering the market, limiting healthy competition and innovation, the industry stakeholders had contented while seeking relaxation from the revised Uplink/Downlink Guidelines 2022. Indian Broadcasting World