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Regulatory hurdles hamper pay-TV sector in India and China: CASBAA

India and China are ranked as the worst countries globally at forming and implementing regulatory policies for the video broadcasting industry, according to a new report from the Cable and Satellite Broadcasting Association of Asia (CASBAA).

India's television regulatory regime was given an efficiency rating of 43%, the second lowest after China, despite the two countries representing the second and third largest markets for pay-TV in the world. Their poor performance compares to the 95% grade attained by the developed markets of US and New Zealand.

Out of the other Asian nations, Hong Kong, Japan, Australia and Malaysia all fared favourably in CASBAA's study, Regulating for Growth 2011.

"Our research shows that markets where the regulatory environment is friendly have higher levels of economic activity. This benefits ancillary industries, local content creators, tax collections and enables consumers to access newer forms of technology," said John Medeiros, deputy chief executive officer and director of regulatory affairs, CASBAA.

Much improvement is needed to improve the development of the pay-TV industry in India, which is constrained by the limits on foreign direct investment, cable operator licenses, fragmentation, distribution price controls, and taxes, says the report.

"Regulation of the Indian pay-TV industry has become the most restrictive in the region, if not the world. Almost every aspect of the industry is controlled, from channel availability, retail and wholesale rates, packaging, advertising, investment and even the commercial and technical arrangements between different levels of the supply chain.

"There does not appear to be any prospect of improvement in the near future, though the possibility of widespread digitisation does hold some promise," says the CASBAA study.

In spite of boasting subscribers put by Digital TV Research at in excess of 100 million, Media Partners Asia believes the pay-TV sector contributes just 1.2% to India's national economic output. Furthermore, profit margins in the broadcasting sector fell to 13% in 2010 from 23% in 2003 – a decline which is also pinned on adverse policy measures in India.

The CASBAA report examined the effectiveness of government policies in regulating the delivery of video content over multiple networks to paying customers in 17 large pay-TV markets around the world.

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