Growth of the Media and Entertainment Sector and Law in India: An in-depth Analysis

Introduction

India is home to one of the largest and fastest-growing Media and Entertainment Sectors (“M&E”) in the global market. With one of the largest revenue-producing film industries in the world, box office revenue crossing the INR 10,000 crore mark in 2022 and a rapidly growing Over-The-Top (“OTT”) market where video OTT revenue is expected to reach INR 581.21 Bn by FY 2027 among several rapidly growing areas of media and entertainment, the Indian M&E sector has been ranked 5th largest market in the world. The Credit Rating Information Services of India Limited (“CRISIL”), an Indian consulting firm and a credit rating body that offers ratings, analysis, risk, and policy advice, in its Report estimated that the M&E Sector’s revenue will grow by 12-14% year-on-year up to INR 1.6 trillion by Fiscal Year 2024. 

It was observed that the ever-growing reliance and tectonic shift towards social media platforms continue to contribute significantly to the growth and development of the M&E sector not just in India but in the global market as well. In India, the digital media segment grew by 29% to reach a total of $5.2 billion in 2021 solely contributing 19% to the M&E revenue. Further, in recent times, there has been an enormous increase in video viewers to 497 million i.e. a 94% of smartphone users and wired broadband users. There has also been a rise in demand for regional content on TV and OTT platforms and consumption is expected to rise by 50% and 60% respectively by 2025. Therefore, there has been a significant influence on society due to the growth of the M&E sector, thereby resulting in a rise in demand for the same. 

Recently, with constant technological changes and increased growth especially due to accelerated digital adoption within the nation, M&E sectors continue to be impacted globally. Similarly, due to the constant developments, the M&E sectors are bound to face several challenges as well. Therefore, because the M&E sector contributes to the economy and society tremendously, this article aims to understand what entails the M&E Sector, how investments and incentives created by the government help the sector grow, and the existing legislations which help check various challenges and maintain positive development of the sector. 

Media & Entertainment and the Law

Media and Entertainment in India is consumed by various audiences belonging to varied demographics and through various avenues such as TV, film, out-of-home (OOH), radio, animation, visual effects (VFX), music, gaming, digital advertising, live events, filmed entertainment, and print. 

Given the varied nature of avenues and platforms through which media is consumed in the country, it is inevitable that rights of groups and individuals involved with the sector such as consumers, viewers, creators, producers, directors, animators, musicians, gamers, entertainers, actors, etc. could severely be misused through plagiarism, defamation, piracy, concerns of free speech, copyright infringements, religious and cultural sentiments, etc. 

To overcome such challenges and help regulate every action adopted by the sector, there exist several legislations. Some of such rules are introduced with a conscious intention to regulate the sector whereas some have been updated to accommodate changes caused due to constant developments in the digital sphere. 

Primary Source

All rights related to M&E find their primary sources in parent laws such as the Constitution of India, 1950, emphasizing Article 19(1)(a) that guarantees the right to freedom of speech and expression. As the principal function and purpose of media and entertainment is “expression”, most rights find their roots under this Article and are henceforth protected in the form of a fundamental right from infringements within reasonable limits. The Indian Penal Code, 1860, and The Code of Criminal Procedure, 1973 lay down penalties upon infringement of rights such as criminal defamation, piracy, a violation against property, etc.  The Code of Civil Procedure, 1908 lays down several civil remedies for infringements of civil rights such as civil defamation, hurting cultural or religious sentiments, etc.  

Specialized Laws

However, over the years, with the growth of the M&E industry and the lacuna in the law, the need for more specialized laws arose to regulate actions more effectively. As a result, several laws exist that help regulate content in mediums of exhibition such as the cinemas, television, and internet platforms such as The Cinematograph Act of 1952, The Cable Television Network (Regulation) Act of 1995, and the Information Technology Act of 2000. 

Furthermore, with the expansion of intellectual property rights and its growing influence within media, laws such as the Copyright Act of 1957 and The Trademarks Act of 1999 widened the scope of remedies within the M&E sector and filled in the lacuna in the law. It introduced more rights and protected artistic works, trademarks, etc. 

These laws have also set up several regulatory bodies that further help develop new policies and schemes to assist the sector. Some of these include the Telecommunication Regulatory Authority in India (“TRAI”), The Central Board of Film Certification – that mainly deals with TV/Film certification and censorship, The Advertising Council of India – which regulates advertisements, etc. 

New Amendments & Developments

The M&E Sector has grown rapidly over recent years and continues to be one of the biggest contributors to the growth of the Indian economy. A major factor for such extensive growth is various new policies and schemes introduced by the Indian government that focuses on facilitating efficient growth of the sector and help in lessening the gaps in the law. 

For instance, in 2022 the National Film Development Corporation of India, a public sector undertaking under the Ministry of Information and Broadcasting, introduced a scheme that provides incentives for the shooting of foreign films in India. It aims to create an environment for sustained growth of the sector to promote global collaboration in filmmaking and facilitate film shootings by domestic and international filmmakers in India. As per the policy, any international production company is eligible to seek reimbursement i.e. an incentive provided by the Ministry of Information and Broadcasting to reimburse 30% of Qualifying Production Expenditure along with a 5% additional bonus for employing 15% or more manpower in India and a maximum of up to INR 50 Lakhs as an additional reimbursement. 

Furthermore, regulatory authorities have constantly brought in newer amendments to fill in the lacuna in the law and accommodate the digitization of media and entertainment. The recent Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff (Third Amendment) Order, 2022, is a set of amendments made to the 2017 Order by the Telecommunication Regulatory Authority in India (“TRAI”). The 2017 Order was necessitated with the complete digitization of Cable TV network in India. However, due to certain legal challenges, the Order was further amended in 2020 and now recently in 2022. This shows the government’s and its authorities’ intention of constantly working towards introducing better and more effective changes to existing laws to ensure keeping up with the changing trends.

Similarly, several policies and schemes such as the Guidelines for Platform Services offered by Multi-System Operators and Incentives for Audio Visual co-production with foreign companies introduced in 2022, and a draft proposal for a National Policy for the specific Growth Animation Visual Effects, Gaming, Comic and Extended Reality Sector in India introduced in early 2023, further acts as a proof for the case in point. Hence, there exist several laws that ensure a smooth and effective functioning of the sector and have also contributed to the growth of the sector and the law. 

Growth

Due to constant adaptation to changing trends and digitization of M&E, the scope of the sector has widened two folds and has resulted in massive growth. Another significant reason that may be attributed to its growth is the rise in government, foreign and private investments. For instance, it was announced that there’s been nearly up to $9.85 billion of Foreign Direct Investment (“FDI”) and 1.6% shares in FDI inflows in Information and Broadcasting (including Print Media) between April 2000 – September 2022. Furthermore, the Union Finance Minister recently announced an INR 4,692 crore outlay for the Ministry of Information and Broadcasting for 2023-24 as against INR 4,182 crore in the revised estimates for the last fiscal year. These major investments have not only helped in the growth of the industry and said returns, but it has also opened job opportunities and avenues within the sector. 

There has also been significant growth in contracts and mergers entered into by production companies, not just domestically but internationally as well, such as the recent Jio Cinema OTT and Viacom18, PVR cinemas entering into several agreements for the increase of multiplexes within the country, etc. thereby building more harmony and creating more avenues for further investments. 

The Government has also single-handedly taken several initiatives to help increase the growth of the industry and facilitate better incentives protecting the interests of the sector. Recent initiatives include digitizing the cable distribution sector to attract more pronounced institutional funding by increasing the FDI limit from 74% to 100% in the cable and direct-to-home satellite platforms, and also by granting industry status to the film industry for easier access to institutional finance. Further, in 2020, the Government announced its plan of action to develop an Animation, Visual Effects, Gaming and Comic (AVGC) Centre for Excellence in collaboration with IIT Bombay. 

It could be positively argued that a rise in investment opportunities, government initiatives, and the creation of newer avenues in the sector is facilitated because of the adoption of more favourable policies and schemes. 

Conclusion 

In conclusion, with the growth of the M&E industry, Media and Entertainment Law in India has also gradually kept up with the pace of the rapidly growing sector and continues to advance alongside it. With technological changes, and increased growth especially with the rise in social media usage, M&E sectors globally have been impacted and continue to be impacted. With this backdrop considering India’s M&E ranking globally leaves a huge mark. 

However, growth and development bring challenges along with it, which surely the Indian M&E sector has not been immune to. Recent events have shown that legal challenges such as violations of free speech and expression, unreasonable restrictions through strict censorship laws, piracy, etc. continue to persist and challenge the industry and its functioning despite the existence of a legal structure in place in the form of legislation and policies. 

Considering how the industry with the help of existing laws has continued to grow, it must persevere in the face of adversity to further prosper. With a small shift in focus towards responding to the challenges in a positive light, as it has since its inception, it is sure to grow to newer heights and be supported by the ever-growing and developing law.

Endnotes 

1. India OTT Market Report 2021-2027, Business Wire (Jan. 27, 2023)
   https://www.businesswire.com/news/home/20230127005305/en/India-OTT-Over-the-top-Market-Report-2022-
   2027-Growth-is-Being-Driven-by-the-Low-Cost-of-Data-Plans-and-the-Rise-of-Short-form-Content—
   ResearchAndMarkets.com#:~:text=The%20video%20OTT%20market%20was,FY%202023%20%2D%20FY%
   202027%20period.
2. Media and Entertainment Industry in India, Invest India – National Investment Promotion and Facilitation
   Agency (Feb. 10, 2023; 13:00)
   https://www.investindia.gov.in/sector/media#:~:text=India's%20Media%20%26%20Entertainment%20industry%20is%20expected%20to%20grow%20to%20%2455,%2C%20Gaming%2C%20Animation%20and%20VFX.
   &text=The%20overall%20TV%20sports%20market,a%20steady%20CAGR%20of%207%25.
3. Explanatory Note: The Reserve Bank of India (RBI) recognizes CRISIL Ratings as an external credit
   assessment institution (ECAI) for bank loan ratings, and banks use CRISIL's ratings to assign risk weights to
   their corporate loan exposures.
4. Press Release, CRISIL Ratings, Media & Entertainment revenue to grow by 12-14% next fiscal, (Jan 03, 2023)
   https://www.crisilratings.com/en/home/newsroom/press-releases/2023/01/media-and-entertainment-revenue-to-
   grow-12-14-percent-next-fiscal.html
5. Ministry of External Affairs – Government of India, Economic Diplomacy Division, M&E Sector to reach INR
   1.6 trillion in FY24: CRISIL (Jan.4 2023) https://indbiz.gov.in/me-sector-to-reach-inr-1-6-trillion-in-fy24-
   crisil/#:~:text=India's%20media%20and%20entertainment%20(M%26E,a%2016%25%20growth%20in%2020
6. id at ii
7. The Constitution of India, 1950, No. 1, Acts of Parliament, 1950
8. INDIA CONST art. 19 cl. 1
9. The Indian Penal Code, 1860, No. 45, Acts of Parliament, 1860
10. The Code of Criminal Procedure, 1973, No. 2, Acts of Parliament, 1974
11. The Code of Civil Procedure, 1908, No. 5, Acts of Parliament, 1908
12. The Cinematograph Act, 1952, No. 37, Acts of Parliament, 1952
13. The Cable Television Network (Regulation) Act, 1995, No. 7, Acts of Parliament, 1995
14. Information Technology Act, 2000, No. 20, Acts of Parliament, 2000
15. The Copyright Act, 1957, No. 14, Acts of Parliament, 1957
16. The Trademarks Act, 1999, No. 47, Acts of Parliament, 1999
17. National Film Development Corporation of India, https://www.nfdcindia.com/ (Feb. 10, 2023; 14:00)
18. National Film Development Corporation India | Film Facilitation Office, Guidelines on Incentives for shooting
    of foreign films (2022), https://static.investindia.gov.in/s3fs-public/2022-07/final-Incentives-Guidelines-for-
    Foreign-film-shooting-sent-by-NFDC%281%29.pdf/
19. Explanatory Note: As per sub-section 4.1 of the scheme (id. xviii) QPE is expenditure incurred by the
    Applicant (on behalf of International Producer or otherwise) wholly in respect of the applicable pre-production,
    production (incl. Principal Photography) and post-production, and attributable to the categories of goods and
    services sourced and/or provided in India as set out below.
20. Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff (Third
    Amendment) Order, 2022, No. 4, Acts of Parliament, 2022