1. Presented by A. Mohan Executive Vice President Zee Network, India amohan@siti.esselgroup.com Information Meeting on Developments in Broadcasting Standing Committee on Copyright And Related Rights Eighteenth Session Geneva, May 25 to 29, 2009

2. This presentation depicts the personal views of the speaker and should not be treated as the views of the Company. 2

3. Overview of Indian Broadcasting Scenario Indian Broadcasting Industry - largest in Asia. >300 channels of different genres viz. entertainment, movies, news & current affairs, sports, music, religious, infotainment are available over Indian Sky. Channels in different languages are also available to cater to the requirements of regional viewers viz. Tamil, Telgu, Marathi, Punjabi, etc. In Radio segment besides All India Radio (AIR), city specific licenses have been given for FM Radio channels e.g. Red FM, Radio Mirchi, Big FM, Radio City, etc. 3

4. Structure of Television Broadcasting Industry 4

5. Overview of Indian Broadcasting Scenario Over 16 Major Teleports ( Uplink and DTH) 150+ channels uplinked out of India. M&E Industry (US$ Billion) 20082013 PCAGR % (2009-13) TV 5.019.85 14.5% Print 3.605.54 9.0% Film 2.283.51 9.1% Radio 0.180.34 14.2% Music 0.150.22 8.0% Animation 0.360.82 17.8% Gaming 0.140.57 33.3% Internet Ad. 0.130.45 27.9% Outdoor 0.340.61 12.8% Total Size 12.1721.92 12.5% Sources: Group M, KPMG Interviews, KPMG Analysis 5

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8. TV Industry (US$ bn) 2008 E2013 PCAGR (2009-13) Subs. Revenues 3.296.61 14.9% Ad. Revenues 1.723.24 13.5% Total Industry Size 5.019.85 14.5% Terrestrial – under exclusive domain of Parsar Bharti - Public broadcaster Doordarshan beaming about 28 no. of channels started transmission in 1959. BROADCASTING Satellite – Free To Air Channels – source of revenue - advertisements Pay Channels (subscription based) e.g. Zee TV, Star, Sony, ESPN, CN, etc. – source of revenue – subscriptions & advertisements In analogue mode pay channels are encrypted upto MSO/LCO and thereafter delivered to subscriber in FTA mode through a single pipe. In digital delivery like DTH & CAS pay channels are delivered in encrypted mode and are decrypted through STB at subscribers premises. Video channels through cable Mainly transmitted by MSOs and cable operators at local level through cable networks. 8

9. FDI Limits in Broadcasting Industry Sl. No. SegmentExisting limitEntry Route Recommended limit by TRAI Remarks 1.Teleport (Hub)49% (FDI+FII)FIPB74% (FDI+FII)In Carriage segment of broadcasting sector i.e. cable TV, DTH, HITS, teleport, mobile TV etc. foreign investment up to 49 percent should be on the automatic route and above 49% through FIPB. However for content segment FIPB approval would be required 2.DTH49% (FDI+FII) FDI not to exceed 20% FIPB74% (FDI+FII) 3.Satellite RadioNo Policy as on dateFIPB74% (FDI+FII) 4.HITSNo Policy as on dateFIPB74% (FDI+FII) 5.Cable Network49% (FDI + FII)FIPB49% (FDI+FII) 6.FM Radio20% (FDI + FII)FIPB49% (FDI+FII) 7.TV Channels (News & Current Affairs channel) 26% (FDI + FII)FIPB49% (FDI+FII) Press Note no.2 (2009 Series) – DIPP, Ministry of commerce & Industry, GOI 5.2 Counting of Indirect foreign Investment The foreign investment through the investing Indian company would be considered for calculation of the indirect foreign investment if the investing company is owned or controlled by non resident entities and in such an event the entire investment by the investing company into the subject Indian Company would be considered as indirect foreign investment. 9

10. Uplinking & Downlinking Guidelines of MIB Uplinking Guidelines Setting up of Uplinking hub/ teleport A company registered in India under the Companies Act, 1956. The foreign equity holding including NRI/OCB/PIO should not exceed 49% should meet prescribed minimum Net Worth criteria, pay fee as per number of channels capacity. The applicant company shall obtain registration for each channel, in accordance with the procedure laid down under the Downlinking Guidelines notified by the Ministry of Information & Broadcasting separately. Uplinking of non-news and current affairs channel The applicant company, irrespective of its ownership, equity structure or management control, would be eligible to seek permission, should meet the prescribed minimum Net Worth criteria, pay fee as per number of channels capacity. Uplinking of news and current affairs channel Foreign Equity holding including FDI/FII/NRI investments should not exceed 26% of the Paid Up equity of the applicant company, should meet prescribed minimum Net Worth criteria, pay fee as per number of channels capacity. At least 3/4 th of the Directors on the Board of Directors of the company and all key Executives and Editorial staff shall be resident Indians 10

11. Uplinking & Downlinking Guidelines Downlinking Guidelines: The entity uplinking from abroad must be a company registered in India under the Indian Companies Act, 1956, irrespective of its equity structure, foreign ownership or management control and must have a commercial presence in India with its principal place of business in India Must either own the channel it wants downlinked for public viewing, or must enjoy, for the territory of India, exclusive marketing/ distribution rights for the same and authority to conclude contracts on behalf of the channel for advertisements, subscription and programme content. The applicant company should meet the minimum net worth criteria. Shall adhere to any other Code/Standards guidelines/restrictions prescribed by MIB, GOI for regulation of content on TV channels from time to time. No News and Current Affairs channel shall be permitted to be downlinked if it does not meet the following additional conditions: That it does not carry any advertisements aimed at Indian viewers; That it is not designed specifically for Indian audiences; That it is a standard international channel; That it has been permitted to be telecast in the country of its uplinking by the regulatory authority of that country 11

12. Future - Multiple layers of Convergence YESTERDAY (Silos into the home) TODAY (Convergence of services, networks & devices) 12

13. Digitalization in India! USA, Europe India Refers to Terrestrial Transmissions going Digital (DTV) Cables and DTH have been digital for long time IPTV is a new technology along with DTV Commonly refers to Digital cable or DTH Cables are mostly Analog CAS implemented in notified areas of certain metros. TRAI has recommended extension of CAS in 55 cities. IPTV is an emerging technology Terrestrial Broadcasting is the exclusive domain of DD Digitalisation addresses the issue of piracy and under declaration 13

14. Forms: Illegal decoders Other Decrypting technology Use of decoders over more than the authorized area Hacking of smart cards Hacking/tapping of pre-broadcast signals Lack of addressability – Under-declaration by Cable operators Piracy Issues in Broadcasting 14

15. Piracy Components Source: CASBAA – Digital Deployment – Asia Pacific Pay-TV Industry Study, October, 2008 15

16. Cost of Piracy Source : CASBAA – Digital Deployment – Asia Pacific Pay-TV Industry Study, October, 2008 16

17. CountyPiracy TypeNet Piracy Cost 2007 (US$ Mill.) Net Piracy Cost 2008 (US$ Mill.) AustraliaIndividual Connections37.8036.12 Hong Kong Individual Connections26.4119.59 Satellite Overspill1.051.72 India Individual Connections19.2020.74 Grey Market Estimation965.521121.92 Indonesia Individual Connections8.915.83 Illegal Distributors27.7227.20 MacauIllegal Distributors13.1814.15 Malaysia Individual Connections1.832.35 Satellite Overspill2.362.48 PakistanIllegal Distributors110.40126.58 Philippines Illegal Distributors24.1924.57 Individual Connections46.0849.79 Subscriber Under-declaration14.6920.12 SingaporeIndividual Connections1.872.30 Taiwan Illegal Distributors10.319.96 Individual Connections 35.11 Subscriber Under-declaration37.1335.86 Thiland Illegal Distributors151.58162.53 Individual Connections19.4514.54 Satellite Overspill8.617.16 Vietnam Individual Connections/Overspill10.215.90 Subscriber Under-declaration 7.17 Source : CASBAA – Digital Deployment – Asia Pacific Pay-TV Industry Study, October, 2008 17

18. Tax Cost of Piracy At least US$238 million is being lost annually to regional government purses Losses comprise: Corporate profits tax: US$181 million VAT/GST: US$56 million The main governments losing out are: Thailand US$66 million Pakistan US$65 million Philippines US$44 million Taiwan US$25 million Australia US$14 million Source: PricewaterhouseCoopers 18

19. Smuggling of decoders from other countries into India Decoders from India taken to other countries Hacking of smart cards software Hacking/tapping of pre-broadcast signals Manufacture of decoders or other decrypting technology – boxes are sold on large scale. Cable operators extending beyond area of distribution Types of Piracy 19

20. EUROPE 10,099,404 Homes AMERICA 577,281 Homes MENAP 40,931,416 Homes AFRICA 180,254 Homes INDIA 72,000,000 Homes APAC 5,447,523 Homes Example ; Zees connectivity MENAT – Middle East, North Africa & Pakistan APAC – Asia Pacific The Largest Indian Television Network in the world 28 domestic channels, 18 international channels, across 167 countries, over 500 million homes Indian broadcasters have large viewership across continents also because of popularity of their content not only amongst Indians but also amongst global viewers. 20

21. EUROPE 10,099,404 Homes AMERICA 577,281 Homes MENAP 40,931,416 Homes AFRICA 180,254 Homes INDIA 72,000,000 Homes APAC 5,447,523 Homes MENAT – Middle East, North Africa & Pakistan APAC – Asia Pacific The Largest Indian Television Network in the world 28 domestic channels, 18 international channels, across 167 countries, over 500 million homes Areas covered Africa S.E.Asia India Pakistan Gulf region UK/Parts of Europe USA Canada 21 Example ; Zees connectivity

22. EUROPE 10,099,404 Homes AMERICA 577,281 Homes MENAP 40,931,416 Homes AFRICA 180,254 Homes INDIA 72,000,000 Homes APAC 5,447,523 Homes MENAT – Middle East, North Africa & Pakistan APAC – Asia Pacific The Largest Indian Television Network in the world 28 domestic channels, 18 international channels, across 167 countries, over 500 million homes Main areas of piracy Gulf region Pakistan Parts of Europe Parts of USA Africa Countries like Malaysia, Thailand etc., 22 Example ; Zees connectivity

23. Protection & Regulation of Broadcasters Uplinking & Downlinking Guidelines; Content regulated by MIB. Programming and advertisement codes laid down. All service providers are bound by the codes. Copyright Act, 1957; Cable Television Networks (Regulation) Act, 1995 (CTN Act, 1995) The Sports Broadcasting Signal (Mandatory Sharing With Prasar Bharti) Act 2007 Telecom Regulatory Authority of India Act, 1997 & Regulations framed there under; (TRAI) Present legal Position 23

24. Copyright Act 1957 As per the amendment introduced in the year 1995, Section 37 of the Act provides that every Broadcasting organization shall have a special right to be known asBroadcast Reproduction Right in respect of its broadcast. Section 2(dd) – Broadcast means communication to the public – I.By any means of wireless diffusion, whether in any one or more of the forms of signs, sounds or visual images; or II.By wire; and includes a re-broadcast Section 2(b) of the CTN Act, 1995 – Cable Services means the transmission by cables of programmes including re-transmission by cable of any broadcast television signals. Section 2(g) of CTN Act, 1995 – Programme means any television broadcast and include exhibition of films, features, dramas, advertisement and serials through video cassette recorders or video cassette players. Rule 6(3) of the CTN Rules, 1994 – No cable operator shall carry or include in his cable service any programme in respect of which copyright subsists under the Copyright Act, 1957 unless he has been granted a licence by owners of copyright under that Act in respect of such programme. Thus the broadcast through retransmission by wire is protected by Indian Law which still is an unresolved issue in the context of WIPO Treaty 24

25. Copyright Act, 1957 Fixation -Not specifically defined Sec.37 (3) – Making sound recording or visual recording is illegal Sound Recording is very broadly defined A recording of sounds from which sounds may be produced regardless of the medium on which such recording is made or the method by which the sounds are produced. Ref. to defn of Broadcast & Sec.14 (reproduction by electronic means is the excl. right of the owner) Fair Use Provisions contained in Sec.52 of the Act -In addition to all the other provisions of Fair Use viz., Fair dealing for private use including – Research, – Criticism, – to make back-up copies for studying interoperability of comp. programmes, – for reporting current events, etc., – Making of ephemeral recordings is not infringement – Use for an official ceremony by the Government or in a religious ceremony. Sec.39A – Every broadcast has to be with the license of the owner of the work that is being broadcast. License to reproduce the broadcast also requires license of the owner. Statute therefore recognizes and gives supremacy to the owner of the content. 25

26. As per the extant position the protection to the broadcaster is mainly through Rome Convention, 1961 and Article 14(3) of TRIPS Agreement, 1995, which inter alia include the right to prevent fixation of broadcast. Protection granted only to signals and not to the content carried in the signals. Moreover the protection is in respect of only live signals. Pre- broadcast signals not covered. Proposed Treaty – Informal Paper dt.3/11/2008 prepared by Chairman-SCCR - Unresolved issues: Signal Based approach : Protection only to live signals or even to post fixation activities? Objectives – Protection of signal from misuse: Protection of investment confined only based on the terms of contract – i.e., the medium of transmission authorized or even beyond – any type of unauthorized use through any medium Issues in the context of proposed WIPO Treaty 26

27. Scope – What is to be covered? Nature – whether it covers only protection of the signals before and during transmission or even transmission of content after fixation – post fixation rights? Whether it cover public domain content? Relationship with the rights of content creators & performers – rights not to be infringed and scope covered only based on express terms of the contract between the content creator and broadcasting organization. Communication to public other than through TV – mobile, computer, etc. Object – what is the meaning of broadcast? Confined to signal or also to content carrying signal Whether technology specific or neutral specially in the context of digital technology and convergence Meaning of - retransmission - re-broadcast Confined only to simultaneous broadcast including deferred based on time zones? Confined only to the medium of traditional broadcasting and not internet based? Cover even post fixation transmission leading to post-fixation rights? Rebroadcast by wire – cable & internet Source : Protection of Broadcasting Organisation : Unresolved issues before WIPO by Prof. (Dr.) N.S.Gopalakrishnan Contd….. 27

28. TRAI Act, 1997 Regulator: By notification dt.9.1.2004, TRAI who had been regulating telecommunication services was also entrusted with the Regulation of Cable & Broadcasting sector by including these services in Telecommunication Services TRAI has issued series of Regulations for regulating the sector. The main regulation dt.10.12.2004 elaborately defines the terms Broadcasters and distributor of channels viz. Cable Operators, DTH Operators & IPTV Operators as also the broadcasting services & cable services. Adjudicator: Telecom Disputes Settlement and Appellate Tribunal - a specialized sector tribunal - adjudicates disputes between two or more service providers. Appeals against the orders of TDSAT directly lies with Supreme Court of India 28

29. Broadcasting Services – categorized as Essential Services Cable broadcasting may not be an essential commodity in the sense that it is not an item of food without which one cannot survive, yet looking to the figures of TV viewership in this country its importance cannot be underestimated. Available figures suggest a TV viewership of 68 million for the whole country. This shows that television viewing has almost attained the status of an essential service in this country. Honble TDSAT in its judgment dt. 27/02/2007 in Case of Set Discovery Vs. TRAI & others has observed as under: 29

31. Thank You