MIB exempts 'downlink only' TV channels from net worth hike for agents/distributors

The Ministry of Information and Broadcasting (MIB) issued a clarification saying that in a partial modification to the guidelines for uplinking and downlinking of satellite television channels in India, 2022 and the office memorandum of MIB in this regard, the net worth requirement for  'downlink only' TV channels will be exempted from the increase as mandated in the policy guidelines only if the permission holder is in the nature of an agent/distributor and not a content creator/aggregator.

The clarification comes after representations from broadcasters who were facing difficulties in meeting the revised requirement.

The Ministry said that it has received representations from broadcasters having permission for 'downlink only' TV channels who are struggling to meet the revised minimum net worth requirement as per the revised guidelines for uplinking and downlinking of satellite television channels in India, 2022 issued on November 9, 2022. As per the policy guidelines, 2022, the net worth requirement for downlink only channels had been increased viz-a-viz policy guidelines, 2011, as below:

According to the Ministry, existing permission holders have brought to the Ministry's attention the following issues, namely: That they serve as exclusive distributors of 'downlink only' TV channels wherein they serve solely as intermediaries responsible for channel distribution to DTH and cable operators. They do not engage in content creation or editorial control. Their function is essentially that of a conduit for transmitting content, and thus, the need for a high net worth is unwarranted.

“Further, 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,” MIB said.

The operations of downlink-only distributors involve basic logistics, such as managing transmissions, negotiating with operators, and ensuring regulatory compliance. This typically requires a small office space and minimal staff, making the need for an extensive net worth unnecessary. Thus, requiring a high net worth could potentially divert financial resources away from actual distribution operations.

Downlink-only distribution is often an attractive business venture for MSMEs due to its manageable operational requirements and revenue potential. Imposing a high net-worth requirement could deter such entities from entering the market, limiting healthy competition and innovation, the Ministry stated.

As per the Ministry, the representation of these downlink-only TV channels has been considered by the Ministry and in order to remove the genuine difficulties faced by such broadcasters, it is hereby clarified that in partial modification to the guidelines for uplinking and downlinking of satellite television channels in India, 2022 and OM (office memorandum) dated March 29, 2023 of MIB in this regard, 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.

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