Budget 2023-24: Request to slash film ticket prices, OTT subscription costs to boost viewership ignored

The Media, Entertainment, and Advertising sector had big hopes for Union Budget 2023. In the last two years, after the onset of COVID-19, there was an increase in the number of people consuming media and OTT content but we saw a decline in traditional movie theatre viewership. However, last year, the big screen picked up again, and OTT continued to flourish with the launch of several national OTT players. Naturally, the industry wanted concrete relief and financial aid from the government to boost viewership and revenue.

 As of 2021, the contribution of the media & entertainment sector was valued at around 1.6 trillion, with the numbers projected to only increase this year. According to further reports by the Internet and Mobile Association of India (IMAI), there is going to be a rise in the number of internet users to 900 million by 2025.

Finance Minister Nirmala Sitharaman on 1 February made a slew of announcements:

Tax reliefs for middle-income group

There was a lot of anticipation among various sectors regarding the changes to the Income tax slabs. As a breather for the middle-income group, the Budget announced the release of the new Income Tax schemes. Under the new regime, the income tax rebate limit has been increased from Rs 5 lakhs to Rs 6 lakhs. This means that taxpayers earning up to 3 lakhs in a year, do not have to pay tax at all. While taxpayers earning up to Rs 6 lakhs in a year have to pay only 5 per cent as income tax. This tax change proposal will provide much-needed relief to the salaried and middle-class groups and will also help the lower-income group keep their money secure. It will help most of the Indian diaspora to increase their buying power.

Increased outlay for I&B

Some ministries are receiving a slight increase in their funding compared to the last fiscal. These include the Ministry of Information and Broadcasting receiving Rs 4,692 crores and a separate Rs 600 crores being set aside for the Broadcasting and Infrastructure Development Program. Media MSMEs can also benefit from the revamping of the Credit Guarantee Scheme for MSMEs and the infusion of Rs 9,000 crore into bank funds.

M&E sector gets no direct impetus

The Media and Entertainment sector had vocalised their wishes of wanting the government to slash movie ticket prices and OTT subscription plan costs to boost viewership and consequent customer spending on digital and television content. However, none of these has been addressed, at least not directly.

The only relief has come in the form of indirect custom duty cuts on the production and sale of various technological goods and commodities.  These include the reduction of custom duty on cars, smartphones, TVs, batteries, and other technological goods. From the above options, only TVs and smartphones are essential for viewing content on big screens and OTT platforms. So, these measures might give an indirect boost to the public consuming media content through different mediums.

A slash in TV and smartphone prices can make it easier for people to purchase a TV or smartphone outside their budget. Or it could mean getting their ideal TV or smartphone at a lesser price, leaving them more funds for buying subscription plans to their favourite content platforms. This should not change much for most national and regional OTT platforms given that their cost is already affordable for all income groups. But it would reduce the hefty sum of subscribing to global OTT platforms like Netflix, Hulu, Amazon Prime, or Apple TV, which have high-paying subscription models.

The government is also aiming to amplify the use of digital apps by setting up 100 labs for the development of 5G apps. 5G will make viewing even more enjoyable and encourage more users to tune in to their favourite movies and TV shows.

Given the immense contribution of the media and entertainment sector to India’s economy and GDP, these new tax and custom duty changes will only boost the economic contribution of this sector further. However, the government has not provided any direct impetus to the sector, which is why the industry leaders hope they recognize the sector’s contribution and deliver a more personalised solution in the next budget. Overall, the budget is well-balanced and progressive.

The writer is CEO, AAONXT, a leading OTT platform. He tweets @aao_nxt Views are personal.

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