China, India Hampered by Poor Pay-TV Regulatory Systems

HONG KONG: CASBAA’s new Regulating for Growth survey has ranked China and India as the least favorable regulatory environments in the Asia Pacific for pay-TV players, while New Zealand and Hong Kong are seen as the best-regulated markets.

“The objective of the study is to highlight the fact that effective regulation results in stronger market growth and the direction in which governments must move in order to tap that economic potential,” said Marcel Fenez, the chairman of CASBAA. “When governments respond to advances in technology by tightening bureaucratic controls, they threaten growth of all kinds. Asia now has clear examples of market distortions and regulatory failure and there is increasing risk that the industry will experience more pressure as the sector grows and becomes higher profile.”

Fenez continued, “CASBAA’s goal is to support an industry that shapes its own competitive business model without undue government intrusion, such as wholesale and consumer rate regulation and constraints on the development of compelling programming, the greatest strength of pay-TV.  The Asian regulatory environment needs to be open—open to the flow of ideas, open to the development of great programming and open to investment from within the region and the rest of the world.”

The study analyzed 15 markets in the Asia Pacific, plus two international benchmarks, the U.S. and U.K. New Zealand, Hong Kong, Japan, Australia and Malaysia are the top five Asia-Pac markets in terms of their regulatory environments. "The best-regulated markets use a “light touch,” creating an open environment that fosters active competition," the report contends. "They, leave decisions to market players on program distribution, content choice, packaging, retail and wholesale rates, and reliance on advertising. The best regulators recognize that pay-TV distribution is an international industry, and calibrate policy choices with that in mind, avoiding single-market rules (e.g. across-the-board content labeling regulations) that make efficient international operation impossible."

At the bottom of the ranking are China, which is effectively closed to international pay-TV operators, and India, which CASBAA says suffers from over-regulation. Other markets with poor regulatory environments, the survey notes, are Taiwan and Vietnam. The Philippines and Thailand suffer from weak IP-protection systems that have allowed piracy to run rampant. The mid-range markets include South Korea, which is benefiting from an easing of rate regulation in the cable sector; Singapore, rapped for its cross-carriage policy; and Indonesia.