(18 February 2009 8:45 pm)

MUMBAI: Fight the global slowdown by reducing costs per eyeballs, freeing capital to run the business, and charting out innovative strategies.

These were the main points that came out on a Ficci-Frames session that looked at the impact of recession on the media and entertainment industry.

KPMG head-information, communication, entertainment Rajesh Jain said media companies have to build on core strengths rather than diversifying unnecessarily. Sourcing capital was easier in 2007 and 2008 but with the economy under the grip of a downturn and revenues falling, it is crucial for companies to prepare for the next 18 months and have a three-year strategy. When the economy goes on an upswing again, they will be in a position to ride the bull run.

"Product differentiation and innovation is key which is what the IPL did. That is what media buyers look for. With so much fragmentation happening, players should look at narrowcasting. Channels also have to take digitsation into account while planning forward," Jain said.

The TV industry should aggressively look at regionalisation and try to grow the ad pie by increasing the client base, added Jain.

Reliance Entertainment president Rajesh Sawhney agreed that the regional market needed to be tapped more effectively. New media could also prove to be a lifeline in these tough times.

"Companies will have to free up capital so that they can continue to run. Media companies will have to look at controlling costs. This means rethinking compensation and staffing," Sawhney warned.

Madison CEO Punitha Arumugam, however, painted a bleak picture. While India would not be as bad as markets like UK where ad rates have sunk to the lowest in 20 years, the best that an optimist can hope for is between two and five per cent growth.

The expectation is that television will grow by seven per cent. Radio will also grow as it is still seen as a cost effective medium. Print, cinema and outdoor, however, will be hit harder. "These sectors have to ensure that media is made more effective for advertisers. Many newspapers have reduced their pages as ad money is drying up. While television breaks are still long, there are more channel promos being seen," said Arumugam.

Categories like FMCG and telecom will continue to spend while other sectors will scale back, Arumugam added.