MUMBAI: Star India CEO Sanjay Gupta while talking during the final session of day one at the 15th edition of FICCI Frames 2014 — “Talking Numbers: Hard Facts about M &E's Economic Contribution” — said that it seems that “as the media and entertainment (M&E) industry we have really forgotten how big we truly are, we are not just about showbiz. I believe we are undervaluing ourselves and instead of being a $15 billion industry we should be somewhere around $ 60 billion (that is, four times).”
Gupta thinks that the industry has a potential to grow at the rate of 15 per cent, but it is rather doing just a shade below five per cent. “The industry, comprising of the stakeholders and the regulators, is having a very myopic view on how can we all come together to serve the consumer with what they want,” he remarked.
He also brought to the fore the hurdles that a new player in the market can come across. “If I want to introduce a product which is of superior quality than what other products are offering, I have regulatory restrictions on the pricing not to mention the pressing taxation on the content,” he said.
The session, which was anchored by Motion Picture Association (MPA) India MD Uday Singh, brought up many major points about the contribution of the M&E Industry in the country’s economy and the hurdles that need to be overcome to improve the numbers.
Besides Gupta, the panel comprised Viacom 18 Media group CEO Sudhanshu Vats, Disney India MD Siddharth Roy Kapur and Aditya Birla Group chief economist Dr Ajit Ranade who underlined the improvements that need to be brought in regulations, infrastructure, cutting down on piracy and much more.
It was Viacom 18 Media group CEO Sudhanshu Vats, who called attention to the issues associated to digitization. He said: “With an expected growth of 21 per cent in subscription revenues and 15 per cent in advertising revenue by the end of phase three and four of the digitisation, the future for the M&E industry looks bright. But the pressing issue that needs to be addressed is though 40 odd cities have been seeded with boxes are they also addressable?"
However, he thinks the future is bright for subscription driven markets with the oncoming of 100 per cent ad free channels like HBO Hits and HBO Defined.
The panelists also discussed the contribution of the three major players in the Indian movie business — Hindi, Tamil and Telugu cinema — that contribute nearly 43 per cent, 19 per cent and 14 per cent respectively to the total revenue generation from the film industry. Singh remarked that with nearly 1.8 million people working in this industry, it is certainly one of the important contributors to the GDP of the country.
Disney India MD Siddharth Roy Kapur said: "As far as the film industry is concerned, the three major areas of concern are creativity, infrastructure and piracy. Once we as a community get together and address these perils, I am sure the world will become a much happier place."
According to Kapur, the top 10 box-office hits contribute to nearly 50 per cent or more to the overall collections from the film sector alone, and the top seven male stars contribute to 45 per cent of the year's overall box-office collections.
Singh also brought up the topic of distribution and ARPUs (Average Revenue Per User), stating that with better addressability and packaging the ARPU will witness a substantial rise.
Aditya Birla Group chief economist Dr. Ajit Ranade concluded the discussion with some mind-numbing numbers and facts. "The industry is currently going through a rapid transformation and the contribution to the overall GDP will see improvement in coming time but we need to take into account that the government is always struggling with a fiscal deficit, thus reducing taxation is not the final resolution.”
“The right way forward is to move towards a micro payment format where the consumer pays for all the facilities he/she uses this will reduce a lot of disparities and only go onto strengthen the growth of the market and further contribute to the economy,” he concluded.