Television

'M&E industry's $100 billion dream remains elusive with choking of investment:’ Star India COO Sanjay Gupta

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/smartcrop_800x800/public/images/tv-images/2015/10/19/Untitled-1_39.jpg?itok=Pip5YMJx

MUMBAI: Despite the India Shining and Digital India waves that the country has been witnessing, the $100 billion dream has remained elusive for the Indian media and entertainment (M&E) industry.

 

Speaking at a CII conclave in New Delhi today, Star India COO Sanjay Gupta lamented this fact that saying that from 0.8 per cent of GDP three years ago, the industry had resolved to grow to 1.5 per cent within a decade. However, in the past three years, media as a percentage of GDP has instead fallen by two basis points and the $100 billion dream has continued to remain distant.

 

“The biggest hurdle has been the choking of investment. To meet ambitious targets, a business either needs to generate large profits internally, which are then invested back into the business or they grow on the back of external investments – national or international. But the M&E industry boasts of neither,” he said

 

CII National Committee on Media and Entertainment and Group CEO, Viacom 18 Group CEO and CII National Committee on Media and Entertainment chairman Sudhanshu Vats, Prasar Bharati CEO Jawahar Sircar, Information and Broadcasting Ministry special secretary JS Mathur and Minister of State for Information and Broadcasting Rajyavardhan Singh Rathore were among those present at the summit.

 

During the past 15 years, the M&E sector has barely seen any new entrants and only around $4 billion in foreign direct investment (FDI). To garner $100 billion, the industry needs to invest at least $50 billion over the next decade – something that seems farfetched, given the present circumstances. “With M&E remaining an unattractive destination for investments, investors have no interest to invest in a fragmented and unprofitable business. Despite the 12 per cent year-on-year growth touted for the industry, the sector is paradoxically riddled with a host of unprofitable verticals. For example, sports is a $2 billion industry that could easily grow to around $10 in the next five years. Be it Hockey, Football, Kabaddi or Badminton, the new sporting leagues are being lapped up by the audiences,” Gupta said.

 

Yet, the M&E industry has been unable to take off on the back of these investments. “Although Star India has been investing almost Rs 200 crore every season for the past two years, dividends are not commensurate. For this to happen, one needs to scale up the volume of content. In other words, more teams, more players and more days of Kabaddi are required annually to capitalize on this opportunity,” Gupta added.

 

"A bizarre challenge confronts us here, however. Although Punjab and Haryana contribute large numbers of Kabaddi players, one cannot add more teams based in either of these two states because they do not have a single indoor stadium that could host a Kabaddi match. In Mumbai, the game is hosted at the NSCI Dome, but the biggest constraint is the availability of this facility for a reasonably long period of time. One venue for a city with more than 1,000 Kabaddi clubs simply does not make sense. In this case, consumer interest and the ability to invest are no hurdles, but the fact that the sporting infrastructure required is simply non-existent. Worse, there are no plans to address this situation,” Gupta continued.

 

The movie business is no different. With around 7,000 screens, India has one of the world’s lowest screen densities. Despite breakthrough movies such as Queen, PK or Bajrangi Bhaijaan, revenues are stagnant, although the cost of producing these movies has soared dramatically in the past decade. Therefore, a $2 billion industry that sets a billion hearts racing earns zero profits.

 

Even news channels fare no better. Without a robust business model, news channel have no money to invest in their business. Whether English or regional, number one channel or last, none of the channels make any money because none earn any money from subscription. Globally, subscription contributes as much as 60-70 per cent of the total earnings of a news channel.

 

Television distribution is roughly a third of the total value of the media industry. In the past few years, immense investments have been made in both direct to home (DTH) and the cable business. But the tragedy of this sector is that even after many years of continued investment not a single company or business makes any money. Since the sector is considered a basic need from a consumer viewpoint, the prices at which content is sold by creators to platforms is regulated – prices frozen in 2003 haven’t changed in the past 12 years. In the same 12-year period, even the price of milk has jumped from Rs 12-15 a litre to Rs 35-40 a litre. 

 

“Such anomalies are making the sector bleed. But no one seems to care,” Gupta lamented. “In Delhi, for example, the new government has doubled entertainment tax. Consequently, almost 30 per cent of revenue is paid as entertainment tax. The lack of political alignment and consistency of policy in the sector makes it impossible to plan a sustainable business model.”

 

In 2015, where millions across the country receive their daily dose of news from Facebook feed, radio broadcasters can only air news snippets from All India Radio (AIR). “In the US, radio has gone hyper local and people spend an hour daily listening to radio. This gives a fillip to local brands since a quick and cheap platform is available to build their business. In India, conversely, there are a limited number of radio stations and limited content that can be aired – and without any news. It is no surprise then that even in large cities where FM exists, the time spent on radio per person is five minutes. Can any industry on Earth make money in such circumstances?” he asked.

 

Gupta concluded by asserting, “Unless we unblock minds, we cannot unblock capital.”

 

Accordingly, there is an urgent need to make distribution profitable, position animation as the next wave of export-oriented growth, support a serious scale-up of exhibition screens and sports stadiums and allow content innovation in radio. A hugely attractive pitch for domestic and international investors is required, giving them clarity on the policy environment for the next 10 years and confidence of generating sizeable returns on the investments.

 

All stakeholders, businesses, policymakers and regulators need to stop being happy with the status quo and incrementalism. In the new era backed by technology, every sector from automobiles to financial institutions and even grocery shopping have witnessed dramatic growth and serious disruptions on the back of serious flow of capital.

 

“M&E too needs to see brave new entrepreneurs, disruptive ideas and unconventional business models but this will only happen if we unblock the capital,” stressed Gupta.

Latest Reads

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/23/suproiya%20%281%29.jpg?itok=wTwcHslB
DD's kids channel could partner private players; launch 2017

Building its channel bouquet. That’s what pubcaster Doordarshan which operates more than 37 channels is doing. Come later this year, and DD will launch a free to air channel (FTA) targeted at toddlers. This was confirmed to indiantelevision.com by its director general Supriya Sahu.

Television TV Channels Kids
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/23/jal-dhan%20%281%29.jpg?itok=xjkmVvqw
Aquaguard & Network18 to honour 'Water Heroes' at the 'Jal Daan' grand finale

The first season of the ‘Jal Daan movement’, Network18 & Aquaguard’s social campaign around creating awareness and generating solutions to the drinking water crises in India is reaching its culmination with a gala ceremony on 24th March 2017 at Trident, Nariman Point, Mumbai. The event will...

Television TV Channels News Broadcasting
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/23/jeff%20wender_0.jpg?itok=UjEkgLOU
Nielsen and Fox television stations renew local television ratings agreement

New York, NY – March 22, 2017 – Nielsen (NYSE: NLSN) has announced today that it has signed a long-term renewal agreement with FOX Television Stations (FTS) for audience measurement services. As part of the agreement, FTS licenses Nielsen’s Local Television ratings across all of the group’s 28...

Television TV Channels English Entertainment
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/22/dd.jpg?itok=J9URWJvV
DD b'cast partner of CMS Vataran filmfest

Doordarshan today decided to become the broadcast partner for the 9th CMS VATAVARAN Environment & Wildlife International Film Festival and Forum later this year.

Television TV Channels Terrestrial
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/22/rahul%20%281%29_0.jpg?itok=3fmOAWlv
Rahul Chakravarti is Colors Bangla & Odia business head

Viacom18, one of India’s fastest growing media and entertainment companies, announced the appointment of Rahul Chakravarti as Business Head of Colors Bangla and Colors Odia. A veteran with over two decades of experience across FMCG, management consultancy and advertising, Rahul has worked across...

Television TV Channels Regional
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/22/Amala%20Thomas.jpg?itok=RuQ7HHLj
Amala Thomas, who epitomised professionalism in the media, is no more

MUMBAI: Creative Producer and senior television professional Amala Thomas, who was the very epitome of professionalism all her life, is no more. The creative genius passed away on 17 March 2017 of a brief illness quite suddenly as she was very active. Amala is survived by her mother, sisters and...

Television Production House Fiction
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/22/Pushpaka%20Vimana_0.jpg?itok=wCA20ioJ
Infringement case filed against makers of the movie Pushpaka Vimana

Bangalore March 21, 2017: According to a suit filed against the makers of the Kannada movie Pushpaka Vimana (2017), they have not purchased the Kannada-language remake rights of the movie. It is an infringement of the rights owned by Kross Pictures India. Kross Pictures and Kross Television India,...

Television TV Channels Regional
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/21/master-chef%20%281%29.jpg?itok=jWcHVoaF
MasterChef US Junior to premiere on Star World from 26 Mar

Star World and Star World HD will start airing the fifth season of MasterChef U.S. Junior starting 26 March at the prime time 9pm slot. The fifth season of the show, to be aired every Sunday, premiered in the US on 9 February this year with chefs -- Gordon Ramsay and Christina Tosi acting as the...

Television TV Channels English Entertainment
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/21/ud%20%281%29.jpg?itok=wynuJ6tk
Censorship and extremism worry content creator even as tech helps: Uday Shankar

Star India chief Uday Shankar today said while the distance that India has travelled in just one year in adopting internet based behavior is nothing short of remarkable, he was sad that ‘our censor authorities seem to be getting more and more conservative’ as the world gets bolder.

Television TV Channels GECs

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories