25 February 2021 04:30

MediAvataar's News Desk

MediAvataar's News Desk

Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Outdated policies blocking investments, STAR India COO Sanjay Gupta asserts at CII conclave

Speaking at a CII conclave in New Delhi today, Sanjay Gupta, COO, STAR India lamented the fact that the Media and Entertainment Industry’s (M&E) target of reaching $100 billion in turnover has continued to remain out of reach.

Addressing delegates at the CII conclave, Mr Gupta revealed that from 0.8% of GDP three years ago, the industry had resolved to grow to 1.5% within a decade. But in the past three years, media as a percentage of GDP has instead fallen by 2 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. Prominent name that were present for the inaugural session were Mr. Sudhanshu Vats, Jawahar Sircar, JS Mathur and Minister of State for Information and Broadcasting Colonel Rajyavardhan Singh Rathore.

During the past 15 years, the M&E sector has barely seen any new entrants and only around $4 billion 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% 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.

Yet, the M&E industry has been unable to take off on the back of these investments. Although STAR India has been investing almost Rs200 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.

“A bizarre challenge confronts us here, however,” Mr Gupta continued. 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.

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.

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% 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 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 Rs12-15 a litre to Rs35-40 a litre!

Such anomalies are making the sector bleed. But no one seems to care, laments Mr Gupta. In Delhi, for example, the new government has doubled entertainment tax. Consequently, almost 30% 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. 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?

Mr Gupta concluded by asserting that 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. Media and Entertainment too need to see brave new entrepreneurs, disruptive ideas and unconventional business models, stresses Mr Gupta, but this will only happen if we unblock the capital.

Following 2014 Acquisition of US-Based MKTG INC, Network Framing Up Sports and Entertainment, Experiential and Lifestyle Capability Worldwide

Dentsu Aegis Network announces the formation of a ninth global network brand, MKTG, the lifestyle marketing agency it acquired in August 2014. The move further strengthens the network’s sports and entertainment, experiential and lifestyle marketing offering and continues its expansion around the globe.

In addition, Out-of-Home agency Posterscope’s experiential arm, psLIVE’s offices across Europe and Asia Pacific, South Africa’s Crimson Room, Australia/New Zealand’s Apollo Nation and leading US-based sports and entertainment consultancy Team Epic will be realigned as part of MKTG over the next 12 months.

Leveraging its collective experience, global network and resources, the realigned agency will provide clients with a truly integrated through-the-line service offering including sports and entertainment consulting, experiential marketing, sponsorship identification, negotiation and activation, hospitality, strategy, research and insights, custom measurement, digital and creative capabilities, content development, design and retail marketing.

“As a network, we are constantly evolving to meet the demands of our clients, to be responsive to the needs and desires of consumers and to remain pioneering in the evolution of our industry,” said Jerry Buhlmann, CEO Dentsu Aegis Network and Executive Officer of Dentsu Inc. “The tremendous growth and importance of lifestyle marketing made it clear that strategically it was time to unify our like-minded businesses as one single brand. We are completely committed to building out our lifestyle marketing offering and integrating the combined strength of these services to deliver on a far larger and broader scale.”

“Something that sets Dentsu Aegis Network apart is that we are constantly reevaluating our businesses and are willing to reorganise ourselves to best serve our clients; ultimately providing the best value we can,” said Annie Rickard, Global Brand President, Posterscope; Global Chairman, MKTG. “With this realignment, we can now provide a seamless offering across lifestyle, sports and entertainment for our clients and allow all of our agencies to benefit from this platform.”

“We are truly excited about this next chapter and the opportunity to work across the network to deliver unrivaled lifestyle marketing solutions for brands,” said Charlie Horsey, Global Brand President, MKTG, CEO MKTG USA. “The realignment will also greatly benefit our current long-standing client base and our employees who now have the ability to plug into resources and opportunities around the globe.”

Ashish Bhasin, chairman & CEO South Asia - Dentsu Aegis Network, chairman Posterscope and psLIVE - Asia Pacific said, “In India, the lifestyle marketing solutions market is growing at twice the rate of the ATL market. With Fountainhead, a leading player in India and MKTG, a leading global player, we now will have the best offering of global standards, through Fountainhead MKTG, which will make us the best lifestyle marketing solutions agency in India. This is another big step forward in helping us achieve our mission of being the second largest agency group by end 2017 in India, overturning for the first time the existing ranking which has historically been in place for over 80 years in India.”

As the agencies transition towards operating as one global brand, MKTG will grow from 450 full time employees and 7,000 brand ambassadors in the United States, to nearly 1,000 full time employees in 14 countries, providing a truly global lifestyle marketing solution for clients. MKTG will be headquartered in New York City.

Discovery Channel will present the spectacular journey of A.R. Rahman, spanning two decades and around 130 prolific film scores, and his contribution to catapult Indian film music to the world stage in an exclusive 90-minutes programme JAI HO on October 26th, Monday at 9 pm, directed by Umesh Aggarwal, for the Public Service Broadcasting Trust.

JAI HO will take viewers into the life of A.R. Rahman and will bring forth the unseen and unheard narrative of one of the greatest musicians the world has ever known. The programme will explore the evolution of his style of music - a fusion of Eastern sensibilities and Western technology and will highlight the essential Indian-ness of his music which has appealed to people the world over.

Through JAI HO, viewers will also get an access into his personal life and his wonderful journey, right from his coming together with Mani Ratnam for Roja, his first ever commercial, his Bollywood debut with Rangeela to his versatile and successful work in films like Dil Se, Taal, Rang De Basanti, Lagaan, Highway, Rockstar and Raanjhanaa, amongst others.

The man whose name figures foremost in the world of music whenever and wherever India is mentioned; one who gave Danny Boyle just what he needed in Slumdog Millionaire; one who bagged his first ever music Oscar for India; one who is one of the world's all-time top selling recording artists, A.R. Rahman is a true icon of India.

The programme offers the viewers a window into his personal life including emotional moments like leaving school at the age of nine, getting his first pay check, marriage and record celebrations and more. The viewers will directly hear the double Oscar and Grammy-winner talk about all this and more.

Rahul Johri, EVP and GM- South Asia, Discovery Networks Asia-Pacific said “Discovery Channel is delighted to offer viewers an inspiring programme on the life and journey of the music legend A.R. Rahman. We are committed to present the comprehensive image of the enchanting India - its remarkable landscapes, achievements, culture and its laudable icons to viewers across the world.”

According to Umesh Aggarwal, Director – JAI HO, “It is the first ever definitive feature on A.R. Rahman. I am confident that this film will convey his astonishing success and global phenomenon.”

Shot across the world including Los Angeles, London, Mumbai and Chennai, the programme includes interviews from the technicians, directors, producers, singers, music composers and actors with whom A.R. Rahman has worked. These include Bollywood actor Aamir Khan; playback singer Alka Yagnik; film director and producers Mani Ratnam, Ashutosh Gowariker, Subhash Ghai, Ram Gopal Varma, Shekhar Kapur, Danny Boyle; music composers Andrew Lloyd Webber, Gulzar among others.

Rajiv Mehrotra, Commissioning Editor and Managing Trustee, PSBT, said, “PSBT celebrates A. R. Rahman and is delighted to have mentored and supported a film that offers rare glimpses into the personal journey of Rahman as a human being and as a musician.”

JAI HO has been produced by Public Service Broadcasting Trust (psbt.org) with the support of the External Publicity and Public Diplomacy Division of the Ministry of External Affairs, Government of India. The programme has been directed by Umesh Aggarwal who has won many awards for his films, including the National Film Award.

In a move to strengthen its leadership team, Orchard Advertising has roped in Sharmine Panthaky as Vice President and Branch Head, Mumbai.

In her new role she will lead the relationship on key clients and look to grow the agency on the back of a renewed thrust on new business wins.

Commenting on the appointment, Kaizad Pardiwalla, Chief Operating Officer, Orchard Advertising, said, “Sharmine joins us having had rich experience in business development and leading many national and multinational client relations. In her we found the unique ability to define the purpose for brands and devise business solutions that could unlock their true potential in the market. She will work with a multi-disciplinary team across The Leo Group India’s specialised offerings in digital, retail, activation, etc., thus helping to drive an integrated communication initiative on the brands we partner. I wish her the very best in taking Orchard to new heights.”

Sharmine said on her joining, “Orchard has a legacy of great work on brands anyone would be proud to have on their roster. The leadership team has inspiring and exciting plans for the future. The opportunity to be part of this great journey was a no brainer.

Since I’m joining mainstream advertising with Orchard after having spent many years in Out of Home, BTL and other disciplines, it gives me great joy and a feeling of being back home. I’m excited to partner clients and contribute hugely in getting great work out, thus helping to grow the agency’s business.”

Sharmine is a marketing and communications professional with over 13 years of media and advertising agency experience across mainline advertising, Out of Home, engagement, news distribution and BTL.

She joins from Interspace Solutions where she worked as National Head – Retail and Customer Engagement. Sharmine has also worked with Bates CHI and Partners, Clear Channel Mudra, Contract Advertising, Portland India and Radio Mirchi.

BCG released a report titled “Shaping The Industry At A Time Of Disruption – Taking Indian M&E Industry Towards A $100 Billion Aspiration” at the BCG-CII 4th Big Picture Summit on the future of Indian media and entertainment.

The report assesses the progress over the past five years, where it has been growing at a stable 10% Year on Year (YoY) and currently valued at INR 115,500 Crores.

Indian Media & Entertainment (M&E) industry has the potential to reach $100 billion by 2025 (including distribution revenues from broadband) by 2025. This would imply growth to Rs.210-250,000 Crore by 2020. Such robust growth can come only on the back of enabling infrastructure and the support of the government and the industry itself. With a growth potential of 13-16% YOY it has to potential to emerge as one of the largest employment providers, contributing significantly to the Gross Domestic Product (GDP).

“At the core of this optimism is the fact that the underlying Indian consumer trend is positive,” notes Kanchan Samtani, Partner & Director at The Boston Consulting Group. “Unlike mature Western markets, digital media could expand the overall market size by tapping into latent demand and driving new media consumption rather than merely replacing other, more traditional platforms.”

The significance of India's M&E sector cannot be stated enough. It has the world’s third largest television viewership base after the U.S. and China, the world’s second largest print industry in terms of circulation, and produces the highest number of films worldwide (1900+ films per annum). The next decade, however will be the decade of change. We see the interplay of five forces creating a tectonic shift which can potentially catapult the industry into the next orbit of growth. India is gearing for a consumption explosion.

New consumption behaviors will get created with always-on, on-the-go, on-demand and seamless pick-where-you-left models across multiple devices and time frames. The distinction between prime and non-prime time will become redundant due to these changing patterns and behaviors of online consumption.  It will also create fragmented audiences. With the ever-increasing choice of content and the popularity of time-shifted and on-demand viewing, measuring viewer behavior will become increasingly critical as it will facilitate targeted advertising. Further, there is a fast growing need for innovative and newer ad formats for effective monetization.

The Report titled as “Vision 2020 Document on Media & Entertainment Sector” will be discussed threadbare at the 4th edition of the CII Big Picture Summit to be held on 19-20 October 2015 in New Delhi. This annual event pioneered by CII is the platform to address concerns and challenges of the industry among the stakeholders to ferret out newer ideations and suggest measures for creating an eco-system for accelerating the growth of the industry.

At the same time the next decade could also provide India the opportunity to emerge as a global M&E hub. Opportunities, content and players are all becoming universal, and India—backed by a stable macroeconomic outlook, a youthful, English speaking workforce and the government's "Make in India" and "Digital India" blueprints—is strongly positioned to exploit such trends. “To advance industry growth, India needs to establish itself as a global production hub and encourage higher investment in the M&E sector – from global and domestic players” states Neeraj Aggarwal, MD, The Boston Consulting Group - India.

Linear value chains of the past will collapse, accommodating new roles and new players. “This evolving ecosystem will create new winners and these winners will do three things differently,” contends John Rose, Senior Partner at The Boston Consulting Group. “They will think big, leverage multiple monetization models – adding up dimes to create dollars and invest heavily in content – for content will continue to be king.”


We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…