Heading for boom times

FREEZE FRAME/ As FRAMES showed, the entertainment industry is set to take off

At the recent FRAMES convention organised by the Federation of Indian Chambers of Commerce & Industry, it was quite evident that the Indian entertainment business is attracting global attention. The three-day event attracted over 1,500 participants, including 300 from overseas.

The PriceWaterhouseCoopers report, which has already been widely covered, merely underlines something which this column has been saying for the past two years or more.

The entertainment industry's growth rate has and will continue to outperform gross domestic product growth by several percentage points.

The reasons too are quite simple and oft repeated. The rise and rise of spending (middle class) in India is the most obvious trigger. Technology and its rapid deployment is the second. The long and rich tradition and immense talent pool is the third.

However, the fourth is the most interesting. Although most other goods and services barring food are consumed only by those who can afford to, spending on entertainment is neither linked to incomes or socio economic segmentations.

Even the poorest's first indulgence is a visit to the village mela or the nearest touring talkie and the first consumer durable a family acquires is a TV set.

When you put this in the perspective of a billion plus people or over 200 million households, a compound annual growth rate of 18 per cent and a target of Rs 50,000 crore in 2009 for the entertainment industry does not look all that surprising.

In fact, I would fully endorse what Infosys chief mentor Narayana Murthy said in his valedictory and Subhash Chandra in his keynote address "� Rs 50,000 crore is too modest a target to set and the entertainment industry should aim at a much higher figure.

A subtle but definite change, meanwhile, is happening. We have seen that with just about 50 multiplexes. Suddenly a lot more marginal films are being released.

Even mainstream films now have a segment that is being dubbed 'multiplex films.' Within the next year, another 50 multiplexes will become operational and in three years India should have at least 500 multiplexes and it would be entirely possible to make films for these theatres.

Again with companies like Adlabs, PVR, Shringar, E-City and Inox building several of these, it is a matter of time before theatre chains emerge, leading to the disintermediation of traditional distributors.

Add to this the rise in the overseas business of a certain kind of film and no wonder that an increasing number of 'different' films are being planned.

Some of the more enlightened mainstream film makers are actually making films with a clear urban bias. The obverse is the rise in the popularity of regional cinema in languages like Bhojpuri, Punjabi and Marathi.

Look at television too. Several news channels have been launched in the last few months. A couple of them are actually doing well. None of the existing players has been affected much. On the programming front, 'reality shows' are the current flavour but even the staple soap opera's budgets are going up.

Where is the money coming from? According to the PWC report, the total number of C&S homes will rise to 80 million, accounting for subscription revenue of Rs 20,000 crore and the share of the advertising pie will increase to Rs 10,000 crore.

This is again because India has one of the lowest GDP to ad spend ratios in the world. Our cable charges are lower than those in most developing markets and we have huge under decelerations.

A better regulatory environment and compliance and newer technologies like DTH, broadband and IPTV are going to help bolster TV revenues.

The FM radio industry is set to get a boost with the much awaited revenue sharing policy. Even the beleaguered music industry is breathing easier with additional revenue streams like digital downloads and ring tones rising significantly.

So if every segment of the industry is going to prosper, is there a hitch? Sure, there are several. But the one which needs immediate attention is the lack of professional managers in this business, specially films. In the broadcasting sector it is the opposite problem "� too many managers and very few creative professionals.

While the film industry has to attract management expertise if it wants to move to the next level of growth, it is sad that even some of the so- called corporates do not have a proper marketing head or CFO.

I am happy that some stalwarts in Bollywood like Yash Chopra, Subhash Ghai, Manmohan Shetty, Ram Gopal Verma and Ronnie Screwala are going about truly professionalising their companies.

The second problem is the disorganised marketing and brand building. It is time that our media and entertainment companies spent adequate resources on marketing their products and enhancing their brand value.

The third is creative inbreeding, which goes on in all sectors of showbiz.

All in all, what appears to be a mid-summer night's dream can be turned into tangible reality and the hugely prosperous industry which is projected in various reports and was in evidence at FRAMES.

(Amit Khanna is chairman of Reliance Entertainment. The views expressed here are his own)