The media & entertainment industry is at an interesting crossroads which will define the next phase of growth — commercially and creatively. According to a Ficci-KPMG report, the industry registered a growth of 12 per cent over 2010 to reach Rs 72,800 crore. For anyone involved in the business, it is a challenging time with a new generation of technology, professionals, distribution platforms and consumption patterns. Karan Johar, film producer, TV host and co-chairman of the Ficci Entertainment Committee, spoke to Varada Bhat on how the industry is gearing for 2012. Edited excerpts:
In 2011, the Indian M&E industry saw a big shift, with digital technologies and platforms used for distribution (across television, film, exhibitions, etc). What are the challenges you see?
The influence of digital will continue in all verticals of the media and entertainment space. One big challenge is to embrace and accept the change. The future is clearly multi-platform, online and tablets. Content consumption will happen through the digital route. As TV gets intelligent , the content for broadcast and digital rights will get closer. Trans-media is changing the standard for how motion pictures will be conceived and distributed.
In this year’s edition of Ficci Frames, the organisers have started with a new initiative, with Ficci Frames Market. How will this help the industry?
We have created the market as an umbrella, to bring about a focus to buying and selling activity. The idea is to create a platform for buyers and sellers to meet at Frames every year. As the industry is getting matured, we want to add the element of buying and selling within the domestic market and to open avenues for the international market. We go to international TV and film markets to sell our content to new global territories. We are providing a platform for content owners abroad to meet with Indian buyers and vice-versa.
India is emerging as an M&E hot spot for international players. We have seen studios having aggressive marketing plans and also seen a few movies collecting box office revenues at par with Bollywood movies. Do you see this as a major threat?
There is no threat. We see it as a positive development. This will help expand growth of the overall Indian film market. Over recent years, not only have the entire dynamics of the film business changed; the distribution and marketing of films has also changed. This trend has expanded growth in not only commercial films but regional small budget and Hollywood films.
How do you see the emergence of new revenue streams like pre-selling satellite rights, 3G,video streaming, etc? Do you see lesser dependence on the box office?
The revenue streams are visible in new platforms. I would say this is the best time to be in the media business. We have an ecosystem that allows us to feel and touch media and the audience. However, I feel the box office will continue to contribute to the bottom line of the returns of a film. The theatrical release of film will boost new audiences to engage in the emerging platforms.
In the past 12 months, we have seen major consolidation across the industry, like the UTV-Disney deal, Reliance-Network18 and STAR-Zee in the distribution sector. What’s your take on the trend for industry growth?
It is good that the much-talked about consolidation has begun. We will inevitably see more of it. The kind of valuation offered by Disney to UTV is encouraging. The consolidation re-emphasises the strength of the Indian market. It is a good sign, as many will look for greater value for the M&E sector.
What is your take on foreign direct investment in the media sector?
India has one of the most forward regulations with regard to FDI in the sector. We are more open than many countries. Leaving out the news business, in which we have got an FDI cap, every other business (TV, internet, films) has 100 per cent automatic entry to foreign companies. India has created perhaps one of the most liberal regimes in the world. We expect a level playing field when Indian media companies go global.
What are the expectations from the Budget for the M&E industry and film industry in particular?
We expect a push for digitisation and infrastructure status to the cable distribution sector. The GST (goods and services tax) rollout will be good for the entertainment sector. We don’t want to be burdened more with service tax. We already have an entertainment tax which is the highest in the world.
