Amit Khanna: Blockbuster times

FREEZE FRAME/ Yet another report forecasts that the M&E industries' prospects are bright

I have always maintained in these columns and at other fora that, given the right eco-system, the media and entertainment (M&E) industries will not only outperform the economy but will also be a growth engine in the years to come.

Unlike most other industries, the M&E industries are a force multiplier as it impacts many businesses like tourism and generally creates a popular perception about the country both at home and abroad. In today's digital world, the M&E industries impact all socio-economic aspects of our lives.

Little surprise, then, that another report on the Indian entertainment industry, this one commissioned by the Confederation of Indian Industry (CII), is as optimistic as several other reports on the industry.

This one predicts a year-on-year growth of 20 per cent, from its current size of Rs 19,000 crore to about Rs 50,000 crore by 2008. However, there have been more sceptics (including many within the industry) than believers in its potential. I am sure they will no doubt cynically dismiss the new projections as fanciful.

The reality is that although the M&E industries have grown exponentially in the last decade, there have also been huge missed opportunities.

In spite of its 100-year-old lineage and immense following, the film industry has largely remained insular, disorganised and resistant to change. A few brave hearts and some corporatisation are responsible for the changes which are visible today.

At a recent seminar on entertainment, media and marketing organised by the Film Guild it was quite apparent that most film producers, including some of the biggest names in showbiz, were totally out of sync with contemporary marketing techniques.

What is heartening, though, is that they understand their inadequacy and are willing to learn. One segment which is growing rapidly is live entertainment (CII estimates it is growing at a compound annual growth rate of 60 per cent). It is a segment that has evolved fast and is in tune with the demands of today's generation.

The music industry did not do so and is suffering. It is the inability to respond swiftly to changing technology and demographics which can stifle opportunities.

The lack of management professionals in the film business has resulted in creating arbitrary ground rules. Amongst the worst offenders are the exhibitors, distributors and the so-called trade pundits who are caught in a time warp.

We have seen that the recent multiplex boom is fuelling a new resurgence in the movies. But under reportage of box office collections by most exhibitors and distributors is so rampant that it makes cable operators look like angels.

Not that all is hunky dory in tinsel town. Poor planning, the absence of strategy and unprofessionalism make the film making business unnecessarily speculative. Yet I believe strongly that the scene is changing, albeit hesitantly.

The government on its part has done precious little. In fact as the minister of information and broadcasting put it recently, the government would like to be a benign facilitator rather than a regulator.

If only it would! It still wants to organise film festivals in a manner that went out of vogue with the Soviet state. There is still state patronage in appointments to all kinds of institutions like the Censor Board.

Yet when it comes to tangible interventions like curbing piracy or reducing entertainment tax, all one gets is a lot of rhetoric and bureaucratese about films being a state subject. If films, especially Bollywood, are one India's best known brands globally, that's due to its creative fraternity alone.

If the government was to be a little proactive in unshackling the potential, the Indian film industry can truly get on to the fast track. From Rs 4000 crore, it can grow to Rs 10,000 crore in a matter of years.

Television in India has had a phenomenal run. India now has about 100 million households. There are over 200 satellite channels and over 50 million cable passed homes and we still don't have a regulatory framework in place.

For the past two years successive governments have been struggling to find a way out of the conditional access mess. There is no clarity on either the uplink or the downlink policy. As regards cutting edge technologies like broadband, the less said the better.

What is needed at the moment is a sense of urgency on the part of all stakeholders. Fortunately, the unprecedented growth in telecom is creating a world-class digital infrastructure in India, which will help our M&E sector a lot in the years to come.

While the film industry gets a little organised the electronic media will have to learn to innovate. With a large domestic and a dormant export market, CII's Rs 50,000 crore projections are no pipe dream.

If I were to put down five pre-conditions for achieving this target, they would be: professsionalisation of the film and cable industries, a forward-looking regulatory framework, aggressive marketing, human resource development and a quick move to the digital world.

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