Amit Khanna: The media are a-changing

FREEZE FRAME

Entertainment is one of the vital segments of the knowledge economy. According to a recent estimate by PriceWaterhouseCoopers (PwC), the global media and entertainment industry will be worth $1.7 trillion annually by 2007.

This is based on the modest assumption that the industry will grow by a mere 5 per cent per annum, lead by the Asian segment of the industry. If current trends are any indication, China and India alone will in the coming years have much more explosive growth and this will impact the rest of the world.

In spite of the fact that the US has dominated the entertainment industry over the last century, it is becoming clear that this century will be an Asian century.

Obviously, demographics are an important determinant but two other factors are equally significant "� technology and talent. India's entertainment industry itself has an unprecedented opportunity to leapfrog from $ 5 billion to $25 billion in five years.

As living standards rise, the expenditure on entertainment is among the quickest expenditures to rise. After food and shelter, leisure fulfillment is a human want which often overtakes other basic needs like health and education.

This is not a column for an ideological debate but the fact remains that people are spending more and more time and money to keep themselves entertained and informed even as they ignore other more vital life enhancers. Urbanisation and technological advancement are exposing large populations to newer media led by TV.

In a developing economy like ours where all businesses are starting from a low base, the growth opportunities are even bigger. However, it is important to look at the very definition of media and entertainment.

We are all familiar with the multiple media choices that are present in our lives today "� newspapers, radio, television, films, live events, gaming and online entertainment, to name some. Each has a certain history and consequently its own creative principles, distribution and consumption patterns.

Most creators and service providers are thus confined to outdated silos. What is happening currently is unbridled competition among the media for audiences and an overlap of content. Similarly multiple access is redefining business models. Most are unaware of the radical change which the digital world is heralding in media and entertainment. When much better equipped global players "� the Hollywood majors like Time-Warner, Viacom, Disney, Newscorp and MGM "� are struggling to reinvent themselves in the new world, it is not much of a surprise that Indian showbiz and media are at sixes and sevens.

The days of the one horse show are over. Integrated companies are going to dominate the media and entertainment landscape in the years to come. There is also the question of economies of scale and efficiencies. Of course, individual talent will always command a premium. That is what stardom all about. But a company can take several routes to enlarge its operations.

A newspaper or magazine publisher like Bennet Coleman or Living Media can expand into other media such as broadcasting. Interestingly, both these companies are fairly diversified, with almost similar portfolios "� publishing, radio and TV, music, websites and events. One can clearly see a pattern of moving from information to entertainment emerging. Eenadu and Sun are two groups in the south that are trying to do the same, albeit on a smaller scale. The idea is to leverage their media vehicles to market other entertainment services. Diversification also mitigates risk, besides allowing optimum use of creative and other resources.

Obviously there may be a place for only a few more to become really large integrated media companies. Dainik Bhaskar, Jagran, Anand Bazar and Malayala Manorama are some other potential candidates.

At the other end of the spectrum, film and TV producers like Mukta Arts, Yashraj, Adlabs, UTV, Sab TV and Pentamedia are diversifying into activities like multiplexes, studios, distribution and even TV channels. Here the scene is a little confusing as corporatisation has been slow and tardy.

A lot more players like Nimbus, Tips, PNC, K Sera Sera, Applause, Eros, Verma Corp, Prasad, BAG Films and Shringar are also eyeing a larger role. Not all will succeed "� some just don't have the vision or management depth to scale up their operations.

The survivors, though, will be much better off. Zee, the first true media and entertainment conglomerate in India, in a way best typifies the dilemma of growth and management.

Finally you have the global players "� Time-Warner, Sony, Newscorp, Disney and Viacom "� that have a manifold presence in India but are largely perceived as TV broadcasters. These companies realise that India and China are the markets of tomorrow. They will slowly spread themselves around.

Not that there is much to worry about. I for one am least worried about cultural imperialism in this day and age. The transnationals will bring in their money and professionalism and help the local industry to be competitive and nimble footed.

At a time when Bollywood in particular and Indian entertainment at large is the flavour of the decade, it is imperative that we leverage the strengths of multinational media giants to sell our talent and culture around the world even as our homegrown media moguls look for new lands to conquer.

For once technology is going to be on our side. Just keep the pessimists and the meddlesome government in check!

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