On day two of Ficci Frames 2018, Viacom18 Group CEO Sudhanshu Vats pledged that the media and entertainment industry should be the force multiplier for growth, change, jobs and for the good of society.
In his keynote address, Vats highlighted the task at hand in front of the industry. ‚ÄúEvery time we end up at the forums, we prescribe a to-do list for the government. This time I want to leave you with three things that we need to do ‚Äď one for the government, one for us as the industry and the final one for us as society,‚ÄĚ he said.
‚ÄúFrom the government, what I‚Äôve been asking for some time now ‚Äď an e-enabled single window clearance. This will go a long way in enhancing the ease of doing business and facilitate the growth of our industry even further. This is needed for films, events, licensing, et al.‚ÄĚ
‚ÄúWe need to learn to collaborate as an industry. We need to collaborate with competitors at times so collaboration and competition can coexist. The scale of industry is such that innovation and disruption is bigger than what any single one of us can achieve. We need to form partnerships and collaborate. We need to become comfortable with data because we need to bring in more transparency, authenticity and objectivity to our data. If a new-age entrepreneur comes to us, we are sceptical of his idea or technology. If someone approaches us with a new way of measuring say our audiences, we are dismissive. We need to change this attitude. We need to change this mindset.‚ÄĚ
‚ÄúFinally, my third ask is that as a society let us learn to laugh at ourselves; sometimes loosen up a little. This is an industry that has creativity at its core and we will be able to scale greater heights when we learn to afford creative people some leeway. We must operate within a larger boundary towards our responsibility to society but be cognizant to not take ourselves too seriously, lest we stifle the creativity that lies at the heart of society.‚ÄĚ
Vats began his keynote by saying ‚ÄúAs industry leaders, we take pride in setting huge billion-dollar milestones that we hope will make others ‚Äėrespect and admire‚Äô us more. We hope that the government will take notice of us, we hope that our boards and promoters will reward us, we hope that leading talent will work with us and so on. But if you step back and think about the linkages our sector has with other sectors, the role it plays as a force-multiplier, the sway we have over our audiences ‚Äď every Indian around the world and others with a shared culture ‚Äď we suddenly realise we are far more important than a number or a target.‚ÄĚ
Deconstructing this in terms of numbers, Vats said, ‚ÄúOur industry has added over Rs 50k crore in output in the last five years and has a revenue size of Rs 130-135k crore. Indirect and induced benefits to the economy of the total industry size are approximately Rs 450k crore, with a contribution of 2.8% to GDP. The industry also employs, across both formal and informal sectors, 1-1.2 million people, contributing significantly to India‚Äôs job creation. This is good, but not as important as what I am going to say:
Did you know that by several estimates, video streaming accounts for over 50% of total mobile internet usage in India? This is expected to touch 75% over the next 3-years. Today itself, the contribution of data to telco revenue stands at 20-25%. Imagine what will happen when VR becomes a commonplace phenomenon?
Travel and Tourism is a $150-billion industry and a significant employer for the country. By some estimates, it is responsible for approximately 9% of the country‚Äôs jobs. Did you know that after Padmaavat, several newspaper reports indicated that the interest around Khilji‚Äôs tomb in the Qutub Complex in Delhi has actually increased substantially?
Let‚Äôs look at the garment industry. Did you know that after Padmaavat ‚Äď bear with me for bringing it up again, but we are, like all Indians, immensely proud of that project ‚Äď has reignited an interest in Rajwada dresses. It‚Äôs too early to say, but it might ignite a renaissance of sorts in age-old techniques of embroidery that would have otherwise been lost.
There are other sectors ‚Äď the satellite industry, set top boxes and other equipment, including telecom handsets, events, food and retail, that we drive.
While I stated earlier that the direct revenue generated by the media and entertainment industry is approximately Rs 130-135k crore, when considering the total economic impact, including direct, indirect and induced benefits, our contribution is almost 3.5 times that, today.
Imagine our multiplier effect when India becomes a 5 trillion dollar economy in the next 8-9 years?
There is another aspect to our industry that makes us special. I am talking about the nature of jobs we can generate. Today we employ 1-15 million Indians directly and indirectly. Let‚Äôs say we‚Äôll add another million over the next five years. This might seem small given our total workforce of 460 million but these are jobs that are non-routine, meaning they are the least likely to be automated, given their nature.¬† More importantly, most of these jobs will need ‚Äėon-the- job training‚Äô, meaning that we don‚Äôt need to wait for our education infrastructure in the country to catch up.
So we‚Äôve spoken about why size is not always the most important asset. We‚Äôve spoken about our role as a force multiplier. We‚Äôve spoken about the quality of jobs we will create. I want to leave you with one last point before I conclude. You see, the question to ask is given our role as force multiplier, how much steam do we have left? Because, if the engine starts to weaken, it is obvious that our role as a force multiplier will also reduce. Well there‚Äôs a lot of good news on that front.
Our ad spend to GDP ratio is still 0.4% compared to 1% in developed economies.
The total sector is approximately 1% of GDP compared to 2.5% or so in developed economies.
While our TV audience (780 million) is bigger than that of the total population of Europe (745 million), we still have only 64% penetration with 183 million households. With electrification progressing at a blistering pace, imagine the future growth.‚ÄĚ