The world has changed in the last four months, and the media and entertainment industry has been hit hard. While cinemas, studios are still closed and will continue to be so for some more time, not everyone is comfortable with newspaper delivering at their doorsteps.
Advertising revenue, which is the industry’s lifeline, is anywhere down at 15-19% over the past few months. And the bigger challenge is the impact on jobs and livelihood of those impacted. An estimated 20% of the industry’s workforce may lose their jobs because of the Covid-19 pandemic and lockdown.
“This is the time for the industry to assure a fundamental shift in the way the M&E sector works and is perceived by the other world. The world needs to see us not just as an M&E sector of India but as a creative powerhouse that delivers globally and inspires the world. We do need to expedite some of the policy decisions that can help in the sector’s recovery such as a simplification of the taxation framework, adoption of a light-touch regulatory approach, infrastructure status to the industry and support to accelerate exports of films and games. We believe that we can be a 100 bn dollar industry by 2030,” said Sanjay Gupta, Country Manager and Vice-President of Google India at the 21st edition of Ficci Frames virtual summit.
Amid the Covid-19 pandemic, the summit was held virtually and discussed the ‘role of creative economy to revitalise economic growth’ with panellists, including Gupta of Google, Prakash Javadekar, Minister of Information and Broadcasting, Uday Shankar, President, The Walt Disney Company Asia Pacific and Chairman, Star and Disney, Anurag Thakur, Minister of State for Finance and Corporate Affairs, Sangita Reddy, President of Ficci and moderator Dilip Chenoy, Secretary General of Ficci.
Gupta emphasised that to realise the opportunity in the sector in India we need collective efforts both from within the industry as well as the government. He said that by limiting the significance of the M&E industry to just economic value or job creation and positioning ourselves in a fragmented way as print or TV or gaming or films, we have long ignored the true potential of this creative industry.
Acknowledging the achievements and growth that the industry has made over the years, Shankar said the biggest bane for this industry, especially for print, TV and now for digital, has remained its disproportionate dependence on advertising.
He said, “As the industry has grown, its dependence on advertising has grown. It has helped the growth of the industry, it has sustained industry and all the participants have benefited from it. But it's also been a bit of a distraction because globally where the industry has grown, whether it is newspapers and magazines, TV, or whether it is other forms of content delivery, they have benefited from building a direct-to-consumer relationship where the consumer pays for the product. In this country, and truth be told, all of us are guilty of this— we decided to be short-sighted to subsidise our product. And if this industry has to grow to the next level, I think the one thing that must be fixed is our ability and our desire to get people to pay for what they consume. That's fair. And that's the only way this industry can grow.”
Discussing how the sales setback for the industry is going to be very severe, he said this is one of the industries that people do not realise is going to be hurt very badly because of our disproportionate dependence on advertising.
He said our short-sightedness, and not the lack of creativity, is not letting our content go global.
“Our ambitions in the area of content remain really very small. We are very happy, winning the TRP or our BARC rating every Thursday. The content business has gone truly global and the opportunity to scale it up is much bigger. Today intermediaries have been marginalised and we have the technology and the ability to go direct-to-consumer and make it much bigger. We have not taken our ambitions to the global domain. Indian content, let us face, still doesn't travel globally. This is not for lack of creativity but because of our smaller ambitions and short-sightedness. I think the industry should fix that. Unless we start becoming a bigger player or factor in the global content consumption space, the business will always be suboptimal,” he said.
Emphasising on the expansion and creation of the talent funnel, Shankar said that the government needs to recognise the sector to be an important part of the economy, albeit a creative economy that can create jobs, businesses wealth, and can also create the soft power that leads to a greater and bigger and shinier brand India globally.
“And when we look to come out of the Covid crisis, that probably is the best opportunity to do a complete pivot and start thinking about it,” he added.
Echoing the same view, Thakur said the industry is totally dependent on advertisement whereas globally we can see a major income coming from distribution networks or the payment a consumer makes.
“While we create volume, we must also create value. Apart from Make in India, we also must be conceptualised and designed in India. There is immense potential for original content creation and simultaneous job creation by investing in the vernacular language segment of the entertainment industry. This represents an immense of opportunity for growth,” he added.
Thakur said the Atma Nirbhar Bharat Abhiyan economic package announced by the government will have a multiplier impact on the economy, including M&E, too.
He said the creative economy and related industries are high growth sectors if nurtured properly. The challenge before India is in the form of IP and copyright, digitisation and workforce and access to distribution networks.
In the end, comforting the production and shooting units of the industry, Javadekar said the government will soon issue SoPs to speed up resumption of film production in the unlock phase.
“The government has decided to help the industry in many ways. The government is coming up with a SOP for shooting films in India in the light of pandemic. To accelerate film making, it is also coming up with incentives in all sectors, including TV serials, film-making, co-production, animation and gaming. We will be announcing these measures shortly,” he said.
He said despite the crisis, the industry is going at a good pace.
“Our share in the global market is small but can grow phenomenally and there is a need for more entrepreneurs, founders and leaders in this sector to steer the industry forward and we need more innovation and origination,” he said.