At the 18th edition of FICCI Frames, experts from the broadcasting, film industry and government took a reality check on the M&E industry and discussed the shortcomings and challenges with respect to certification, monetisation on content creation and regulation. Titled ‘Do the Lions Still Roar- A reality check for Media and Entertainment Industry & its contribution’ it was moderated by Nalin Mehta, Consulting Editor, The Times of India with panelists comprising esteemed names such as Ajay Mittal, Secretary, Ministry of Information and Broadcasting; Sudhanshu Pandey, Joint Secretary, Department of Commerce, Ministry of Commerce and Industry; Raj Nayak, CEO, Colors; Siddharth Roy Kapur producer and President, The Film and Television Producers Guild of India; Anurradha Prasad, Chairperson and Managing Director, BAG Films & Media Ltd; Bharat Anand, Henry R. Byers Professor of Business Administration, Harvard Business School; Kapil Agarwal, Jt. Managing Director, UFO Moviez India Ltd and Harit Nagpal, CEO, Tata Sky
Mehta started off the discussion with a question to Nayak, asking, “How much of an impact on bottomlines, business wise and content wise, has digitisation had so far on your business?”
To which Nayak answered, “My philosophy is, content is the new water. TV is digitised. (The) Number of pipes of watching content has multiplied. When you look at digitisation people have a choice of watching content where they want. Currently TV (reach) is 180 million homes. There is headroom for another 70-80 million homes. When you look at the monetisation for digitisation almost 85 per cent is between Google and Facebook. For that 15 per cent maybe growth rate is 30-35 per cent but it is so fragmented that everyone is losing money. There are two things people will continue watching, breaking news and live speech or sports. And with so many pipes, you need water. So for content curators and creators this is not a golden but a diamond era. But the problem is when it comes to monetisation with so much fragmentation, I doubt how most of the platforms will survive unless, of course, they are able to get subscription.”
Nagpal even felt money can be made and moved on to government’s role, as he said, “The purpose of television digitisation was to create an infrastructure (which is digital) where the customer can make his choice and pay accordingly. We have created a box between the customer and the television. But is that addressable? Officially phase 1 and 2 are digitised which is supposed to bring in transparency. Money was to be divided between broadcaster, government and distribution platform. DTH is 33 per cent of phase 1 and phase 2 market. Two-third is sitting with cable. I challenge anybody today on service tax and entertainment tax collection that 33 per cent component of digitisation would be paying 80-90 per cent of the entertainment tax and the service tax and 66 per cent of digital cable sector in phase 1 and phase 2 would make 10 or 20 per cent of the taxes. Is that addressability? The job of the government (having created a hyper competitive scenario) is to create a level playing field and transparency so that money flows to rightful owners including the government.” He also indicated that the government shouldn’t waste its time in pricing.
This brought Mehta to touch upon the case on TRAI’s draft tariff order that’s going on in Madras High Court. Prasad, who is a board member at NBA, shared her concern about TRAI overlooking broadcasters’ problems with their focus always on telecom and stressed on the need for a separate forum for broadcasters.
She said, “The regulatory body hardly has time to handle broadcast issues. I, on behalf of NBA (News Broadcasters Association) have been asking for a forum only for broadcasters. It’s unfortunate that we don’t have it. Content needs to be curated. You need to do research, be innovative and hence spend money. Money is getting divested, we don’t get the money back. In India everybody has this habit of wanting everything for free. How do you create good content? The broadcasters and SMEs are all bleeding.”
At this point Pandey mentioned about the entire service sector largely remaining unorganised and founding its own way to grow. For the next phase he stressed on the need for consolidation of business and fair market practices and the availability of finances for the industry to grow. “The fundamental rule is level playing field. It’s happening gradually in India. Regulators for some sectors have come whereas it’s not there for many. But the fundamental philosophy behind the growth for the service sector industry is that somebody has to assume that role so that unfair market practices are removed and level playing field is promoted. Once you promote that and bring in transparency then whole lot of opportunities become available. This is one big picture where a country has to move on. This is accelerating now.”
Mehta then moved the discussion to the film sector when he asked Kapoor’s opinion on government’s plans to provide funding for subtitling of Indian films in areas of India’s cultural influence.
Kapoor strongly urged the government to leave that to the industry. “Where I think the maximum support should come in is tax regime, when you look at it as an infrastructure sector. If the multiplex sector is encouraged to make those massive capital investments and given a fair amount of tax holiday, I believe that the benefit to the exchequer in the long term will be so significant that it will override any temporary concerns over the revenue. If the industry can be looked as an industry that can enhance what is India’s story is overseas we will also come to the understanding that to impose restrictions on artistic freedom will cripple the industry in the long term. This is because creative people are already self censoring. So overall it’s a mindset issue. If this industry is looked at with a positive mindset it will find its way into every sector we are talking about,” said Kapoor.
At this point Nayak pointed out that there should be clarity whether it’s a censorship board or certification board. “I think that clarity doesn’t exist. You can’t have a body that first censors and have a body that decides not to release a movie,” he said.
Nayak added, “As a country we are progressing but as a society we are going back. The kind of movies and programmes that we used to do in the past we can’t do it today. It’s not that content is not available. But who are we fooling?”
Mehta then broached the topic of the unavailability of private news on radio. Prasad said that she has been on it for the past five years but there hasn’t been any positive outcome. She asked, “The government may have issues regarding security at least on the borders or on the north east. But why not on the mainstream radio stations?”
Mittal over here stated that it’s not that the news is not allowed but it should be sourced from All India Radio, “We should try to source our own news and be allowed to edit before it broadcasts. Let’s put it this way, news is allowed, not in a way private radio wants it to be. Let’s see how it works out.”
On the copyright topic he shared that a copyright board will be set up any day as he said, “Once copyright board comes into existence lot of issues, especially with content generators and distribution, will be addressed.”
Pandey added, “One agenda we have been pushing from the Ministry of Commerce and Industry is the issue of certification. There has to be clarity in the certification body and I am talking about sectors across. If you have that then the standard setting, rights certification or accreditation becomes transparent.”
Agarwal mentioned how the unregulated nature of digitisation back in early days brought in private industry who invested heavily on digitisation. He went on to add how in terms of theatrical entertainment the country was digitised from 2005-13 and that 9000 screens helped the industry create the Rs 100-crore club in 2008, Rs 200-crore club in 2009 and Rs 300-crore club in 2016 . He felt the need for 20,000 more screens for a country like India. He said, “But now it’s restricted only because of regulation because there are 70 approvals required. There have been instances where multiplexes invested heavily (on infrastructure) and took two years to get approval. Screens are growing at two per cent per annum. The moment we move from regulation to facilitation, immediately the growth will start. The growth has to happen all over the country. 20,000 screens are only possible when there is facilitation. That’s the main issue.”
Mehta ended the discussion by posing a question to Anand, asking, “You have seen disruptions caused by the digital world. Do you think we are missing the trick here?” To which Anand replied, “There are three trends which are important. First is content, everyone is a content company. (Secondly) Platforms, which take advantage of connectedness across consumers, typically enjoy exponential growth rates, which will outrace traditional growth in content industries. Third is blurring of industry boundaries where we call the quantum distribution of platforms of hardware and software is essentially now one game. The extent to which FB, Twitter and Apple are now making content (comes into) play, but it’s important to their core business. How do we think about regulation? It becomes much more challenging.” He added that he is seeing that different forms of content (short or long) is being charged at different prices at different moments to different consumers. “That’s a long way to go,” said Anand.