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It’s showtime as TV gets the eyeballs & the big bucks

12-March-2004
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It’s showtime as TV gets the eyeballs & the big bucks

India’s entertainment sector is on the upswing with a 15 per cent annual growth rate, touching Rs 19,200 crore in 2003, according to a FICCI-Ernst & Young report to be tabled at the three-day Frames 2004 global convention in Mumbai on Monday.

The television sector is almost three times the size of the movie segment, touching Rs 13,000 crore. The segment grew at 14 per cent, with subscription revenues at Rs 8,433.3 crore. This includes cable TV subscription fee and revenues for broadcasters from pay TV. Advertising revenue grew 12 per cent to be at Rs 4,216.7 crore. The balance Rs 350 crore came from TV software exports, according to the report.

The film industry, which had a bad time a year ago, grew 15 per cent to touch Rs 4,500 crore. Overseas earnings accounted for Rs 500 crore. Despite an increasing share of revenue via exploitation of satellite and music rights, theatres still contributed 80-85 per cent of the total revenues. “The film segment was predicted to stay flat in 2003. But there were several factors which fuelled growth. We had more multiplexes, a better distribution chain and some good quality movies. A few states also reduced entertainment tax,” said Farokh Balsara, head, media and entertainment practice, Ernst & Young.

The FICCI-Ernst & Young report has for the first time conducted an online survey, interviewing 48 players from the industry, and using secondary sources.

The report has suggested some reform measures to boost the film industry. It has suggested that entertainment tax be reduced and rationalised; box office collections go online like the lottery system so that there is transparent reporting of ticket sales; and tax benefits extended to single screen theatres. “There can be an online ticketing platform, particularly in cities. For this purpose, theatres can tie up with IT companies. Earnings for these companies can come from processing and peddling data from box office collections,” said Mr Balsara.

The music sector stayed flat at Rs 1,000 crore, the report said. Piracy, excessive dependence on Hindi films, and huge cost of acquiring Hindi film rights plagued the industry.

Radio, which was supposed to grow 40 per cent, saw a 15 per cent rise. Currently, radio accounts for only 1.5 per cent of the total advertising pie. Radio, however, has the potential, to grow almost 5 per cent by 2008 if the licence fee structure is done away with and restrictions removed.

The entertainment sector is projected to grow at 17 per cent year-on-year for the next five years, according to the report. Films will grow at 15-17 per cent during the period. “Exploitation from abroad will not see fast growth unless producers get into the overseas distribution business. The trend now is to sell the rights. But there is some reform in areas like multiplexes and production efficiencies. Besides, digital distribution of movies is spreading. Only one per cent of the theatres in the US are digital, though it started there five years back. In India, this, however, will gain momentum,” said Mr Balsara.

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