“The goal is to reach 600 mn broadband subscribers”

To achieve this by 2020, the govt will invest about Rs 20,000 cr in the next 2 years, says R Chandrashekhar, Secy, Dept of Info & Tech

e4m by Aditi Malhotra
Updated: Nov 1, 2012 8:09 PM
“The goal is to reach 600 mn broadband subscribers”

The CII Media and Entertainment Summit kick-started its second day with a session titled, ‘The Game Changers: Taking M & E Industry to USD 100 billion.’ The session was chaired by Man Jit Singh, CEO, Sony Entertainment Television and hosted John Rose, Senior Partner, MD and Global M & E Head, BCG and Dr Bharat Anand, Professor, Harvard Business School, to deliver the Keynote and Special Address respectively.

R Chandrashekhar, Chairman, Telecom Commission and Secretary, Department of Information and Technology, as Chief Guest, addressed the audience, following which Smita Jha, Leader, Entertainment & Media Practice, PwC India presented from the PwC Report on the M & E Industry.

On the panel were KVL Narayan Rao, Executive Vice Chairperson, NDTV and President, NBA; Jyoti Deshpande, Group CEO and MD, Eros International; Sunil Lulla, MD and CEO, Times Television Network; Sanjeev Lamba, CEO, Reliance Entertainment; and actor Anil Kapoor. All the experts took stage to discuss the state of preparedness of Indian media and entertainment to reach the critical 100 billion dollar mark.

Singh of Sony Entertainment Television began by saying that as incomes are rising in India, one of the things that is going to be in demand is entertainment. So, the growth of the entertainment business from the current 50 billion dollars to 100 billion dollars is certainly achievable. Stating figures, Singh said that out of a total universe of 220 million households in India, 143 million have televisions, indicating that the growth in television and increasing viewership is going to continue for a long period of time. He also added that there is huge potential to grow revenues in the advertising space.

“At this point, television advertising as a percentage of GDP is about 0.48 percent in India and in developed nations, it stands at about one percent. There will be rapid growth in advertising spends because, for advertisers too, television is one of the most effective methods of reaching out to the audience,” he further added.

The only constraint, Singh felt, which could potentially reduce growth in viewership, is interrupted power supply. Talking about the mandate of digitalisation by the Indian government, Singh said, “For us, in the broadcasting sector, 70 per cent of revenue comes for advertising. In most countries, it’s 50:50 ratio.”

He said that with digitalisation and transparency in the number of subscribers, this model is achievable. Elaborating further on the advantages of digitalisation, Singh said that it will bring an end to one of the biggest limitations in the broadcast business which is high carriage fees. Simultaneously, the consumer will also benefit, not just with better signal but with greater choice.

In a special address, Anand of Harvard Business School prefaced his remarks by saying that one must keep in mind that geographies are different, organisations are different and parts of the media and entertainment sector are different. “India is in many ways different from China or Brazil or the United States. And, what happens to a Business Week is different from what happens to The Economist.” He then said that an important inference from eighteen years of digital in the US is that more or better technology does not guarantee that companies will make more money.

He then asked the audience to challenge the presumptions of the impact of digital on core businesses. And, the fact that readers or viewers migrate from traditional media in this growing digital age, Anand said, is simply not true. The tussle between print and digital media is caused more by the pricing, than the product itself, he added.

Highlighting the efforts of the government in tackling the low level of broadband penetration, Chandrashekhar, the Secretary of Information Technology and Chairman Telecom Commission said, “There is now a clear telecom policy which sets out certain goals and has also initiated certain steps in that direction. The government itself is investing big money into making this broadband revolution happen.”

The goal is to reach 600 million broadband subscribers by 2020, he shared. And to ensure that this does not remain only on paper, the government is investing around Rs 20,000 crore during the course of the next couple of years to take broadband optical fibre down to villages. The government’s role, he said, would be that of a facilitator and the last mile movers would be cable and telecom service providers. “An important lesson that the telecom sector has learnt is that you have to bring costs down to an affordable level to cater to a country like India,” he said.

Chandrashekhar put under the spotlight some of the key challenges in the digital space. While stressing on the battle between content and carriage commerce, he said, “The levels of carriage fees warrant a closer look.” It is thus, essential to find ways to reward innovators and content creators and providers in a manner which is conducive to the activity of content creation.  Protection of IPR, copyright and piracy are also areas where regulation must be worked through.

Rao of NDTV and NBA said that reaching the 100 billion dollar figure is an ambitious target. He emphasised on three things that need to be focussed on for this to happen. “Advertisers need to recognise that audience has grown hugely from 100 million, which at this point forms the base at which we did our advertising to about 500 million today. Rates need to go up,” he said.

Rao echoed Chandrashekhar’s and Singh’s views on carriage fees, which, he reiterated, was placing a huge burden on television broadcasters. In his final point, Rao spoke about the need for alternate sources of revenue.

Following Rao, Lulla of Times Global Broadcasting stated the importance of ‘attitude’ in this phase of economic shift. “We’re famous, we’re world famous. But, we’re only world famous in India because economic value doesn’t spill out beyond this country,” he said. Lulla also added that there is little or nothing being done to build the pillar of content protection and that there is need to collaborate, partner and compete.

Underlining the need to concentrate on export of content, Anil Kapoor said that with a plethora of talent, both in terms of artists and content creators, India has a huge opportunity ahead of it in designing and generating content for the global market.

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