Entertainment enterprise

The Financial Express
Posted: 2008-02-09 23:57:22+05:30 IST
Updated: Feb 09, 2008 at 0015 hrs IST

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: When billionaires come together, industries shake. The decision by billionaire investor George Soros to buy a 3% equity stake in Anil Ambani’s Reliance Entertainment for an audacious $100 million has indeed shaken up the sector. In Soros’s league, it is a first. Go to any film studio in Mumbai or gaming café in Bangalore, and you can see signs of a boom in India’s entertainment sector. It is a boom driven by heightened consumer interest coupled with new avenues for entertainment. This, even while that ol’ faithful Indian staple, cinema, thrives as never before, defying all dire warnings of the film industry being swamped by globalised fare from America. No sir, Indians love their movies, and are only too happy to make leisure space for newer fascinations.

What Soros’s investment signifies, clearly, is the availability of global capital—so long as the financial structures are in place, something on which the entertainment industry has shown all the laxity of any creative enterprise. Bean counting may be the last thing on the minds of the leading lights here, but it’s time they got their act together on balance-sheets and suchlike. According to PricewaterhouseCoopers, a consultancy, the Indian entertainment industry has a turnover of $10 billion. The industry will be worth a projected $13 billion by 2010. While fuzzy one-off projects with diverse contributions and free-associative space for ideation may still be more conducive to creativity than the rigid structures that fixed-resource studios and corporatisation imply, there is ample business sense in the creation of finance vehicles that can use modern risk management tools and strategies, which the industry remains unacquainted with. Reliance Entertainment, on its part, is an experiment that others should watch. It has more than 100 theatres across India, promising a “space age” experience, and plans an equal number in the US. It has an FM radio network that has clambered on to airwaves where none other has dared to (in J&K, for example), and has businesses ranging from gaming portals and post-production facilities to animation and TV production units. And, yes, it has canned some mass entertainers as well, though this is a market of fine sensibilities that are less amenable to corporate crunch work. It is a well-funded conglomerate that could serve as a financial model for others.