Entertaining hopes & fears

Written by Sudipta Datta | Updated: Dec 21 2011, 08:44am hrs
Is entertainment recession-proof With data pouring in that the Indian economy is slowing down, and growth targets downgraded to about 7.5% or less, at least one sector of the media and entertainment industrytelevisionadmits that it has felt a perceptible slowdown since the second quarter. With television heavily dependent on advertising, and ad spending shrinking, especially in auto, real estate and consumer durables, television is likely to see a dip in growth. Still, analysts and television insiders say the industry, worth R29,700 crore in 2010 and expected to grow 15.5% in 2011, is likely to see growth in double digits and will continue to dominate the M&E industry. For the film industry, 2010 wasnt a good year, and the industry de-grew from R8,900 crore in 2009-10 to R8,300 crore in 2010-11. But the sector appears to have bounced back in 2011 and analysts say the industry might touch double-digit growth or a tad under this year, backed on the fact that there have been more hits than losses in the year. For the radio industry, there were some key policy announcements, especially on FM phase III and the players are all waiting for some clarifications on how the bidding for phase III will be held. The slowdown is bound to affect radio and with phase III on the anvil, players expect mergers and acquisitions and consolidation in the sector.

TELEVISION

The television industry has seen a broadbased slowdown in advertising and this dampening of ad growth will impact television. As per Jehil Thakkar, head of media and entertainment at KPMG, a lot of the top categories that advertise on TV, like auto and real estate, have been impacted by the harsh interest rate regime and seen a slowdown, thus shrinking their ad spend. Even telecom, which advertised a lot last year, he points out, has not seen many launches this year and thus ad spending has shrunk. Overall, TV may see close to 9-10% growth in 2011, says Thakkar, indicating that the TV growth rate will come down. The industry has noticed a perceptible slowdown from the second quarter onwards, admits MK Anand, CEO, UTV Broadcasting. But we at UTV are still in a growth phase, so we wont be impacted, he adds. UTV Broadcasting launched two new channels this year, UTV STARS, on Bollywood (the pull we got from this channel surprised us), and UTV Action in Telugu, tapping the regional television front that has opened up many possibilities for national players. The national players are looking at regional TV closely, says Anand, adding, There is space for specialised channels and there is growth in regional. We will be looking at these opportunities.

For television, among the general entertainment channels, which garner the largest chunk of the advertising pie, Sony Entertainment Television ruled the ratings chart for several weeks, with its reality show Kaun Banega Crorepati season 5 hosted by Amitabh Bachchan doing very well. With KBC ratings high, Sony, which already had popular shows like Kuch Toh Log Kahenge, Bade Achche Lagte Hain and Saas Bina Sasural, launched two fiction shows to ride on its successDekha Ek Khwaab and Parvarish. Market leader Star India launched new programming and channels (Life OK) and closed one (STAR One) to consolidate its position. It has also announced a reality show with TV recluse Aamir Khan, the details of which are being thrashed out with the actor and is scheduled to air sometime next year.

FILMS

The R8,300-crore film industry did well overall with a good mix of large and small films and more hits than losses. Many in the industry are already claiming 2011 to have been the best year for Bollywood in years. The turnaround, if one could call it that, came in July with four diverse filmsDelhi Belly, Murder 2, Zindagi Na Milegi Dobara and Singhamperforming very well at the box office. From July onwards, Bollywood has had good returns on investment, barring a dull October, according to a leading exhibitionist. Its been an interesting year for Bollywood, says Siddharth Roy Kapur, CEO, UTV Motion Pictures. From the UTV stable, he says there were two path-breakersNo One Killed Jessica, an issue-based film centered around women, and Delhi Belly, an A-rated English film dubbed in Hindi which did the business of a blockbuster. Kapur says the success of these films will encourage directors to push boundaries, as people are thirsting for different types of cinema.

Its been the year of women power for Bollywood, with Ekta Kapoors Balaji clearly walking away with the most talked about film of the year award with The Dirty Picture. Grossing R70 crore and counting, Balaji Motion Pictures CEO Tanuj Garg says the company was confident of the film with Milan Luthria in the directors chair and Vidya Balan in the lead, but admits it was the marketing push that helped the film get the numbers. We want our films to be fun, edgy, unconventional, and are very careful about these three elements before greenlighting a project. Also, the film has to be entertaining. The films we have releasedLove, Sex and Dhoka, Once Upon a Time in Mumbai, Shor in the City, Raagini MMS and The Dirty Pictureall have these attributes, Garg points out.

The other surprise hit of the year was Zoya Akhtars Zindagi Na Milegi Dobara, which, according to PVR joint MD Sanjeev Bijli, is our number one film of the year in terms of collections. The film, released in July, was running at some theatres in the metros even in September. The film industry has bucked the slowdown trend somewhat, says Thakkar. Bijli says October did dull business, but barring that, footfalls at multiplexes have steadily increased and people are watching all kinds of films, from formula to the niche. If Zindagi topped our list, Bodyguard and Ready were on second and third spots. There have been more hits than misses this year, he points out. A clutch of films grossed R50 crore and more, keeping the industry hopes for double-digit growth alive this year. Even Ra.One, despite mixed reviews, grossed R240 crore worldwide, according to Kamal Jain, CFO, Eros Entertainment, which co-produced the film. Bollywood is poised for a good growth in the next three to five years, Jain points out, riding on several reasons. There is a huge increase in the number of screensin Mumbai alone, screens have doubled from 36 to 62and so most medium-to-big films are getting a wide release, thus increasing box-office collections. If Ra.One released in 3,000 screens worldwide, a film like Bodyguard released in 2,500-odd screens. Monetisation has improved and satellite rights have helped producers/distributors earn a tidy sum even before a films release. For example, Dharma Productions has reportedly sold the satellite rights of the Agneepath remake starring Hrithik Roshan for R41 crore to Zee; Shah Rukhs Ra.One (sold to Star) fetched R35 crore for Eros; and the Aamir-Kareena starrer from Excel Entertainments Reema Kagti was sold for R38 crore. One impact of corporatisation is that the big studio houses are concentrating on improving distribution and marketing, says Jain.

That Hollywood too is taking a keen interest in the region was evident from the fact that the studios have all increased their launches in India, and Hollywood A-lister Tom Cruises red carpet trip to India to promote his latest Mission Impossible 4 is an indication of things to come. Hollywood studios have renewed their interest in BollywoodDisney is already set to buy out UTV; others like Fox, Viacom have announced co-production deals. Sony, which had a mixed year in India, says it was celebrating the unprecedented success of Steven Spielbergs Tintin, which grossed an unheard of R26 crore in India. For animation films, we are used to doing business worth R5-6 crore, so this has been a huge bonus, admits Kercy Daruwala, MD, Sony Pictures India. Sony released a slate of 12-13 films in the year, most launched on the same date and time with the US, also an indication that Hollywood is taking the market seriously. Daruwala says 2012 would be a busy year for Sony Pictures, with at least 15 films set for release, including popular franchises such as Men in Black 3.

RADIO

For the R1,000-crore private radio industry, the year 2011 gave it some hope for the future with policy announcements on phase III finally being made. We are getting ready for the bidding process, says Apurva Purohit, CEO, Radiocity, and are wondering how the e-auction process will happen, how will we expand, consolidate Insiders say the next couple of years will be a phase of consolidation for the industry. It will be a year of preparing to take the next leap, says Purohit, expect some mergers and acquisitions. Thakkar of KPMG says radio is likely to see growth because of its small base and the phase III announcement should perk it up. For Purohit, the resolution of the music royalty issue was another highlight of the year. The ruling came in 2010 and most players felt the benefits in 2011. We are clearly seeing the top two or three networks becoming profitable on the back of increased revenues and cost rationalisation, she says. But like the other media and entertainment sectors, radio too is seeing signs of a slowdown. When advertising tightens its belts, we are bound to feel the impact, she adds.