The entertainment & media industry had a high-adrenalin beginning this year. After all, the year before was stellar; the industry leaped ahead of the Indian economy and most other industries. A PwC-Ficci report applauded the E&M industry?s growth of 17% in 2007, 2% more than what was forecast. The industry bulked up to Rs 5,13,00 crore from Rs 4,38,00 crore. The report predicted an average 18% growth for the industry for the next five years. But then, the report didn?t budget for a global meltdown. So, how did the E&M industry fare in 2008 and what may we expect in 2009? Read on.
Films: content, please
It wasn?t a particularly good year for Bollywood, and the financial crisis and the terror attacks just made it worse. So, don?t be surprised if Shah Rukh Khan is holding press conferences even a week after Rab Ne Bana Di Jodi released. Though Yash Raj Films has sent out a release that the film grossed Rs 90 crore worldwide in its opening week, the fact is Rab… was expected to have an even better opening with its 1,200-print launch and, according to analysts, mixed reviews and the terror attack have been keeping people away.
Audiences have also been ruthless with huge star casts?both Tashan, starring Akshay Kumar, Saif Ali Khan & Kareena Kapoor, and Bhootnath with Amitabh Bachchan, failed at the box-office?and patronising smaller movies with great screenplays. ?Films like Oye Lucky! Lucky Oye! are having a great run,? says UTV Motion Pictures? CEO Siddharth Roy Kapur. One of the bigger hits of 2008 has been Big Pictures? Rock On!, which grossed Rs 35 crore at the box-office.
Both Kapur and Navin Shah, CEO, Percept Picture Company, agree that there?s a greater focus on stories and on marketing of films. ?There?s a lot of emphasis on marketing a film to the core audience,? says Shah.
But Pyramid Saimira CMD PS Saminathan says high-profile marketing has no relevance to success. Also, Saminathan believes that the financial crisis is not necessarily a bad thing for the industry. ?The meltdown has brought a sense of reality back to this crazy industry. If this financial pain continues for some time, hype will get less importance and quality more importance.?
As it turns out, stars are already readjusting fees, and greenlighting of projects are being kept at a minimum. ?We are seeing a trend where people will become more diligent and invest in films that make sense,? says Sanjeev Bijli of PVR Pictures.
In 2009, say experts, expect fewer but better movies. Also, there is a shift happening in regional movies. Says Farokh Balsara, head of media and entertainment at Ernst & Young: ?The regional movies space is picking up momentum. Big production houses are now opting to make Bengali, Marathi, Gujarati films. There?s a lot of potential in that space and the industry is waking up to it.?
TV: dressed for shakeout
If the entertainment & media industry has grown at 17% in 2007, TV had a growth of 18%. There was an unprecedented spurt of general entertainment channels and an explosion of new content in the industry. Will the TV industry sustain its growth momentum in 2009? The major players in the space are preparing for a difficult 2009. ?A lot of the costs would need to be relooked at,? admits Albert Almeida, business head, Sony Entertainment Television, speaking for the industry. ?Absurd amounts are being paid for channel placements and distribution,? he adds. With a glut of channels, industry experts expect a ?shakeout and consolidation? in television. ?In 2009, the players will have to make sensible investments, ensure margins are protected and steady the ship,? adds Almeida. Agrees Balsara: ?The new channels have clearly taken on lot more risks than they could afford. In 2009, players will take a close hard look at what people are doing and their compensation packages.?
Radio: opportunity in the air
In 2008, says Apurva Purohit, CEO, Radio City 91.1FM, ?radio finally became a network phenomenon with a presence in 91 cities across the country, leading to advertisers increasingly looking at it as a reach medium vis-?-vis a frequency medium alone.? And with a slowdown on us, Purohit feels radio is positioned perfectly to help clients reach out to their target audience. ?As a key strategy for business in such an environment, marketers are increasingly embarking on micro-marketing initiatives with a concentration on markets which deliver the maximum input-output ratio. They are realising the cost-effectiveness of radio and looking at deploying radio to meet their business objectives,? she adds. Agrees Thomas Abraham, COO, Red FM: ?Radio will not be as badly affected as other media because it offers a more cost-effective mode of advertising when compared to TV or print, especially for local or retail advertisers. A slowdown will be an opportunity to look for more innovative use of media.?
Music: jarring note of piracy
Ask Savio D?Souza, secretary-general, Indian Music Industry, the change he wants to see in 2009, and he quips: ?I dream and wish that in 2009, the music industry is able to balance between marketing and enforcement like it has never done before, as without this balance the industry will be doomed.? There?s a reason he makes this wish. In India, the music industry declined from Rs 1,200 crore in 1999 to Rs 600 crore in 2005. Piracy figure is stagnant at Rs 600-Rs 700 crore even today. And yet, 2008 highlighted that music is being consumed like never before as various delivery platforms emerge and each delivery platform created newer revenue streams like mobile revenues, Internet revenues, public performance revenues, radio revenues etc. ?Each of these revenue streams are supposed to create better earnings for the music industry but, unfortunately, this has not happened,? says D?Souza. With enforcement still loose, ?the music industry must realise that each of its products are competing against pirated products and all efforts to fight this battle by dropping prices have failed,? points out D?Souza. ?In 2009 if the music industry needs to see a growth in revenues it needs to design a strong enforcement strategy for each segment of revenues,? he adds.
Gaming: more players come in
In 2008, the number of gamers in India grew 10 times, according to industry figures. ?There are 10 million gamers in the country today,? says Rohit Sharma, COO, Zapak. ?There is a huge traction of advertising on the gaming platform, too,? he adds. With the gaming industry worth about Rs 100 crore?globally, it?s a $50 billion industry?there?s immense potential for growth. At Zapak gaming cafes, gamers are spending Rs 2,000 on an average per person. With the consumer spending sentiment being negative, it?s bound to have an impact on gaming, but with the sector still in growth mode, the players aren?t too worried yet.
The burden of new media
In 2008, the entertainment and media industry has been tapping into the potential of new media. With Internet and mobile entertainment growing, there?s a big thrust on digitalisation, says Balsara. ?In the film & music industry, there?s a move to digitise archives so that content can be exploited on multiple platforms. But then, with advertising already starting to slow down, new media will be hit hard, according to experts. Already, in the case of films, revenues from satellite, home video, music and overseas rights have been hit due to the meltdown.
For all sectors, however, the key issue, says an analyst, is to bring down costs and de-risk to the extent possible.