The FICCI-KPMG India media and entertainment industry report 2011 points to a very important clue: content, the king, has gone into exile and needs to be cajoled back into the film business. Of all the media and entertainment businesses, film is the only segment that has stagnated and seen a decline from 2009-2010. A 3% fall in the film industry size (R93 billion in 2007 to R83 billion in 2010) when mapped against the fact that other media and entertainment businesses such as TV (grew at 12% CAGR for the year 2007-10), print (6%) , radio (11%), music (5%), animation and gaming have all grown, is a serious cause of concern.

This points to the fact that a growing industry needs some serious steering from leaders?producers, corporate houses, exhibitors, government, directors, stars and writers?to bring the king back from exile, which has seen the film business decline in spite of the year seeing growing opportunities for producers, like satellite rights, ancillary revenues such as ringtones etc and also the recession receding.

Several issues have been raised in the recently organised FICCI FRAMES 2011. We highlight some of the key problem areas.

Lacking scriptwriters

Stars plus marketing and advertising techniques can guarantee a good opening to a film and attract the audience to the theatre but what makes them like what they have come to see is the content. Hence, it is important that appropriate importance be given to different elements of film making like content creation, music, production design and editing. The oft-repeated grouse is that movies have become less about the story unless it is one of those small, independent movies where the story is really the star. There is a huge dearth of good scriptwriters and the demand-supply gap has not enriched the select scriptwriters who have actually performed. The valuation that a writer gets compared to his contribution does not seem to be working, with scriptwriters moving on to more lucrative alternatives.

The need, therefore, arises for investors and corporate houses to play the role of studios in Hollywood and use their deep pockets to invest in script development, buying book rights and acquiring great content wherever it is spotted. There are also credit issues, where writers struggle to get presence in promotional material and campaigns. A celebratory nod for writers? work needs to be in place as their success ensures employment for everybody. There is a great need for associations such as FICCI to play a larger role, say through design workshops and competitions that help the industry mold fresh talent.

Waiting for the next Sholay

A visible change in the film business over the past few years has been the shift of power from the producers? hands to those of the actors. Actors lead the way as financing for an average project depends on the actor who is on board a particular project. The remuneration that they get places them on top of the hierarchy. Some industry analysts feel that this leads to content-related issues as sometimes stars tend to use their seat of power to make changes in the script, to give themselves superior importance. In such an environment, it is tough to expect the next Sholay to emerge where all the characters are striking.

Cinema has been left far behind by cricket and it needs a real milestone to get back into the game. The current environment points to a direction where if a Salim-Javed writes the equivalent of Sholay, the star will compromise the quality of the product in quest of superior footage, and the producer or director will comply quietly as the star drives financial backing.

Unlocking profitability

The benefits of monetisation have percolated to the big players who are able to monetise great content by extracting astronomical satellite rights fees, licensing agreements, remake rights for regional versions, gaming, publishing rights and so on. While the big players have more scope to maximise value from their well-established brands, there is a need for smaller and medium-sized producers to derive more value from their properties. For this to happen, communication between content providers and those who help monetise (like advertisers, networks and retailers) needs to increase. Gradually, the Hollywood system of agents may come into being as smaller producers, actors, writers, directors and other creative talent cannot maintain the infrastructure that bigger players can.

The film business is changing all across the world, with DVD sales and hence revenues from the home entertainment business declining. Then there is Netflix, there is Redbox; every month, you have a new technology changing the way people watch movies, and the industry will have to take cognisance of these changing technologies. The challenge is to install a creative storytelling process that coexists with the new business language, which has to be evolved.

Getting government support

At a time when the film segment has shrunk, the government needs to recognise its soft power and support it. The perception of the government as well as the public has to change, where they recognise that only select film professionals enjoy wealth and power. After all, individual players? limited access to institutional funds makes it difficult for them to raise capital for their projects. Plus, piracy continues to be a major concern. The very technological advancement that used to arrest piracy keeps opening new avenues for it. A public-private partnership is needed to root out this menace. Meanwhile, an increased pressure for supply of film content causes the quality of content to suffer, poor enforcement of intellectual property laws hinders the ability to monetise creative works, and regulatory hurdles like different entertainment tax rates in different states don?t help. Finally, the Cinematograph Act of 1952 has become archaic and needs to be revamped to take cognisance of emerging technology.

Amending copyright laws

It is a fact that India?s copyright laws are outdated and need to be changed. However, for any change to be effective, new laws have to be widely accepted by the film industry. The changes need to meet the financial goals of all stakeholders?authors, composers, producers and the networks. This is proving to be a tall order.

Educating investors

Commercial banks, NBFCs and high net worth individuals are waiting in the wings to finance film projects. To make sure that they regularly do business with the film industry, they need adequate information and reliable advisories. They need education in the content development process. They need a database on different players? credit-worthiness (something that?s long overdue).

The past year can be seen as a flash in the pan as the industry remains on a growth trajectory but it is also a strong reminder that all is not well with it. Unless a concerted effort is made, it may get left behind Hollywood films, IPL, books etc. We do think that for the stakeholders that hang on, there will be long-term fruits such as new content distribution platforms, 3G rollouts and the global linkages that the film segment is forging.

The author is director, FICCI Entertainment Division