The COO of Star India, Sanjay Gupta, has said that the media and entertainment industry is still far from reaching the target of USD 100 billion.
Addressing delegates at the CII conclave today, Gupta revealed that from 0.8 percent of GDP three years ago, the industry had resolved to grow to 1.5 percent within a decade.
“But in the past three years, media as a percentage of GDP has instead fallen by two basis points and the USD 100 billion dream has continued to remain distant,” he added.
Gupta said the media and entertainment sector has barely seen any new entrants and only around USD 4 billion FDI during the past 15 years. “To garner USD 100 billion, the industry needs to invest at least USD 50 billion over the next decade,” he added.
The COO of Star India pointed out that with media and entertainment remaining an unattractive destination for investments, investors have no interest to invest in a fragmented and unprofitable business. “A bizarre challenge confronts us here, however,” Sanjay continued. He said although Punjab and Haryana contribute large numbers of Kabaddi players, one cannot add more teams based in either of these two states because they do not have a single indoor stadium that could host a Kabaddi match. “In Mumbai, the game is hosted at the NSCI Dome, but the biggest constraint is the availability of this facility for a reasonably long period of time. One venue for a city with more than 1,000 Kabaddi clubs simply does not make sense. In this case, consumer interest and the ability to invest are no hurdles, but the fact that the sporting infrastructure required is simply non-existent,” he added.
Stating that the movie business is no different, Gupta said, “With around 7,000 screens, India has one of the world’s lowest screen densities. Despite breakthrough movies such as Queen, PK or Bajrangi Bhaijaan, revenues are stagnant, although the cost of producing these movies has soared dramatically in the past decade. Therefore, a $2 billion industry that sets a billion hearts racing earns zero profits.”
“Television distribution is roughly a third of the total value of the media industry. In the past few years, immense investments have been made in both DTH and the cable business. But the tragedy of this sector is that even after many years of continued investment not a single company or business makes any money,” he added.
Concluding his final remarks, Gupta said that there is an urgent need to make distribution profitable, position animation as the next wave of export oriented growth, support a serious scale up of exhibition screens and sports stadiums and allow content innovation in radio.