Since yearends and beginnings are about reflections and resolutions, here are some from yours truly. In 2000, I was an assistant editor at Businessworld magazine, writing and editing whatever came my way — management, media, Internet, technology. A stint in Cambridge researching copyrights in digital music, at the height of the Napster era, helped me decide to specialise in media and entertainment (M&E) writing. Now in the tenth year of making my bread and butter from this business, it makes sense to revisit the reasons I chose this industry.
The biggest attraction of the M&E business is simply that it is very interesting and (no media writer will admit this) glamorous. It rests on two pillars — intellectual property (like pharma) and distribution strength (like telecom). The added attraction is the sheer force of individual personalities and their power to shift paradigms.
Think Rupert Murdoch, Sumner Redstone or Ted Turner or think Samir Jain or Subhash Chandra. Each one of them either created entire categories or changed the rules of the game to make the business larger and more profitable. That is true for other industries too. However, the impact of changes in, say, the editorial policy at a newspaper, or a film’s effect on society is not just about its revenues — but also about its influence.
In 2005 when the septuagenarian Murdoch said that the Internet is important, several billion dollars of big media investment started moving to it. Now, when he says that content cannot be free on the Internet, for the first time there are ayes — from content and technology companies. You could argue that it has made media one of the most egotistical and personality-driven businesses, not necessarily a great thing for shareholder returns. That is what a new book, The Curse of the Mogul, argues.
Maybe it has. But it also makes media a fun business to watch. And whether it is family-run (The Times Group or Jagran Prakashan) or professionally-run (Network18 or HT Media), the growth trajectory of Indian media companies remains the same. The top-20 Indian media companies are a mix of both (family- and professionally-run) and almost all of them have grown two-three times in size over the last five years.
This mix of personality, glamour and an economic underpinning that is not replicated easily in any other industry is what I enjoy the most.
The other reason for choosing M&E? I believed then (and now) that M&E has the potential to be to the Indian economy what information technology (IT) already is. Unfortunately, the industry has not delivered fully on that promise yet. Its contribution to GDP is about 1 per cent against 7.4 per cent for IT.
The good news is that growth has been very rapid in the last five years and will be faster going ahead. That is because the full impact of liberalisation and regulatory changes is just about kicking in. For instance, a 2001 policy giving multiplexes a tax break in Maharashtra gave a nationwide push to investment. The subsequent rise in collections by organised theatre chains and the increase in average ticket prices pushed the box-office revenues of Indian films by five times between 2000 and 2008.
Some observations? This is ironical, but it is impossible to critique the financial performance or strategy of a media company, especially publishing ones, without getting a sulky reaction from the owner or publisher. Newspapers and TV news stations tell everyone from the government downwards how to do their job. That is precisely why it is paradoxical that media owners should be thin-skinned.
The other observation — that journalists, especially business journalists, are extremely ill-informed when it comes to understanding the media business. They simply cannot see it, except through the prism of the profession. For most of them, media means newspapers and news channels — and usually only in English. Even within this set, for some strange reason, there is an obsession with The Times Group and NDTV.
That there are hundreds of other firms out there — in DTH, TV broadcasting, film production, multiplexes, post-production, mobile VAS among others, operating in all kinds of languages and markets across India — making up a $16-odd billion industry just escapes them.
That is a lot of reflecting. We will be back to analysing the business next time.