To do or not to do

After three months of being battered by a slowing economy and the pandemic, Indian media firms are reacting with frenzied activity

BookMyShow begins streaming live events this week. In normal times, it sells 200 million tickets to movies, plays and other events every year. Since those aren’t happening, it is not making the money it does from its commission on ticket prices. BookMyShowOnline is a way to generate pay and ad revenues by streaming plays, concerts or even workshops.

Laxmmi Bomb starring Akshay Kumar among seven films will drop on Disney+Hotstar on July 24, skipping a theatrical release. Hotstar has lost audiences significantly over the lockdown period, largely because the Indian Premier League did not take place depriving Disney Star, which owns the rights, of audience and revenues. This move then is, arguably, an attempt to make good.

Those are just two of the dozen-odd announcements in my inbox over the last two weeks.
 

In a world gone topsy-turvy since the Covid pandemic hit us, firms in the Rs 1,82,200 crore Indian media and entertainment (M&E) business are doing different things to stay afloat, survive and eventually grow. That is what brought Bob (Robert) Iger to mind.

The Disney CEO, who’d stepped back in February this year, has been called in to steer the $70 billion firm through the Covid crisis. Most of Disney’s businesses — consumer products, theme parks, cruises, films — are consumer facing. The pandemic hit them hard. Its first quarter profits will be down by an estimated $1.4 billion.

Iger, a Disney veteran, had taken over as CEO in 2005 when Disney was $38 billion and the internet had just started to hit television, music and newspapers. The AOL-Time Warner merger in 2000, valued at a stunning $350 billion, didn’t work. But it shook up the entertainment industry. Iger knew that content and IP (intellectual property) in characters were the engines that fuelled growth and profitability in everything else — TV, consumer products, theme parks etc. And in the digital era Disney needed more than just Mickey Mouse and family. He went about acquiring Pixar (Toy Story, Cars) Marvel (Avengers) and Rupert Murdoch’s Fox among other businesses.

The story of how he dealt with the brilliant but difficult Steve Jobs (Pixar) or secretive Isaac (Ike) Perlmutter of Marvel is detailed in his 2019 book The Ride of a Lifetime. While the impact of the Fox acquisition in 2019 is yet to unravel, all his other acquisitions have done wonders for Disney’s top and bottom lines.

Iger’s take on acquisitions or dealing with crises is simple -- openness, transparency, clarity and a respect for people. He needed Pixar not just for its films but also its people like John Lasseter and Edwin Catmull who later transformed Disney animation. Iger often repeats that it is better to accept change and use it to grow your business than resist it -- Disney+ was born under his command.

The effects of the lockdown, a tottering economy and the stubborn refusal of ad revenues to pick up is leading to a sort of endgame here in India. The an­n­ouncements of channels and newspaper editions shutting down, single screens in trouble are coming in fast and fu­rious. There will be mergers and acquisitions as assets go cheap. Many small OTTs will be selling to bigger broadcasters. Going by the buzz, there is at least one multiplex chain up for sale.

In this melee it is important to remember the big lessons that Iger’s book emphasises — go after whatever it is that grows your core business. My guess is not many firms are doing that. Releasing films on the small screen to plug programming gaps or trigger a spurt in viewership is an old tactic. In this instance what it means for Fox Star Studios (Disney’s film arm) is not clear. As BookMyShow starts streaming concerts, will it create a conflict of interest with live event firms that it sells tickets for?

Note these are not value judgements; there is no good or bad decision here. The panic and frenzy of financially precarious newspapers and single screens is understandable. But Disney Star is among India’s three largest media firms; BookMyShow is phenomenally well-funded. Those factors apply to many of the top 10 media firms — Sony, Times Group, Tata Sky, PVR Cinemas. Some of their businesses — TV distribution, newspapers, radio — are more threatened than others. How to wield the axe and yet ensure that the tree continues to grow will require all the ingenuity Indian managers are famous for.

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