Vanita Kohli-Khandekar: The making of media clusters

Mumbai's Oshiwara link road houses at least 100 big and small companies

How do clusters form, thrive and survive? Can they be nurtured to economic advantage? More than 10 years ago when she was just a television producer, I met Ektaa Kapoor at the Balaji Telefilms office. It was in a stinky lane off the Oshiwara link road (call New Link Road) in North Mumbai. Later, there were meetings with Jagjit Singh Kohli (then ETC, now DigiCable) and Kunal Dasgupta, (ex) CEO, Sony, in the same area.

Even to a Mumbaikar like me, who lived just a few minutes away, the whole New Link Road/Oshiwara belt was a somewhat down-in-the-dumps locality (it still is in parts). One wondered why these companies had chosen it. Was it the rent or the availability of space, always an issue in Mumbai? Or, was it the proximity to the Juhu-, Versova-, Bandra-based film industry? This is what fed technicians, writers, equipment, studios and creative people to the TV industry.

By the time I left Mumbai in 2003, there were roughly 25 media and entertainment (M&E) companies of various hues within a 1-km radius of the Balaji office — Tips Industries, Fame Adlabs, Sab TV, Creative Eye, Mukta Arts, among others.

Today, every major firm in the M&E space has an office in that area. There is Eros International, Yashraj Films, Walkwater Media, Prakash Jha Productions, among scores of others, all within walking distance of one another. It now houses at least 100 big and small companies. Either their core business is M&E or they form part of the ecosystem — film-marketing firms and film funds for instance. Incidentally, most of the actors, technicians and staff live in the same area or in surrounding areas of Versova, Lokhandwala, etc.

You can see that what happened to Oshiwara is building up in Sector 16 A, Noida. You name a media company and it has an office or a studio there — Network18, Bag Films, Dish TV, India TV, Mahua, among a dozen others.

There is no reason why media companies should choose Noida. Unlike Mumbai, there is no local film industry that feeds the growth needs of this business. Clearly it is low rents and the availability of large spaces needed for running a news operation from the Capital that prompted many companies to set up shop here. As the ecosystem developed, more came and now it is a media hub by itself.  The story is repeated, on a smaller scale, across Hyderabad, Chennai and Kolkata that stand out as M&E hubs.

Several economists and management gurus — Paul Krugman and Michael Porter for instance — have done reams of work on clusters. Industry clusters are formed when firms in the same or related businesses operate in a small, well-defined area. This creates competitive advantage, says Porter. That is because the firms in the cluster benefit from their proximity to competitors, to a skilled workforce, to specialised suppliers and a shared base of industry knowledge.

Think of it as an ecosystem that sustains on its own. Once it is formed, a cluster becomes a permanent source of competitive advantage, says one economist. It doesn’t matter if Ireland and Israel make cutting-edge software, Silicon Valley remains Silicon Valley and they haven’t yet found a place like Hollywood.

The “so what” question is how to leverage it. In a $17-billion entrepreneur-driven business that employs millions of people, surely some leverage would work at creating both global scale and better profitability. The fragmented Indian M&E business does create both.

A stroll in the back lanes of Oshiwara is difficult if not impossible because of open gutters and pathetic, overcrowded roads. Can these M&E clusters be nurtured instead of testing the limits of their entrepreneurial resourcefulness? What about a little regulatory push — maybe incentivising the building of theatres or post-production, animation or shooting studios?

That is not likely to happen. It took 40 years and umpteen committees for the government to give industry status to films. It may be several more before it recognises the power of clusters, especially in something as peripheral to policy as media and entertainment.

Vanitakohli@hotmail.com