Finding Indian media's Ted Lassos: M&E needs bold policy, capital

Ted Lasso is relentlessly positive. In the eponymous show on Apple TV, the American soccer coach, who knows nothing about English football, is hired to train AFC Richmond, a team in London. In the mayhem and fun that follow over three seasons, his positivity — his belief that people are intrinsically good and that they deserve second chances, combined with hard work — brings Richmond up from the dumps to second position in the Premier League. That is what the Indian media and entertainment (M&E) business needs — relentlessly positive champions who believe. Read that as a large cluster of investors and policymakers — but more on that later.

 

The World Audio-Visual and Entertainment Summit, or WAVES 2025, held in Mumbai earlier this month, cast a very welcome spotlight on India’s creative industries. But the job of building the blocks needed to unleash the potential of this business remains.

 

The growth in M&E slowed to 3.3 per cent in 2024 from 8.3 per cent in the previous year, thanks to a drop in revenue for TV, animation and visual effects. The ₹2.5 trillion sector is expected to grow at over 7 per cent annually until 2027, reaching over ₹3 trillion, says the latest FICCI-Frames report put together by EY. 

 

Those numbers seem sad when you consider that India is the world’s largest producer of films, its second-largest TV market, and among the top consumers of video. We have over 1.4 billion people. Of these 900 million watch TV, and 524 million are online. Think about it — the entire Indian M&E sector is about a fifth of the revenue size of, say, Comcast or about a third of The Walt Disney Company. You could argue, rightly, that India is a smaller economy with lower per capita income. But this talk of potential has been around for most of the two decades that I have been covering this business.

 

At the turn of the millennium, M&E brought in less than 0.2 per cent of India’s gross domestic product (GDP), compared to the 1.2 per cent from the then-burgeoning information technology (IT) sector. The hope was media would become to the Indian economy what IT was becoming. Last year, IT brought 7 per cent of India’s GDP, against 0.73 per cent from M&E. The figure is 1.2 per cent for the US, and just under one per cent for China. These are way larger economies, so the actual numbers are huge — for instance, the Chinese media business is six times that of India.

 

There are two things needed to scale up the Indian M&E in the domestic and global markets — positive policymaking and capital. Remember, just one decision— to grant industry status to cinema in 2000 — got rid of dodgy capital and grew the business 300 per cent over a decade. And just one decision to control prices in television has ensured that the largest medium in India remained stunted — creatively and commercially. Therefore, “good” policy — one that understands the structure of the business and calculates the cost of making a change or not making it — is critical.

 

That attracts the second thing — capital. There has been investment in media-tech startups like Frammer AI (video editing), Neural Garage (smart dubbing), and in development centres by Microsoft, Google and Amazon, all great for generating jobs. But if the business has to explode, then investment into content and into screens — across theatrical, smart phones or smart TVs — is critical.

 

Take theatres, which bring in two-thirds of the revenue for films. “The biggest hits have a footfall of about 35 million people; that is just 2 per cent of our population. Where is the remaining 98 per cent watching our films? For a vast number of Indians, there is no local cinema to go to,” said actor/producer Aamir Khan at WAVES. For all the movies it makes, India has just six screens for every million people compared to 125 in the US, or 30 in China. There is some serious disruption waiting to happen in low-ticket priced screens across the country. Ditto for smartphones — the hub of the highest-growing segment of the media business. For most Indians — especially at the middle and lower end — a smartphone is the first port of entry into the internet. But high prices have led to a stagnation in sales and, therefore, the reach of digital. For now, revenue continues to rise on the back of rising usage by existing audiences.

 

One of India’s biggest strengths is telling stories. It is the only country, along with South Korea, where local entertainment rules the small and big screen — without any protection or import quotas on foreign films. Except for the ₹1,000 crore from Adar Poonawalla into Karan Johar’s Dharma Productions, and the ₹90 crore that Baweja Studios raised through an initial public offering last year, there has been no action in the content space.

 

Till there is unencumbered capital that can invest in different screens and different forms of content to reach all Indians, not just the 524 million online, India’s potential in M&E will remain like the unicorn — a mythical beast.

 

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