Media's post-liberalisation report card

Thirty-five years on, India's media & entertainment industry still accounts for less than one per cent of GDP

Thirty-five years ago, we used to wait for the Sunday evening Hindi film on Doordarshan. Saturday evenings were for the Marathi film in Mumbai, where this reporter is from. Thursdays were for Chayageet. Then there was Karamchand or Idhar Udhar, among other shows. Movies on the big screen were a special treat that grown-ups took you for.

 

Our mornings were about The Times of India. And every two weeks India Today and Star & Style would be dropped off by the local newspaper guy. The brands and languages may differ but that was the extent of media consumption in middle-class homes in India then. Telephones or landlines were difficult to get. There was no internet, social media, streaming or private television channels. That changed in January 1991, with CNN and the Gulf War it was beaming into Indian homes.

 

In July 1991, India’s economy was liberalised. And in August 1991, STAR TV, or Satellite Television Asian Region, launched with Star Plus, Prime Sports, BBC News and MTV — all in English. The opening up of the economy, and by association the media, had begun.

 

India now has over 900 TV channels, thousands of newspapers, and over 860 radio channels. We make more than 1,600 films in a year. Out of a total of 9,000 screens, 4,000 are in multiplexes. It has been over a decade since streaming took off and six years since short videos did. There are more than 60 video apps and a dozen music ones. This abundance of media options over 35 years belies the business’s complete lack of scale. It does not do justice to 1.4 billion entertainment-crazy people. 

 

The numbers on the size of the media & entertainment (M&E) business in 1991 are hazy. Rough estimates suggest it stood at about ₹2,000 crore. That was 0.3 per cent of the gross domestic product or GDP then. At the turn of the millennium, it bought in less than 0.2 per cent, albeit on an expanding base. The burgeoning information technology or IT sector, fresh from the Y2K boom, brought in 1.2 per cent. The hope was media would be to the Indian economy what IT was becoming.

 

That hasn’t happened. Last year, IT accounted for 7.3 per cent of India’s GDP, against 0.8 per cent from M&E. The figure is 7 per cent for the US and 4.6 per cent for China. These are way larger economies, so the actual numbers are huge. The Chinese M&E business is almost three times that of India.

 

At $32 billion in revenues, the Indian M&E business is abysmally small. It is about a third the size of the Walt Disney Company or roughly equal to that of  Tata Consultancy Services. Given the numbers, almost 700 million smartphone users, 650 million television viewers, and 421 million newspaper readers — the size of the firms in any of these segments doesn’t even scale up to Indian standards, let alone global ones.

 

There are only two large media firms with any scale — JioStar and Google India — both at roughly $4 billion in top line. For a country that loves to chat and debate, there is no news brand that has found traction elsewhere. Ninety per cent of all that is watched in theatres, on TV or streaming is Indian stories. Yet there is no global entertainment firm of any heft from India.

 

There are two identifiable reasons for why we haven’t yet achieved our potential. One, is ad-hoc regulation. The decisions to give cinema industry status (2000) got rid of dodgy capital. That, along with a tax holiday to multiplexes, helped the business grow by 300 per cent over a decade. These were wonderful. By contrast, the decision to control prices of TV channels (2004) ensured that the largest medium in India remained stunted — creatively and commercially. We simply don’t have a big-picture fix on policy and how to engineer it to foster growth domestically and globally.

 

Two is Indian firms themselves. Early on, the IT industry formed Nasscom to speak for the sector with regulators, consumers and other stakeholders. There is no such single body for M&E — North versus South, foreign versus Indian, Hindi versus non-Hindi — the divisions that drive broadcasters, publishers or streamers are evident in most lobbying efforts.

 

The fact is, every new theatre, television channel or website provides jobs, generates taxes and has a cascading effect on tourism, hotels and airlines. There is, however, no comprehensive look at how the 12 million jobs that this industry generates could be augmented by, say, treating the opening of screens as infrastructure. A much younger live concerts business calculated and publicised the economic impact of the Coldplay concerts in Mumbai and Ahmedabad, down to the last crore.

 

Without these two things in place, we can bid goodbye to any chance of being a global power in the creative industries. All the backend work  — in special effects or otherwise — will not do that. That needs building muscle and size in the home market first. For example — there is talk about Indian cinema’s soft power globally. But our presence in the global market is a blip compared with, say, Hollywood or Korea. The Indian movie business has been stuck at $1.5-$2 billion in domestic revenues for years. Indian studios simply do not have the money or distribution heft to attempt full-fledged global releases. It is only when the domestic market hits $10 billion or more will you have Indian studios that can have the strength and appetite to go global. Similarly, it is only when the entire M&E business hits, say, $100 billion or more in revenues and reaches at least a billion consumers that it will be truly representative of India.

 

@vanitakohlik