Exceeding the USD 100 billion ambition in the shortest possible time
K Madhavan, Chairman, CII National Committee on Media & Entertainment and Country Manager & President, Disney Star at CII Big Picture Summit 2022 held in the Capital recently.
“As an industry we need to constantly keep pace with the changing environment and be ready to address the challenges and size the opportunities that our sector offers.
The harsh reality is that the Indian media and entertainment sector remains underpenetrated. The M&E sector accounts for less than 0.9 percent of the GDP compared to 3-4 percent for many of the developed countries. As also subscription and ad revenues. For most of the developed countries, subscription constitutes 70 percent of the revenue of the media sector, whereas the Indian broadcasting industry remains heavily dependent on advertisement revenue.
Broadcasting industry remains a powerful medium to educate, inspire and empower viewers. The government and the industry need to join together and provide television access to the 100 million households still do not own a TV set. With low data prices, huge wireless broadband, and smartphone penetration, streaming is expected to witness double-digit growth. The rollout of 5G services will provide the requisite impetus. For continued innovation and investment in this business, all that we need is light-touch regulation.
Despite a huge talent force available in the country, another sector that we are far behind, with a less than one percent share in the USD 800 billion global market is the Animation, Visual Effects, Gaming and Comics (AVGC) segment. This can be another IT-like sector, with the potential to create 1,60,000 jobs immediately. A 5 percent of the global market translates to USD 40 billion.
Globally, gaming is a USD 240 billion industry, with India again at a less than one percent share. Bringing regulatory clarity at a national level and defining the difference between gaming and gambling may resolve this issue that some states have of disallowing genuine gaming operations and opportunities.
Sports in India is now at the national level. Our overall ad revenue at less than USD 1 billion has the potential to reach USD 5 billion. We have recently seen billions of dollars being infused into the sports segment. The policymakers and regulators need to provide a robust environment for continuous investment that can transform India into a sporting nation. The regulators could lead the price discovery for distribution to market mechanism. And globally, the entire sports broadcasting sector survives on subscription revenue. Unfortunately, we have a different setup and are struggling in this market.
I see a big opportunity to take our content to global audiences. South Korea is a great example of demonstrating repeatedly that good content travels beyond boundaries and beyond languages. Despite having a strong ecosystem of talent, production efficiencies, and creative capabilities, we have not been able to walk the global stage. We need to put all out efforts to create a travelable content and become a storyteller to the world.
Newsprint, music, and radio continue to be important contributors and are undergoing massive changes. These sectors need to understand the changing consumer habits and reinvent themselves with a digital approach. With the right support from policymakers and regulators, and with the opportunities ahead, our industry can exceed its USD 100 billion ambition in the shortest possible time.
We continue to engage with the government and the regulator. And I want to take this opportunity to thank them for the support extended to the industry. In this challenging environment, timely support from the policymakers and regulators is utmost important.
Some issues remain. The rampant piracy is a serious issue that our industry suffers. Intellectual property is core to our business and we need stricter and more supportive IP protection and IT policy measures. Television broadcasting has been severely impacted pending a resolution on NTO. A quick resolution is important for consumers, broadcasters as well as the distributors. Ideally we should adopt a principle of forbearance, in line with practices in most of the developed markets. The industry would like to see a light touch regulation, that will encourage especially the newer and growing areas of OTT and also bring innovation and investment into the sector.
I am confident that we all will make the mission of entertainment for every household, every intent a reality and take our industry to great heights.”