Control one billion Indians for $250-mn

NEW DELHI: The industry needed rationalisation of taxes as well as a framework that allowed film producers access to affordable venture capital, said NK Singh, chairman, Indian Institute for Management and Development.

“There is a convergence law, but no convergence because of an opaque regulatory framework,” said Singh. He added, “The industry needed to build up its infrastructure to become an outsourcing hub, for which the government should take proactive steps,” he said.

Singh was addressing a session on “Media and Entertainment: Opening the Window to the World”, at the India Economic Summit jointly organised by the World Economic Forum and Confederation of Indian Industry.

The media and entertainment industry needs a quick release for FDI, a more rational tax structure, and more openness, said Sir Martin Sorrell, group chief executive, WPP, UK and co-chair of the Summit.

He added that laws governing Intellectual Property Rights (IPR) needed to be strengthened in India to promote the industry. He said simplifying the tax structure and developing talent through adequate training would also speed up growth of the industry.

Further, Sir Sorrell said the government should reduce its role in brand building by restricting the Directorate of Audio-Visual Publicity (DAVP) from handling the advertising accounts of public sector firms and banks.

Michelle Guthrie, chief executive officer, Star Group, Hong Kong SAR and Young Global Leader, opined, “there should be a consistency of taxation rules.”

She said there was a lack of awareness in the government about the wealth-creation potential of the industry. The proliferation of content, said Guthrie, had made newer distribution channels such as the Internet valuable, though satellites still remained the most cost-effective way for broadcasting TV.

The Indian media and entertainment industry, felt Arlene McCarthy, Member of the European Parliament, Brussels, needs to be managed more professionally with better governance.

She said this, along with better handling of piracy and IPR issues, would encourage FDI, joint ventures and co-production. She said vocational training, not college courses, would help to create a pool of suitable manpower for the industry. “The government should accord this dynamic sector higher priority through suitable reforms to attract investments and realise its potential for growth,” McCarthy said. She underlined the point that the industry could attract FDI only if it demonstrated its ability and willingness to safeguard IPR.

Geetanjali Kirloskar, chairman, Kirloskar's India-Japan Initiative, said the film industry had to run itself more professionally to attract investment. She said for improving the quality of content, the Indian media should partner with foreign organisations. Kirloskar reiterated that professional management and better financial systems would increase transparency in the industry and enable it to get FDI.

She also said that the advertising accounts of governments should be opened up to the private sector instead of going to government agencies.

Kirloskar called upon CII to take the lead in streamlining the regulatory framework for the media and entertainment industry.

A startling point, said Vikram Chandra, CEO, NDTV Convergence, is that the total market capitalisation of the listed TV companies in India is about $500 million, which means that for $250 million, you can control the thinking of a billion Indians.

He said the proliferation of news channels has made them chase higher TRP ratings. In turn, this “has lead to a race for the lowest common denominator”.

However, Chandra believes there is continued scope in TV for getting high TRPs with quality programming.