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M&E sector needs liberal ecosystem to grow
MUMBAI: Although digitisation has been a big growth driver for the media and entertainment companies, the government needs to liberalise the regulatory framework to allow the sector to realise its full potential.
This was the consensus among the panellists at the discussion titled ‘Do the lions still roar: a reality check for media & entertainment industry and its contribution’ on the first day of the M&E conclave FICCI Frames 2017.
Viacom18 CEO Hindi mass entertainment Raj Nayak began on a philosophical note stating that ‘content is the new water’ that can travel through different pipes. The number of pipes for delivery of content has multiplied over the years.
“Digitisation has allowed people to watch content at their convenience. There are 180 million TV homes in the country and there is headroom for further growth with another 70–80 million homes,” Nayak stated.
Talking about the digital medium, Nayak said that 85% of digital ad dollars are taken away by the big daddies of digital world, Google and Facebook. The rest of the digital platforms are fighting for the remaining 15% ad dollars.
“While the growth rate maybe 30–35%, it is so fragmented that everyone is losing money,” he noted.
While in India content is increasingly consumed on small devices, the international experience suggests that TV is the preferred medium to consume content. He cited the example of Netflix, which is consumed through TV. According to Nayak, as people become prosperous, they want to consume quality content on bigger screens.
“For content creators, it is a diamond era. When it comes to monetisation, because there is so much fragmentation I doubt how most of these platforms will survive unless they have a subscription revenue model. Without that, a lot of platforms will find it difficult to survive,” he stated.
Tata Sky MD and CEO Harit Nagpal rued the fact that there was no level playing in the broadcasting distribution sector with direct-to-home (DTH) companies paying more taxes than cable TV networks.
Nagpal said that DTH operators hold 33% of the market in Phases I and II of the digital addressable system (DAS) market. However, they pay 80–90% of entertainment and service tax. Cable TV, which holds 2/3rd of the market, hardly pays 20% of the entertainment and service tax.
“Do they [cable operators] have the infrastructure where the customer can call the cable operator and drop or add on pack he doesn’t want? It doesn’t. The job of the regulator and the government is to create a level playing field and transparency so that money flows to rightful owners including the government,” he averred.
Nagpal also advised the government not to waste its time on pricing content. “This is a hyper competitive market; there is no need for price regulation with a level playing field,” he said.
BAG Network CMD Anuradha Prasad said that the broadcasting sector needed a dedicated regulator as TRAI is preoccupied with the telecom sector. She also said that broadcasters were not able to spend on content as there is no mechanism for a revenue flowback.
Prasad regretted that the government was not allowing news on private FM radio despite social media, where all kinds of news gets circulated, being totally unregulated. She also said that people did not want to consumer AIR news on private FM radio.
MIB secretary Ajay Mittal said that the ministry was considering allowing news on private stations, but that there were issued related to security and the matter was sub judice in the Supreme Court.
Mittal also said that ministry had initiated discussions with the Department of Industrial Promotion and Policy (DIPP) to set up a Copyright Board that would oversee strict implementation of IP laws for the entertainment industry, particularly the film sector.
He said that the board might come any day and once it came into being, the dispute between content generators and various kind of distribution platforms would get addressed.
On the issue of threats of violence to film makers, Mittal said that creativity is the soul of society and should not be fettered. “Our Constitution articulates protection very well”, he emphasized while reminding the audience that this freedom is not absolute and that the Constitution speaks of reasonable restrictions.
On the issue of censorship, Nayak said that the government should clarify whether the Censor Board was a certification board or a censor board. He also said that, while as a country we were progressing, as a society we were regressing.
UFO Movies joint MD Kapil Agarwal said that analogue cinema screens had been digitised due to less regulation and the participation of private players.
“Digitisation of screens started as it was not regulated. Private industry digitised by investing heavily. From 2005 to 13, 100% of the country was digitised. Through these same 9000 screens, we have seen the collections of movies go up significantly,” he said.
“As a country, we need at least 20,000 movie screens. While there is willingness to put in capital to set up new multiplexes, over-regulation in the form of multiple clearances is a dampener. The screen density is growing slowly. If the government moves from regulation to facilitation, growth will happen.”
Department of Commerce joint secretary Sudhanshu Pandey said that the service sector had largely been unorganised and it had found its way to grow. A level playing field was very important for the growth of any sector, he added.
“Regulators are there for some sectors while some sectors have no regulations. Somebody has to take that role so that unfair trade practices are removed and a level playing field is promoted. Transparency and a level playing field will throw open opportunities for sectors. Money will flow into the sector and IPR can be monetised,” he noted.
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