The story of Indian media
Finally there is some data on the economic impact of creative industries
How many people does the Indian film industry employ directly and indirectly? What is the economic value of India’s massive television business?
For the first time in 18 years the FICCI-Frames, the defining event for India’s ~1,473 billion media and entertainment industry, addressed questions like these with specific answers. At the Grand Hyatt in Mumbai last week two of the reports released were significant. The first is the usual FICCI Frames report giving the contours of the business. EY, which did the report instead of old hand KPMG, brings a whiff of fresh air to this much referred to report. Its emphasis on digital was expected — digital ad spending is growing at more than twice the rate for any other medium.
But the surrounding jubilation, especially by the consultants, the private equity (PE) funds and media buying firms, needs to be tempered with hard reality. Digital advertising is growing at 25 per cent (CAGR) or so on a very small base. At ~119 billion it is still about 18 per cent of the TV industry which continues to grow at 10 per cent. More importantly, unlike TV, films or print where companies across the value chain gain from growth, in digital a bulk of the money goes to Google, its sibling YouTube and Facebook. That is exactly how the market works globally. In the US, for instance, this duopoly controls over 70 per cent of digital ad spends. So the Indian media industry would do well to watch where it is headed with this one. That is why the other trend that EY reports, that of the swing towards pay overall is good news. ( Read: Why Indians will pay for online content? Business Standard, February 27, 2018). The more the market goes pay the better the chances of everyone doing well with the growth of digital.
The second report, by Deloitte and the Motion Picture Distributors Association (India) (MPDA) on the economic contribution of film and television industries is something I have wanted to see for years. This column has always argued that the Indian media and entertainment industry does a terrible job of lobbying for its interests or presenting what it actually means to the economy. So it is treated like a ‘dumb blonde’ industry — glamorous but not worth pondering over when it comes to serious things such as rationalising taxes or incentivising the building of broadband and screen infrastructure. The Deloitte-MPDA report addresses that by looking at the employment, economic value added and the multiplier effect an industry segment has.
Take film. It employs 0.24 million people directly and almost three times as many if you include indirect employment. Then there is the multiplier effect that film or television has on other industries such as manufacturing (cameras, hardware et al) to tourism. It offers a fascinating case study on Rajkumar Hirani’s blockbuster 3 Idiots. Some parts of the film were shot in Ladakh including its climax scene at the scenic Pangong lake.
According to the Deloitte-MPDA report from 80,000 in 2009 tourist arrivals into Leh (the entry point to Ladakh) jumped to 180,000 by 2011 and have largely stayed there except for two years when they slipped to around 140,000. The average spend by tourists is estimated at $1,500 per head, which meant that the film generated additional tourism revenues of ~9.56 billion for the state, says the report. The visible impact of 3 Idiots then goes way beyond the ~4.5 billion it generated at the boxoffice globally.
The report, however, will have to be demystified and decoded into simple factoids that can be shared with consumers and with policy makers. These are the kind of messages bodies such as the UK’s Producers Alliance for Cinema and Television have harped on for years before policy changes that could catapult the British creative industry onto the global stage happened.
These are the first steps towards acknowledging that Indian media and entertainment industry can go way beyond the sub-one per cent contribution to GDP. It is going to be a long haul.