Investments in media & entertainment dry up
The deal flow in the ~115,700-crore Indian media and entertainment (M&E) business has more or less dried up this year. That is what numbers crunched by News Corporation-owned VCCEdge reveal. (See charts)
A total of $78.8 million (about ~530 crore at the dollar rate on Tuesday) was raised by the entire $18-billion industry till June 20 this year. While it could end the year with better numbers, it doesn’t seem it could reach the billion odd it raised last year or the almost $400 mn it raised in 2014. Note also that much of this money came through private equity investments.
When India liberalised in 1991 and private television took off, the hope was that media would be to the economy what Information Technology or IT has become — a creators of jobs, contributor to the gross domestic product and a symbol of India’s creative talent. But if you look at capital raised or even industry sizes, M&E has disappointed. Except for a few listed newspaper firms that gave returns, there hasn’t been much joy for media investors. Even they face questions over growth and metrics now going by analyst reports. Sure, there are large profitable firms, such as the Times Group or Star India, but they are privately held and rarely look outside for capital. There are many reasons for the under-monetisation and therefore poor returns endemic to the world’s second largest TV market or its largest producer of films. Hyper-competition, cock-eyed regulation and flawed industry structures are the main ones.
The only areas where some investment is coming in, are pay revenue-dominated digital segments or ones where digitisation is the reason for raising capital. For example direct-to-home (Videocon d2h), cable (Den), multiplexes (PVR) or pure digital media forays such as Balaji’s ALT Digital or Saavn.