Category: Ficci Frames

MUMBAI: Structural development and incentives for digitisation of cable are necessary if the Indian television industry is to mature according to international standards.

Channels also need to reduce their dependence on ad revenues as some of this may migrate to online space in coming years. Greater investment is also needed in content and non linear services.

These were some of the points made during a session on ‘Through The Looking Glass: Has Indian television matured?’ at Ficci Frames.
BBC Worldwide Channels MD Darren Childs, Turner Broadcasting System International President Louise Sams, UTV Global Broadcasting CEO M.K. Anand and Absolutely Independent CEO Patty Genesis spoke at the session moderated by Indiantelevision.com founder, CEO and editor in chief Anil Wanvari.
Childs said many channels had to pay carriage fees due to the analogue structure and so broadcasters were being forced to divert budgets meant for content.
 
In the US, the broadcaster gets around 40 per cent of the subscription revenue while in India it is only 15 per cent. Indian channels have to find a way to reduce their dependence on advertising. In the US, 20 per cent of ad budgets have been diverted towards new media. That could happen in India as well in a few years.

At the same time, TV channels have to develop brands that can travel to non-linear media as well as catch viewers who have migrated. Childs felt that the BBC could have made a bigger push in the previous decade when there was a boom in Indian television. Now it is trying to find the right place for its channels.

Genesis said TV formats have to think beyond the idiot box if they want to make money. Anand said it was easier for niche channels like Discovery and MTV to own non-linear content and build a brand that is bigger than what is being seen on television, and this will help them make better ad revenue as compared to mass channels. 
 
He reiterated what Childs said about ad leakage happening for traditional media. “The key lies in branding media experiences. This will allow channels to move from the TV to the net to the mobile. In the future, the distribution pipe owners will be the movers and shakers. Broadcasters could become a part of distribution companies.” He noted that Indian TV had not matured as very few channels were making money. However, they are more likely to morph than mature, he added.

Channels that are making money include Cartoon Network and Pogo, claimed Sams who said Turner’s largest investment last year was in India. At the same time, she felt foreign media companies needed to have patience, persistence and flexibility to succeed abroad. She was bullish on Imagine TV, recently acquired from NDTV. As far as the Indian TV industry was concerned, she said there was need to keep an eye on technological developments in the West. While online video platforms are growing, there is a question mark over how they can generate revenue. She said this was because the youth were used to getting free content online in India unlike in the US.
 

MUMBAI: Makers of animation, visual effects, gaming and comics (AVGC) today regretted that the central or state governments had done very little to help the industry which could prove to be a major foreign exchange earner for the country.

Speaking at a session on ‘Government Intervention and initiatives for AVGC industry,’ the makers said that the government could give a start by giving greater importance to art and animation in the education system and giving a tax holiday to this industry for at least ten years.

Apart from three persons involved in the making of AVGC, the participants included West Bengal Information Minister Debesh Das who said his government was working to produce a talent pool and resource. For this purpose, the government was planning training centres.

Emphasizing that the Government’s aim was to facilitate and not make money, Dr Das said there were also plans to put AVGC industries in the Special Economic Zones. However, he indicated that few entrepreneurs had come forward to set up industries in this field.

Balkrishna Maddur, who is President of the Association of Bangalore Animation Industry (ABAI), said the state government had responded very positively to suggestions made by ABAI to developing the industry in Karnataka. The state government had even offered land for an AVGC Park, and help to establish a finishing school for graduates in AVGC. In addition, a proposal for setting up post-production facilities in Karnataka had also been accepted.

To get greater inputs, he said a summit of creators of AVGC had been organised on 23 April which will also see the participation of the state government. A demand will be made to put AVGC in SEC and give incubation facility for a PPP model.

Shambhoo Phalke who had earlier worked on a project under which an animation film ‘Legend of Buddha’ was made for Singapore said that it was the Indian government that was sensitive to people, sensitive to culture, and also sensitive to business but had still not taken any tangible step to help the AVGC industry.

Relating his experience about working with Singapore, he said the government of that nation had set up training institutions soon after the completion of the project which had cost $ 6 million in 1995.

He said seven animation television channels were being beamed into India but none of them had local content despite the fact that Indian mythology and culture was full of good stories. He therefore emphasized that content production had to be increased.

Big Animation CEO Ashish Kulkarni said the mindset of the government has to change towards AVGC and stressed the need for more recognised training institutions and a tax holiday for this industry which was still at a nascent stage.
 

MUMBAI: The biggest 40 hits in cinema all over the world of all time have been those with special visual effects or animation and, therefore, this is an industry that has a very bright future.

This was the general consensus during a panel on ‘Visual Effects: A Global Perspective’ at the ongoing FIicci Frames 2010, where participants who were mostly from the United States said they were open to collaboration with Indian entrepreneurs since this country had a vast trained resource. 

Tim McGovern who is Co-chairman of the Visual Effects Society in the US listed some of the top hits of all time including ‘Titanic’ and ‘Avatar’ and said all these were visual effects-driven.

But he admitted that VFX was no use without a good story or good actors, which was why the films by James Cameroon had succeeded.

Noting that VFX techniques had proved that nothing was impossible in this field, he also said some of the films that had succeeded in 2009 had used a mix of technologies including animation and VFX.

Speaking about the Society, he said it was an educational forum with chapters in many countries. He said any country which could put up 50 or more members could open a chapter.

He said the VFX industry was growing and needed a lot of trained people, and so Hollywood was coming to India in search of talent.

Bruno Sargeant who is Film and TV Industry Manager (Media and Entertainment) in Autodesk Inc. said there was a huge market for VFX in India and the country was no longer just an outsourcing model. He said there had been a lot of consolidation in this industry and Indians were investing in US companies and vice versa. He also spoke of increasing convergence of games, films and TV.

Kerner CEO Eric Edmeades said the US was open to working with Indian partners in the field of VFX and animation.

EyeQube Creative Director and CEO Charles Darby who moderated the discussion agreed and said there was a huge market in this field.

MUMBAI: Corporate activity was growing in the entertainment sector in India and this would help in getting finance more easily in the years to come.

Filmmaker Bobby Bedi and some other speakers in a session moderated by KPMG Executive Director (M & E) Jehil Thakkar on ’Legal and Financial Framework to Boost the Entertainment Industry’ at Ficci Frames were unanimous that getting finance today was much easier than before but felt that there was still very little institutional funding for films.

Dina Dattani who is a consultant said the new trend in Hollywood was that it was reaching out to India as people wanted change.

Patricia Mayer who is a leading lawyer in the field of entertainment and media in the United States, said it was interesting that American filmmakers were running out of ideas and taking licences of films from other countries particularly in Europe to remake them in English. What was needed was new stories. Answering a question, she said Indian films that appealed to the diaspora succeeded overseas.

Bedi said the business model has to change if Indian films have to get funds. The main problem was that Indian films tended to recover their money over a large period and most banks including the Industrial Development Bank of India refused to give money for such long periods.

He said in answer to a question that there was no impediment to foreign money coming into India for funding films.

YES Bank Executive Vice President and Country Head for Media and Entertainment Karan Ahluwalia said banks were already introducing new forms of funding, such as a fund of infrastructure. He felt that the Government should support the National Films Development Corporation to help private filmmakers who could not seek help from studios.

Legal Consultant Ashni Parekh said amendments were needed in the Copyright Act to protect the copyright holder. Unfortunately, there was little implementation of this Act.

She said new forms of financial arrangements such as Completion Bonding had come in but were not very practical in a situation where films took so long to make. She regretted that most filmmakers taking finance did not do any documentation primarily because of relationships.
 

MUMBAI: The Indian media and entertainment sector is ripe for mergers and acquisitions as bigger players look to consolidate in the backdrop of an overhang of debt and losses.

Around $1 billion is expected to pour into the sector over the next two years as the appetite for foreign investors grows with India being identified as one of the leading key growth markets.

Turner International, for instance, has pumped up its investments in India, already its largest revenue market in the Asia Pacific region, with the buy of Hindi general entertainment channel NDTV Imagine in late 2009 for a total consideration of $126.5 million.

Says Turner Broadcasting System International president Louise Sams, “India is where we made our largest investment overseas in 2009.”

Outside the broadcasting space, foreign investors are eyeing a piece in the cable TV business as the sector is in the process of digitising across the country. The direct-to-home (DTH) operators, weighed down by heavy losses as they subsidise to ramp up subscribers amid low ARPUs (average revenue per user), are also in search of investors to fund their expansion plans.

Says KPMG India head of media and entertainment Rajesh Jain, “The Indian M&E sector is expected to receive $600-$1 billion by way of mergers and acquisitions over the next two years.”

In 2009, the M&E industry saw 36 deals amounting to $471 million, 31 per cent lower over the earlier year, amid the backdrop of a challenging business environment. The industry witnessed 52 deals amounting to $879 million in 2008.

In 2009, the sector witnessed 10 private equity deals as compared to 18 in 2008 with deal values amounting to $210 million. The segment also witnessed 26 mergers and acquisition deals valued at $261 million as compared to 34 deals in 2008, according to a KPMG study.

TV broadcasting

Amid an advertising slowdown and tight market situation, broadcasters rationalised their existing portfolios by focusing on core competencies and exited from stressed segments.

In 2007-2008 Viacom entered into a joint venture with Network18 to launch Colors, 9X raised capital from a consortium of private equity investors, NBC acquired an equity interest in NDTV Networks and Time Warner backed Miditech to mark their foray into the Hindi general entertainment channel space, expanding the market from three players to six within a short period of time.

Cut to 2009. NBC exited NDTV Networks by selling their stake back to NDTV, reportedly at a discount to entry price. NDTV in turn exited the GEC space by selling to Turner International.

In the near term, the Hindi GEC segment is expected to remain competitive with the leadership position at stake. With over seven players competing for market share, channels are expected to invest substantially in placement fees and content to gain viewership share.

The Zee Group increased its equity interest in Ten Sports from 50 per cent to 95 per cent. “As a result, consolidation between existing broadcasters is expected to continue and only broadcasters with sound financial strength, strong channel bouquets and innovative content are expected to survive,” the KPMG study says.

Distribution Biz

DEN Networks, the cable television distributor, tapped the capital market to raise Rs 3.7 billion. Hathway Cable and Datacom followed with a public issue soon after to raise over Rs 6.6 billion from the capital market.

In a significant development in the DTH industry, Apollo Management, a US – based private equity fund, acquired 11 per cent equity stake in Dish TV for $100 million.

Going forward, KPMG predicts that the sector is likely to witness disruptive change. “Deal activity in 2010 is likely to be driven by acquisition of LCOs by MSOs in order to gain last mile connectivity, consolidation amongst the MSOs and capital raises by MSOs and DTH operators to fund infrastructure augmentation /roll out and customer acquisitions,” KPMG says.

Print

The print industry witnessed a low level of deal activity in 2009. The only major deal was the IPO of DB Corp. The IPO paved way for the partial exit of Cliffrose Investment, the Mauritius-registered affiliate of Warburg Pincus which in May 2006 had originally invested in Writers and Publishers Ltd (WPL), which gave Cliffrose a 7.14 per cent stake.

The magazine sub-segment too witnessed some deal activity with Raghav Bahl promoted Network18 Group entering into a joint venture with Forbes, to launch business magazines in India. In another deal, Heinrich Bauer Verlag KG, a German publishing company, exited their investment in Next Gen Publishing, a niche publications company in India. Heinrich Bauer Verlag KG had inherited this investment from Emap plc which had invested in Next Gen in 2007.

KPMG notes that in the near term, regional print companies are expected to raise capital either through public capital markets or private equity to expand their presence across news distribution media and also launch niche city centric supplements in an effort to ward off the threat from larger print companies.

In addition, with over 398 daily newspapers published in India, consolidation is imminent in the print industry with larger players seeking margin growth and geographic expansion by acquiring smaller regional players. International newspaper majors remain positively inclined towards the Indian print market but deal activity from such players is likely to be limited until the FDI caps are rationalised.

Filmed Entertainment

The film exhibition segment witnessed the first signs of consolidation with Inox Leisure buying out 43.3 per cent equity interest in Fame India from its promoters for approximately $14 million. However, this deal has its own complexities, with ADAG – owned Reliance MediaWorks making a counter offer for Fame.

In another story of consolidation, PVR Cinemas also expressed their interest in acquiring DT Cinemas, the theatre chain owned by the DLF Group, which was later called off on account of a valuation mismatch.

The exhibition business also witnessed private equity interest, with IFCI acquiring a minority equity interest in Satyam Cineplex, a movie theatre chain based in North India.

With economies of scale being a prime value driver in the film exhibition space, this segment is expected to witness further consolidation.

Radio

In the radio segment, Astro increased its equity interest in South Asia FM from 6.98 per cent to 20 per cent. Regulatory changes such as relaxation of FDI limits, granting permission to own multiple frequencies in a city and the permission to air news and current affairs hold the key to the growth of this segment.

In the near future, relaxation of regulatory norms is likely to facilitate consolidation amongst domestic players as well as drive active interest from large international private equity players and global radio majors.

Emerging segments

The emerging segments such as animation, gaming and OOH witnessed limited deal activity in 2009. In the animation segment, Aptech Ltd acquired Maya Entertainment, for $16.4 million.

MUMBAI: Good screenplay and content are what make films click at the box-office and other factors are secondary, according to renowned filmmakers and script writers.

Addressing a session on ‘The Screenplay: The Missing Link’ at the ongoing Ficci Frames 2010, speakers were emphatic that greater attention should be paid to the content and to the script.

In fact, actor Shah Rukh Khan had said at the inaugural session that screenwriting should be treated as a science and not an art, and screenplay writers needed to sharpen their screen writing skills.

It was pointed out that in Hollywood, scriptwriting is a long process which sometimes takes as long as three years and is accompanied by research. As a result, the actual shooting does not take too much time since the screenplay is written with all details and this makes it easier for the director to shoot without hindrance.

But in India, scriptwriting is given very little importance. According to screen writer Kamlesh Pandey, of the several producers he had taken the script of Rang De Basanti, one had asked him after sitting on the script for a month: “Tell me, who is this Basanti?”, to which he had retorted: “Well this film is ‘Sholay’ from the perspective of Basanti.”

“This is the condition of screenwriters here. Let me tell you something. The Film Writers Association is fighting with the producers to pay a minimum of Rs 200,000 to a screenplay writer,” said noted lyricist, poet and screenwriter Javed Akhtar.

“Rather than concentrate on the script, producers are more interested about the stars, the locations and the technical expertise without appreciating that the screenplay is the foundation of a film. Mostly, films crumble at the box-office because their screenplays are weak,” Akhtar added.

Hollywood scriptwriter Steven de Souza agreed: “There in Hollywood we do not lay emphasis on stars but on stories – Avatar being the latest example”.

Responding to an oft-repeated question, Akhtar said “Stories are mostly written keeping in mind the 1200 multiplex screens the country has, despite the fact that these will cater to just 35 per cent of the population of the country, and the other 65 per cent reside in small towns or villages.

“Earlier, writers could not find any subject other than stories for gangster films. Now even that is saturated. Actual stories are happening in interiors but why is it that we do not source our stories from the hinterland?”, asked Akhtar.

De Souza said no one got down to making a film until the screenwriting is complete, whereas in India it is just the opposite.

“While an art director and a film editor sit ahead of the camera when the shoot happens, the scriptwriter is made to stand way behind the camera,”
creenwriter Pandey complained.

Akhtar said, “Screenplay writers should get their right due and respect

as good stories paved the path of success at the box-office”.
 

MUMBAI: Senior editor M J Akbar today said the entire agitation against paid news was misplaced since the media was the greatest beneficiary of doles given out by the government.

Speaking at Ficci Frames 2010 here, he said “the biggest purchaser of news and credibility is the government.

Noting that the so-called control of content by advertisers was the least of concerns before the media, he said mediapersons were recipients of advantages like housing and government advertising in newspaper.

Furthermore, the biggest power in the media was the Board Room in the sense that content was often decided according to the business interests of the media group.

Speaking on ‘Content is king, but who dictates it – advertising, consumer taste or editorial policy’, he said the real problems for newspapers were created by the creators. This was because the biggest asset that present-day journalists and particularly managements in newspapers had was ego-mania and not news. There was very little truth in the maxim that the consumer was king and the news was in keeping with what he wanted to see or read.

He said the editors of newspapers in the fifties or sixties were more like editorial writers and did not interfere in the news – ‘in fact, they hardly ever came into the newsroom. But this changed in the seventies and particularly when the television news came in a large way.

But he said the editor as dictator could not survive for long, but nor could the consumer become dictator. And, therefore, the Board Room took over.

Referring to the advent of new technologies, he said the Internet could not be blamed for the downfall of television or newspaper. Every medium has its advantages or disadvantages. For example, he said a consumer could not carry a TV or personal computer around all the time the way a newspaper could be carried, and so the print media would remain supreme.

The Internet began dominating in the west because the newspapers were denied the democratic right to choose their news, unlike India where the newspaper has always had greater credibility with the reader.

MUMBAI: Independent film producers in the US face a tough road ahead. Fewer banks are lending, financial terms are spun into complex cobwebs, some studios like Paramount Vantage are shutting shop, independent films are made to hunt hard for buyers and the DVD business is in a state of slumber.

“I am confident that there enough people with passion who will make films on important issues. Having said that there is the danger that four years down the line there might be less variety in terms of Hollywood content,” said Hollywood producer Lawrence Bender during his keynote at the Ficci Frames convention here today.

Bender, whose new documentary about the dangers of nuclear proliferation is being released in the US in July, said he made An Inconvenient Turth with Al Gore believing that it would make a difference to the world.
 

MUMBAI: As the global market steadily walks out of the slowdown crisis, the worldwide advertising industry will have to spread across new geographical areas, segment markets and localise to achieve long-term growth.

While addressing the audience at the Ficci Frames 2010 here, WPP Group chief executive Sir Martin Sorrell said, “In a bid to achieve long-term growth, media players have to understand the market capacity of each region and then locate, incentivise and maintain cosumers and people with localised strategies.”
 
The push will also come significantly from web as today, youth are “magnificantly”attracted to this medium – not just in terms of time spent by them on this platform but also because of their desire to work for web-based companies.

“Mobile will also act as a major slimulant gobally to propell this growth. Indian too, with its 425 million users growing at a rate of 25 million a month, will witness a positive growth in its advertising spends,” he adds.

Sorrell further notes that internal communication driven by new-age technology, global union of retailers with manufacturers and the transfer from global co-ordination to glocal (global and local) co-ordination with bring about a massive upswing across the wordwide advertising industry.
 
Meanwhile, for 2010, WPP will focus on the BRIC nations which Martin expects to constitute one-third of the company’s overall business pie in the next 4-5 years.

“Last year, India comprised 27 per cent of WPP’s overall revenue and now, we are expecting a double digit growth from the sub-continent,” he said. 
 
In 2008, WPP posted a revenue of $400 million from India. WPP saw profits fall by 11 per cent to $1 billion in 2009 as the economic downturn bit hard into its business, but India again showed a positive growth.

In january and February, while our business has returned to stability globally, our revenues are 7-8 per cent up in India,” he says.

MUMBAI: Ubiquitous access, simpler production tools, and the falling costs of technology have made sure that the boom of the Internet is here to stay, unlike in 2000 when net 1.0 burst.

Google President (Global sales operations and business development) Nikesh Arora feels that users having laptops or personal computers expect net access through Wi Fi. “This feature has gone from ‘nice to have’ to ‘must have’. Secondly the tools of production have become simple. Earlier you needed a camera to take photos. Today you have camera mobile phones that allow you to work on the fly. Thirdly, the cost of technology is steadily falling.”

Speaking at the Ficci Frames 2010, he said 30 to 50 per cent of content will be digitally distributed five years down the line. The time people spend on the web will grow and result in ad spends shifting towards the online medium. At the same time, the net has changed the mode of distribution.
 
There are differences in terms of how the net facilitates content delivery. “In India, the net will be pushed by the mobile. The advantage for us at Google is that it allows us to take Indian content like the IPL to a global audience,” he added.
The Internet is also affecting consumer behaviour and consumers want information immediately. Figures show 150 billion emails are sent everyday.  
 
But there are challenges like maintaining users’ privacy and respecting copyright, he said.