On the first day of their annual convention, Ficci-Frames 2007, media and entertainment companies called for less government regulation, greater transparency and better-defined brands.
The day’s opening session had Amit Khanna, chairman of Reliance Entertainment Ltd, ask Priya Ranjan Dasmunsi, Union minister for information and broadcasting, to change his ministry’s approach. “We need a progressive approach,” Khanna said. “Let’s not go through moral policing. It’s not in the national interest to watch a cricket match.”
Khanna was supported in his request by Kunal Dasgupta, chief executive officer of Sony Entertainment Television, whose entertainment channel, AXN, was banned for two months by Dasmunsi’s ministry for broadcasting material deemed offensive. Dasgupta discussed the various regulatory hurdles he had faced in his 13-year television career, describing how, at times, the laws had thwarted companies from doing business.
“You could start your business, beam it into India, have people pick it up, but you couldn’t broadcast advertising from Indian companies. But then, bright guys found a loophole in the Reserve Bank of India’s exporters’ guidebook. In some ways, the government was outfoxed there,” Dasgupta said to laughter.
“Regulation should be oriented to create business,” said Shardul S. Shroff, managing partner, Amarchand Mangaldas, during a panel discussion on regulation in media and entertainment. “It should be light-handed, it should be live to changes, it should be more in the nature of codes or guidelines that are susceptible to quick change. This is the ideal model that the Securities & Exchange Board of India has followed.”
The day played to packed auditoriums at The Renaissance hotel at Powai, in Mumbai, with delegates from more than 15 countries participating in discussions and seminars related to the business of entertainment.
During a panel discussion on finance in the entertainment industry, bankers and financiers said that India’s media and entertainment industry was taking off, and that investors wanted a piece of the returns. Yet, the expansion was nascent. To reach the next level, the industry would have to provide investors with more transparency, they said.
“In 2001, what investors bought was a dream,” said Ashok Wadhwa, CEO, Ambit Corporate Finance Pvt. Ltd. “Today, what investors want to see is a track record.” He said that the avenues for media and entertainment companies to gain funding would only become more common and that more film funds would be announced. But he said the onus would be on the management to gain investor confidence, particularly in view of the losses venture capitalists have suffered in the past.
Media experts also reckoned that if the industry was to survive and attract investors, it would have to build stronger brands. “At a time when consumers are extremely fickle, it is critical for media companies to create strong brands,“ said Neetu Bhatia, director (communications and tech group), Bank of Montreal in the US.
Brand value could be enhanced with greater transparency, said Karan Ahluwalia, vice-president (business development and corporate affairs), Yes Bank. “Investors demand transparency. Financial prudence as a media house or company will just add to brand value,” he added.
Digital cinema and piracy were two other topics discussed during the day. Media professionals believe that the advent of digital cinema has helped curb piracy, but its costs are a concern. Shravan Shroff, managing director of Shringar Cinemas, said he saw more people willing to pay extra for digitally displayed movies. He also said more movies would be offered in a digital format as theatre owners were assured of getting a return on their investments. The speakers, who represented India and the US, said the most critical reasons for moving towards digital films in India were the prevention of piracy and lower distribution costs.
Ficci and the Financial Investment Agency of the Region of Lazio signed a memorandum of understanding, which will attempt to promote opportunities for trade and co-production.
Dasmunsi disclosed that the Cannes film festival, as part of its 60th anniversary, planned to dedicate two days of its week-long festival to India, which is also in its 60th year.
Rana Rosen and Rahul Bhatia contributed to this story.