Mumbai: Technological disruption is set to restructure the Indian media and entertainment industry, which could be the next big destination for venture capitalists and angel investors, according to participants in a panel discussion on Thursday at Ficci Frames, an annual conference on the industry.
Professional investors have so far stayed away from entertainment industry, deterred by high production and distribution costs and a low movie success rate, but that is set to change.
After the boom in investments in the healthcare, education, and pharma sectors, the media and entertainment sector will witness the next wave of funds, panellists said.
“The cost to distribute and make movies will come down," said Saurabh Srivastava, co-founder and past chairman of software services industry lobby group Nasscom and co-founder of the Indian Angel Network, which consists of over 350 investors, with investments spread across 10 countries.
That will provide a more amenable risk and investment structure for venture capitalists, he said.
Sanjay Nath, co-founder and managing director, Blume Ventures, which leads seed stage funding, and is also a small investor in one of the largest ad tech companies, InMobi, said the road to funding will become easier for the industry, particularly to content creators.
India’s start-up ecosystem is experiencing robust growth, with healthcare, education, and pharma sectors being the main beneficiaries of investor interest.
According to Padmaja Ruparel, chief executive officer, Indian Angel Network, the kind of values that have been unlocked in sectors like health care and pharma, which were also high-risk investments, will now be seen in the media and entertainment sector.
“In fact, given the dynamic nature of this sector, the change will be faster," she added.
Over the last year, the network has invested in over 29 companies. On an average, the network sees about 4,000 start-ups approach it each year.
The group of panellists added that factors like risk-rewards, credibility, having in place the right mix of business and innovation, and the ability to reach larger masses, are some of the key factors that investors look out for when investing in companies.