NEW DELHI: The biggest bane of media and entertainment industry in India, especially for print and television, has been its disproportionate dependence on advertising, said Uday Shankar, senior vice-president, FICCI, and president, The Walt Disney Company Asia Pacific and Chairman, Star and Disney.
Addressing the 21st edition of FICCI Frames on Tuesday, Shankar said, “As the industry has grown, its dependence on advertising has also grown. Advertising revenue in media in 2000 was just about $1 billion and now it is $10 billion. It has helped the industry to sustain but it has also been a distraction," he said.
The size of Indian media and entertainment industry is about $20-25 billion with over 900 television channels, newspapers, magazines, cinema theaters and multiplexes and a host of digital as well as over-the-top online video streaming platforms.
Shankar emphasized that globally, the media industry has grown, whether its newspapers/magazines, television or other forms of content delivery, because they have built direct-to-consumer relationship where the consumer pays for the product.
“In India, truth be told, all of us are guilty of being short-sighted and subsidizing our products to create hurdles for smaller challengers. We have subsidized our businesses for the buyer and decided to get the money from advertisers which has become a big setback for the industry," he added.
Letting advertisers pay for the product has become a big setback for the media industry which is looking at a bleak year as advertising plummets due to the ongoing pandemic.
Shankar said the only way to grow to the next level is to get people to pay for what they consume. He further highlighted that for a country of a size like India the ambition in the area of content remains extremely small.
“Today, intermediaries have been marginalised and technology has allowed us to go to directly to the consumer. This is not just about television but also newspapers and digital. We haven’t done that and what’s worse is we have been short-sighted enough to partner with regulators and competitors to create hurdles in the way of unlocking the power of the business," he noted.
Citing the example of small countries such as South Korea, Italy and Turkey that have a much bigger media business with their content travelling globally, Shankar urged industry players to invest in quality content and establish supply funnel for high-quality and trained talent in the area of news, entertainment and television content.