Four themes more or less dominated an interesting panel discussion on media and entertainment at the India Economic Summit of the World Economic Forum yesterday.
1) India is underadvertised. The country’s ad spends to GDP ratio is 0.55, while the global average is 0.86 and in the US, it’s 1.18 (Source: FICCI-KPMG media report 2009). WPP Group’s country manager Ranjan Kapur attributed such low ad spends to the domination of the services sector in India’s GDP. “About 53% of the GDP is now from the services sector, which is notorious for not needing advertising,” Kapur said, adding, “the good news is that manufacturing is growing”.
2) The biggest challenge before the industry is to monetize the content it produces. In television, only a small fraction of pay TV revenues come back to content creators and broadcasters due to underdeclaration by cable operators and other leakages. “There are inequities in splitting these revenues,” Kapur said. Star India CEO Uday Shankar emphasised the point that we can see better content on television only if there can be a better way of monetizing it. Shankar also said that in India the TV and print revolutions are still ahead of us.
Pearson (NYSE: PSO) Plc’s deputy chairman in India, Khozem Merchant, spoke about the success his firm has had in monetizing its content on FT.com, Financial Times‘ online edition. “In the age of Twitter and crowdsourcing, people want a credible, authoritative news source,” he said. “Invest in quality content, make it exclusive” was his prescription for monetizing content online.
3) Business Standard editor Sanjaya Baru argued that media in India has gone through a quantitative growth but the qualitative growth is yet to happen. He said he expects a phase of consolidation now and argued that this must be allowed to happen “before we are allowed to be swept off our feet” by deep-pocketed foreign companies that now see India as a lucrative media market. Baru said he was not a protectionist but that made little difference to other panelists who thought a consolidation need not be a “nationalist consolidation”.
4) Fossil media Vs new media: The media industry in India is “at a special spot today that will not last forever,” said Dave Senay, CEO of Fleishman-Hillard Inc. Due to its demographic underpinnings, “the traditional media bubble will continue for sometime,” Senay said. Digital allows companies to market down to a unit of one. India should use this time “to learn from the mistakes of others to prepare the digital platforms of the future,” he said.
When panel chair and The Indian Express editor-in-chief, Shekhar Gupta asked Business Standard‘s Sanjaya Baru is they could be called fossil media, the latter protested. “Print is not fossil in India. It is going to grow. I’m an optimist for print,” Baru said.