M&E is the force multiplier at the heart of the society: Sudhanshu Vats

Delivering the keynote address at FICCI Frames 2018, Sudhanshu Vats, Group CEO, Viacom18, highlighted how the media & entertainment (M&E) industry in India as a force multiplier at the heart of the society. While stating that “we are in the business of story-telling”, Vats narrated a story from the Panchatantra where a colony of rats helped the mighty elephants to escape a terrible fate to stress on why the industry needs to rethink its obsession with size. 

“As industry leaders, we take pride in setting huge billion-dollar milestones that we hope will make others ‘respect and admire’ us more. We hope that the government will take notice of us – we hope that our boards and promoters will reward us – we hope that leading talent will work with us and so on. But if you step back and think about the linkages our sector has with other sectors – the role it plays as a force-multiplier – the sway we have over our audiences – every Indian around the world – and others with a shared culture – we suddenly realise that we are far more important than a number or a target.” 

Data revolution has caused a great stir in the industry 

Vats pointed how we have heard about the products that we consume today through some form of media, be it print, or digital or electronic. 

Deconstructing it in terms of numbers, Vats noted, “Our industry has added over Rs 50,000 crore in output in the last five years and has a revenue size of Rs 130-135K crore. Indirect and induced benefits to the economy of the total industry size is ~Rs 450K crore, with a contribution of 2.8 per cent to the GDP. The industry also employs, across both formal and informal sectors 1-1.2 million people, contributing significantly to India’s job creation.” 

Continuing further, he said that video streaming accounts for over 50 per cent of total mobile internet usage in India, which is expected to touch 75 per cent over the next 3 years. Today, the contribution of data to telco revenue stands at 20-25 per cent. “Imagine what will happen when VR becomes a commonplace phenomenon?” he asked. 

This has given way to various other industries, tourism being one of them, Vats noted. “Tourism has become a $150 million industry and a significant employer for the country and is rapidly growing while having strong linkages with media and entertainment,” he added. Here he cited the example of ‘Padmaavat’ (a movie produced by Viacom18 Motion Pictures) – how the movie has revived interest around Khilji’s tomb in the Qutub Complex in Delhi as well as the age-old Rajwada dresses. 

There are other sectors – the satellite industry, Set Top Boxes and other equipment – including telecom handsets, events, food and retail – that the M&E industry drives.  

Futuristically speaking, screens will be the power in the future. From fashion and costumes to jewellery, etc. – screens will garner more interest and will bring in stimulus for the e-commerce industry in India. 

Vats added, “While I stated earlier that the direct revenue generated by the media and entertainment industry is ~Rs 130-135K crore, when considering the total economic impact, including direct, indirect and induced benefits, our contribution is almost 3.5 times that, today. Imagine our multiplier effect when India becomes a $5 trillion economy in the next 8-9 years?” 

But the Big Question – The Scope of Growth? 

While there is incredible and tremendous room for growth in every sub-segment of the M&E industry, media – both traditional and digital – will have a wider role to play and will have to strengthen its role in the society as part of its multiplier effect. 

While stating that India is under-screened currently, Vats was hopeful that as the industry grows there would be a multiplier effect on screens as well to supplement the film industry, because supply is the vector for growth in demand. “If there is more content, there will be more consumption,” he added. 

Continuing further, he said, “The question to ask is given our role as force multiplier, how much steam do we have left? Because, if the engine starts to weaken, it is obvious that our role as a force multiplier will also reduce.” 

According to him, there is good news on this front. 

• Our ad-spend to GDP ratio is still 0.4 per cent, compared to 1 per cent in developed economies. 
• The total sector is ~1 per cent of the GDP, compared to 2.5 per cent or so in developed economies. 
• While our TV audience (780 million) is bigger than that of the total population of Europe (745 million), we still have only 64 per cent penetration with 183 million households – with electrification progressing at a blistering pace – imagine future growth.

What’s the media’s role in all this? 

Instead of prescribing a to-do list for the government, Vats highlighted 3 things that M&E needs to do – one for the government, one for us as the industry and the final one for us as society. 

He said, “From the government, my ask is an e-enabled single window clearance. This will go a long way in enhancing the ease of doing business and facilitate the growth of our industry even further. This is needed for films, events, licensing, et al.” 

He further said that the M&E industry needs to learn to collaborate more. “The scale of the industry is such that innovation and disruption is bigger than what any single one of us can achieve. It is only when we form partnerships that we can achieve greater heights,” he added. 

He also called for the industry to become comfortable with data as it would help bring in more transparency, authenticity and objectivity to our data. 

“Finally, my third ask is that as a society let us learn to laugh at ourselves, sometimes; loosen up a little. This is an industry that has creativity at its core and we will be able to scale greater heights when we learn to afford creative people some leeway. We must operate within a larger boundary towards our responsibility to society but be cognizant to not take ourselves too seriously, lest we stifle the creativity that lies at the heart of society.” 

Vats concluded his address by re-iterating that the M&E industry needs to be the force multiplier for growth, change, jobs and above all, for the good of society.”

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