The Hindu Business Line : `Piracy survives because someone is willing to pay'

THE end game in the addressability issue will depend on the consumer, according to Mr Kunal Dasgupta, CEO, Sony Entertainment Television, and co-Chairman, FICCI Entertainment Committee.

"Ultimately the consumer will have a say. The only way addressability will come through is if there is something better than existing system," he said in an interview ahead of the annual FICCI Frames Conference.

How would you describe the Indian entertainment industry at this juncture?

Overall the entertainment industry has a lot of potential for growth. It has come quite a long way in the last 10 years, but there are a number of issues in each of the segments within the entertainment sector, whether it is television, films, music or home entertainment. However, subject to these issues, there is a huge growth potential.

Clearly, the various facets of the industry are going through a metamorphosis. What, according to you, are the main issues confronting them?

There are a number of issues confronting the industry. For films the biggest issue is that of piracy. Entertainment tax and investments in multiplexes are other issues. How quickly digital cinema will roll out is yet another issue. The film industry is largely dependent on how fast some of these things happen.

For television, the growth is dependent on how quickly addressability is put in place - be it CAS, DTH or broadband and how fast they are rolled out. As far as other various value additions like home entertainment, pay per view and video on demand, all of that is dependent on the technology change. Much of it will also depend on how quickly mobile entertainment will become possible through the networks. A large part of this growth depends on how technologies open up.

In the area of music the development of new music formats and the format for delivering music electronically are going to be deciding factors. Music companies will have to find out how to monetise the virtual delivery of music. As for radio, until the existing structure of licensing change viability is going to be difficult. Radio has a handicap as it is not allowed to do current affairs and news. This takes away the opportunity of tapping local communities for advertisements. Radio is also a limiting technology because nobody pays to listen to it.

Piracy is a major issue confronting the industry. Do you think the industry has the wherewithal to fight piracy rather than rely on government initiatives?

Pirates survive because there is a demand and somebody is willing to pay. Piracy generates business by underpricing and offering products at lower prices. The only way to beat pirates is to price products lower than what they offer and get huge volumes. The only way you can fight piracy is to make it uneconomical to be a pirate. Music piracy is worse, because people get music without having to pay for it. There needs to be a fundamental change in the business structure. Primarily, there is no corporate aggregation of these businesses; no single player big enough to influence.

Business Process Outsourcing seems to be buzzword at this juncture. Where do you see the BPO opportunities in this industry? Should the industry rely too much on BPO opportunities?

We have got skilled manpower, we can do animation, post production, special effects, gaming; in all these areas we are low cost producers with high quality. We can take advantage of opportunities in these areas. The industry should go where the demand is.

Which, according to you, are the yet untapped areas within the gamut of entertainment?

There are a number of areas such as broadband and mobile entertainment. The biggest segment according to me is home entertainment.

Since you have been associated with the television industry, what do you think is the end game in the addressability issue?

The end game depends on the consumer. Ultimately, the consumer will have a say. The only way addressability will come through if it betters the existing system. It will be a pull thing, cannot be a push thing. End game will come when solutions result in consumer enhancement.

Consumers are passive as long as they don't see a better deal. The moment they see a better they will shift there. Cable is the cheapest option anyway; to beat cable other technologies will have to be better and cheaper. But addressability is important for future growth.

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