The Hindu Business Line : Breathe life into exports

THE entertainment industry in the country has been growing at a compounded annual growth rate (CAGR) of 22 per cent over the last three years and India provides attractive opportunities for export of animation software, films and a base for content production, say industry watchers. Growing advertising spend, the potential for exports and deregulation will help the entertainment sector reach a size of about $6.8 billion by 2007 as against $5.3 billion now, they say.

A report by consultant McKinsey and Co and the Federation of Indian Chambers of Commerce and Industry, unveiled at the India-Asean Business Summit, has highlighted the potential of the entertainment industry, particularly in production content and animation export.

While TV software is one segment of the value chain that is making money today, it is projected that India offers a sizable animation export opportunity with a large base of high-quality, low-cost manpower with core skills.

Also, the Indian film industry is fragmented and offers significant scope for industry corporatisation and exports. The radio industry too is likely to take off soon due to deregulation. However, because of the high licence fee, few players will make money, going by the findings of the report.

Film maker Yash Chopra, citing the issue of piracy at the summit, has cautioned that the menace must be curbed, if the industry wants to grow. He has also sought more stringent copyright laws.

Interestingly, the report indicates that the growth of the television software segment has been driven by the increasing demand for original content from channels. This will help the channels to post gains in ratings.

Exports can play a big role in providing critical mass. Also, the scene is ripe for the entry of large studios that can provide a wider spectrum of expertise, financing and management skills. This will, in turn, boost the overall potential for business in the country.

The entry of international players in the music industry, export of films and the corporatisation of the industry, as stressed earlier, are seen as the key growth drivers.

As far as the music industry is concerned, with new technologies allowing access of music across various platforms, and MP3 downloads on the rise, the industry is dominated by film-based music, to some extent. Further, the competitive bidding model for film music rights has led to astronomical sums being paid. Each segment must take into consideration issues specific to it that need to be addressed. This will help boost growth eventually.

All said and done, the trend report maintains that India is an attractive country for business, particularly export of animation software.

The global market for animation software has been projected at over $40 billion. India is in a position to make the most of the opportunities and garner a bigger chunk of the global business, going by the report.

Picture by Shaju John

vrishi@thehindu.co.in

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