In the last four months, the media and entertainment industries in India have been hit hard due to the ongoing Covid-19 crisis. Advertising revenues, which is the industry’s lifeline, have shrunk by 50-90%, according to industry estimates.

And the bigger challenge is the impact on jobs and livelihood of those impacted. An estimated 20% of the industry’s workforce may lose their jobs because of the Covid-19 pandemic and lockdown.

Media businesses have prioritised advertising over content and it has undersold itself, said Uday Shankar during the 21st edition of FICCI Frames, a media conclave held by Federation of Indian Chambers of Commerce and Industry (FICCI). Shankar is currently president of Walt Disney Company’s Asia Pacific business – which had bought Star’s operations in India.

"The biggest bane for the industry has been its high dependence on advertising. If the media industry has to grow, the one thing that must be fixed is to get people to pay for what they consume," said Shankar highlighting the importance of paid content. "If the industry has to grow to the next level, I think the one thing that must be fixed is our ability and our desire to get people to pay for what they consume. That’s the only way this industry can grow."

Shankar said that the industry is set to take a huge hit on account of disruptions caused by the pandemic and that is "directly related to the industry's disproportionate dependence on advertisements".

"While it is true that advertising revenues have helped the industry grow and sustain, there have also been a lot of distractions, where businesses have prioritised advertising over content," he said adding that the advertising revenue in media in 2020 has grown to USD 10 billion from USD 1 billion in 2000.

The media industry in India is pegged at $20 billion, of which half is contributed by advertising alone in terms of revenue. Television remains the largest medium in terms of advertising, followed by the print and digital. But, the Covid-19 pandemic has disrupted the business, taking a heavy toll on advertising across categories.

Globally, the media industry has grown on the back of establishing a ‘direct’ relationship with consumers, Shankar said. “All of us are guilty of this. We decided to be short-sighted, we decided to subsidise our products and created hurdles for small challengers.”

He requested the government representatives to recognise the media and entertainment sector as an important part of the economy that can create jobs, businesses and wealth.

Meanwhile, Sanjay Gupta, country manager and vice-president at Google India emphasised on reforms in the media and entertainment sector. "We do need to expedite some of the policy decisions that can help in the sector’s recovery such as a simplification of the taxation framework, adoption of a light-touch regulatory approach, infrastructure status to the industry and support to accelerate exports of films and games. We believe that we can be a 100-billion-dollar industry by 2030."

Amid the Covid-19 pandemic, the conclave was held virtually and discussed the ‘role of creative economy to revitalise economic growth’ with panellists, including Gupta of Google; Prakash Javadekar, minister of information and broadcasting; Shankar of FICCI and Walt Disney; Anurag Thakur, minister of state for finance and corporate affairs; Sangita Reddy, president of FICCI; and moderator Dilip Chenoy, secretary general at FICCI. 

Held annually in March, Frames was postponed because of the Covid-19 pandemic. The summit started on Tuesday and would continue till Saturday.