Deeper into India

An update on landscape evolution and factors of success

The number one and most common concern of producers in India today is the ability to monetize their films and generate ROI for investors. Speaking with Shibasish Sarkar, the President of the Producers Guild of India, he noted that while long term macros are intact, there are transitional challenges that the industry needs to overcome at the ground level and the only thing in individual control is costs.

More recently, Shibasish revealed that at the Federation of Indian Chambers of Commerce & Industry (FICCI), a non-governmental trade association and advocacy group based in India, members are discussing issues ranging from VPF costs, ATL budgets and the ballooning expenses of star entourage.

On the back of this common concern, is the fact that access to institutional financing remains a challenge as the business is still perceived as a high-risk sector.

“We need to work on changing these perceptions as at an operational level, a lot has changed for the better,” remarked Shibasish.

“On the theatrical side, majority ticket sales are from multiplex chains, this means transparency of revenue reporting and receipts. On the non-theatrical side, majority of the revenue streams from satellite and digital are from established multi-national corporates. Producers are better poised to secure financing. But a lot of work needs to be done in this area.”

Shibasish Sarkar

President

Producers Guild of India

iNSiGHTS magazine asked Shibasish what his most pressing issues these days were, as President of the Producers Guild of India.

At a two-level conundrum, Shibasish first looked at the local level, where the after-effects of the pandemic are still not behind us—there seems to be a permanent shift in audience behaviour and the exhibition sector is grappling with lack of footfalls.

“While we may have seen unprecedented audience support to certain films, producers and distributors are yet to get a handle on the emerging trend. Most of the industry participants are grappling with this issue, not being able to access what kind of stories will work and what films to produce,” explained Shibasish.

Globally, Shibasish zooms out to the larger ecosystem, with rippling effects, seeing a meltdown in the media-tech sector. Stock prices of leading players are down significantly from their earlier peaks. This gloom has percolated down from the board rooms to the studio floor.

“As managements take a close look at the content ROI, the number of projects being green lit has reduced and budgets have been tightened; this environment is not conducive for film makers,” Shibasish highlighted.

This, on top of the fact that post pandemic, the advertisers are not back yet and therefore satellite buyers are also cautious and selective.

“With the exhibition sector not firing and non-theatrical revenues being soft, the focus is to reduce cost and curate stories that will work,” said Shibasish, which brings us back to the concern of producers grappling with not being able to access what kind of stories will work and what films to produce.

On a lighter note, the spike in digital content consumption during the lockdown gave a very big boost to regional language content. Satellite and digital programming now have an almost 50% share of regional language content.

“While the growing NRI and Indian Diaspora is helping grow the reach, foreign audience who are essentially non-language speakers too are celebrating Indian content, whether it is the RRR euphoria at the Oscars or the Kala Chasma renditions across the world, regional has gone global,” underlined Shibasish.

“In the last two years, we have not seen many foreign players—established or independent—set shop in India, but one global hit emerging from the region will help many watchers on the sideline make up their mind,” he continued.

India is a mobile first digital economy. The domestic data consumption per user is among the highest globally and will only increase with adoption of 5G. This demand, coupled with improving data affordability and accessibility, has made India an attractive destination for international players.

Leading OTT players, says Shibasish, are focusing increasingly on India, and additional investments by other content providers etc. will further expand the market. India is also the world’s largest film industry in terms of tickets sold and number of films made. Apart from Bollywood, regional language films in India contribute as much as 45% of the aggregate revenue of the Indian entertainment industry.

It is obvious that India has all the ingredients required for sustainable growth and profitability, a young demographic market, large & addressable consumer cohorts, strong regional languages segments loosely tied in by a shared social culture. This makes India a compelling proposition for multi-national platforms, broadcasters, and studios.

On the other hand, Shibasish noted that India is known for its out-sourcing services, backed by a well-qualified, English speaking, IT savvy workforce and caters to several VFX, animation, gaming requirements across the globe. With the setting in of the OTT viewing habits, it is only a matter of time that India will also become a source of stories and characters that traverse across the world.

Indeed, this is why Shibasish saw the need to have IMAC, a company he founded, which was started as a blank check company formed under the laws of the State of Delaware on January 15, 2021.

“We formed IMAC for the purpose of effecting a merger, asset acquisition, or similar business combination with one or more target companies within the media and entertainment sector,” explained Shibasish. “The intention was to focus specifically on companies that are positioned to benefit directly from the India growth momentum with a focused search on content, film, animation, streaming, digital media, gaming and e-sports,” he concluded, noting that the team at IMAC specifically possesses a deep understanding of the media and entertainment space, the evolution of these sectors and market opportunities.

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Shibasish Sarkar will be making an appearance at ATF’s India Road Show Series 2023, Mumbai Chapter.