“Nobody knows anything” — Though this has always been quoted in a different context about hitting bull’s eye at the feature film box office, it couldn’t be truer for the media and entertainment industry currently reeling under the effects of the coronavirus pandemic. The film industry had barely managed to find its foothold with 50 percent occupancy in cinemas just recently, supported by a couple of good releases since Diwali and a strong lineup of films in 2022 that looked promising. The third wave of the highly transmissible omicron variant has been an obstacle for the entertainment business again.

Industry reports note the market size has shrunk in each of the sectors with the negative growth in FY20-21. And now FY21-22 with some sectors hit more badly than the others barring online streaming and gaming industry, which have shown phenomenal growth even during the lockdowns.

Though the film business is a torchbearer of the Media and Entertainment Industry and gets the maximum media coverage due to popular opinion, the business contribution by each to the sector is in descending order below —

TV Broadcasting

Print

Gaming

Digital

Audio

Filmed Entertainment

Animation VFX and Post Gaming Comics

Live Venues/Shows

The last year’s Budget left the media and entertainment sector bereft of any relief or major sops, considering our industry isn’t seen as a serious contender contributing to national growth especially in the legacy or traditional sunset businesses in media. It’s high time the contribution of the indirect impact of the media and entertainment sector on other sectors like tourism and its soft power showcasing of Brand India is harnessed well internationally like our US and Chinese counterparts. We have a long way to go.

However, AR and VR startups that promote tech utilisation in the media businesses could see growth thanks to the investments and funding done in 2021.

The VFX and post production business depends largely on live-action and animation in films and OTT/broadcast projects. The VFX and post services studios managed to pivot quickly to working from home via the cloud to ensure content reached direct to homes via streaming services while continuing shoot with restricted crew and safety measures. VFX and post facilities have recovered marginally in 2021 after the 2020 washout, with increased demand for high-end VFX in movies and digital shows.

While theatres have been limping back to recovery, the current pandemic situation has forced them back into survival mode. Since theatrical revenue for big-budget productions like RRR, Lal Singh Chadda cannot be completely monetised via the booming digital streaming/OTT platforms and the exhibition/distribution ecosystem need tent pole content when the third wave subsides and rebuilds the pent up demand of audiences.

The entertainment sector is usually dependent on overall public sentiment. Going to a cinema, spending on family entertainment happens when the overall economy grows.

Similarly, the entertainment sector usually features a low on the budget priority list for the government, whose primary focus is to ensure livelihood followed by recovery and growth after two devastating years of the pandemic. Our sector directly and indirectly employs livelihoods and the Budget has to ensure that it at least protects the livelihood of those cogs involved in making the now standstill wheels turn.

With major consolidation happening across the broadcasting space with Disney and Foxstar, Sony and Zee and amongst major Hollywood international studio networks, there is a gradual change of guard with traditional film and media companies being challenged by the new order with the likes of Netflix, Amazon, Google and Facebook.

With a lot of catch up to be done in terms of beating the negative growth, the budget will have to address the industry pain points for badly affected sectors. Some important addressable pointers might be —

— High GST rates levied on live entertainment and theatre tickets

— Relaxation in the percentage of GST taxes for a brief period until the industry catches up to pre pandemic performance,

— Recognition of the AVGC industry as an entertainment infrastructure building business that contributes to Brand India

— Support for local and regional content to encourage homegrown and regional brands

— Film Production and Film Exhibition sectors support since both were badly hit during the pandemic

Summing it up, probably it’s more prudent that the overall industry sentiment is focused on facilitating policy changes for the entertainment sector through the year rather than pinning all hopes on the yearly budget where the government's primary aim is to focus on livelihoods to build and sustain the nation’s economy and growth which eventually helps the spending in our sector.

—The author, Nishit Shetty is the Chief Business Development Officer at Red Chillies VFX. Views expressed are personal

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(Edited by : Ajay Vaishnav)

First Published:Jan 22, 2022 8:32 AM IST