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Speech by Shri Vinod K. Lamba at "FOCUS 2012" - ASSOCHAM.

Ladies & Gentlemen,

My thanks to Assocham for giving me this opportunity to address this august gathering. I am also grateful to the Hon’ble Minister for Information & Broadcasting Ms. Ambika Soni, who has kindly consented to exchange her views in the convention. Being the head of Film Federation of India, the apex body of India film industry. I take this opportunity to express my sincere gratitude to Ms. Ambika Soni for pleading the service tax matter before the Hon’ble Finance Minister and seeking adequate relief for the film industry. We will always be indebted to you madam and shall be looking forward to your help from time to time in other problems of the Film Industry.

Indian Film Industry has come a long way from pre Independence Era to the modern economically powerful India. It has kept its pace with economic growth of the country and now reckons with the best Film Making countries in the world.

Every facility available in Hollywood is now available in India also. Indian Film Industry is poised to grow from 3.2 billion USD in 2010 - to 5 Billions USD in 2014 as per CAGR of 14.1%.

Our stars Directors, Producers, Music Directors & Technicians have now worldwide recognition.

The Assochem objectives for FOCUS this year has been on;

  1. Digitization of Indian Entertainment Media Industry
  2. Promoting Regional Film Industry on Global Platform.

The Indian entertainment industry is on the way of emerging as a large market globally. Future growth of the industry is expected to be led by rising spends on entertainment by a growing Indian middle class, regulatory initiatives, increased corporate investments and the industry’s dynamic initiatives to make strategic structural corrections to grow. In addition to the Indian middle class enhanced spends projected towards entertainment, the rising global interest in Indian content is expected to fuel growth in this industry.

Increasing penetration of new delivery platforms is one of the key drivers of the media and entertainment industry today, that has the potential to change the way people receive content. These platforms, resulting from fundamental technological breakthroughs, are likely to see most of the action in next few years. For example, the spread of inexpensive and stable storage media will also enable people to store content and view it at their convenience.

Together, these are expected to change the viewing habits of people.

The entertainment industry is thriving on the current economic upswing. Due to
its sheer size, television has been the main driver for the industry’s growth, contributing 62 percent of the overall industry’s growth. Films contributed another 27 percent, while other segments like music, radio, live entertainment and interactive gaming constitute the balance 11 percent.

The entertainment industry is now at an inflection point. The earlier phase of growth has run its course. Now the industry is ready to enter a second stage of growth powered by the twin engines of technology (availability of quality infrastructure and the accelerated penetration of digital connectivity) and an enabling regulatory environment.

The coming of age of the television sector has been the primary driver of the growth that the entertainment industry has seen over the last decade. The private sector enterprise seen across the television value chain in the nineties drove the sector to newer heights. It is now the most important component of the entertainment industry, contributing over 60 percent of its revenues. It is expected to continue powering the industry in the digital era, through various innovations like DTH, interactive television, etc.

Though in revenue terms, films contribute just 27 percent of the entertainment industry, its visibility and impact is much more than this figure suggests. It is also a major driver for other sectors like music, live entertainment and television. It was accorded the status of an industry in 2000. Since then, some progress has been made in developing transparency and professionalism in this sector but lot has to be done at Private & Government level.

Music radio and other emerging segments like animation, interactive gaming and live entertainment together account for remaining 12-13 percent of entertainment revenue.

Piracy and revenue losses at the last-mile are the bane of the entertainment industry. They prevent the rightful owners of the content from realizing its full value. All sectors of the industry, except radio, suffer from these twin predicaments in some way or the other. Currently, such losses are estimated at INR 4.3 billion, which amounts to over 40 percent of the industry’s total revenues. While such losses are expected to continue for another two to three years, a reversal is expected eventually as a result of a combination of a technology push (with a wide repertoire of film and music becoming available through a variety of legitimate and convenient platforms and options) and a demand pull (with increased internet penetration and the advent of broadband) as well as digitization of Cable Industry.

I must talk about the Regional film industry which is the other topic Assochem has taken. The major regional film industries are Tamil and Telugu & Malayalam, which together earn around INR 15 billion, followed by Malayalam, Bengali, Bhojpuri and Punjabi. The average cost of production of a regional film, in keeping with its limited market (compared to a Hindi film) and lower revenue potential, are only a fraction of that of a mainstream Hindi films. Despite increased viewer exposure to a plethora of entertainment options on satellite television, the number of regional films produced annually is approx 1000 where as Hindi is little more than 200 currently.

While National Film Award encourages regional films for their quality and presentation more centre & state incentives shall encourage Regional Film in India to grow further.

In spite of worldwide recognition of Indian Film Industry, a lot has yet to be achieved to compete with International Cinema and therefore in terms of discipline and cost control, the level of professionalism has to be put in.

All Film Makers should rejoice the new heights attained by the Indian Film Industry & they should also introspect as to when they can reach the legendary Film Makers like Satyajit Ray, Bimal Rai, Raj Kapoor, Guru Dutt, Mehboob Khan, L.V. Prasad & AVM.

You may please forgive if I have missed some other great names.

We must put on record the contribution of Information & Broadcasting Ministry in solving the problems of Film Industry from time to time & most humbly suggest to create a consultative committee to recognize forth coming issues before the Industry & solutions thereof.

I understand that the Information & Broadcasting Ministry has made some formidable plans to celebrate Indian cinema’s successful completion of 100 years. Though FFI is also chalking out certain plans, it will be too happy to extend its full cooperation and support to the Ministry in this regard.

At the end, congratulations to Assochem for hosting 6th Summit of Focus – and best wishes for its great success. It is indeed a great forum for interaction of all sectors of Entertainment Industry & once again congratulations to the National Film Award Winners.

Thank you,
Vinod K. Lamba

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