Viacom18 CEO and MD Sudhanshu Vats speaking at the 8th edition of the Big Picture Summit said that ‘Free-range parenting’ might be the key to unlock the potential for transformational growth.
Addressing the audience, he said that it is a very unique time for our industry and for India. He said that both the industry and India for that matter – are seeing many ‘resets’ across the board.
He said “Our industry is seeing the entry of global firms that have enormous capital, patience, and experience (Disney, TikTok, Google). At the same time, we are seeing the emergence of smaller players, better talent and balancing of the value chain within the sector with all the constituents beginning to partake in the value creation. We are also witnessing a Direct to Consumer revolution with OTT platforms driving consumption fueled by inexpensive data plans.”
Continuing his address Vats shared two conditions that have to be met for the sector’s growth to be transformational.
a) The growth has to be more widely distributed within the value chain – in fact, it must be over-indexed towards smaller participants who wield lesser power than their larger counterparts. This will create a more competitive industry with a strong base – one that is more resilient to disruptions. That in my mind is very critical.
For example: In the past, writers in India weren’t receiving as much due credit and value that they are now.
The growth has to ensure a rightful share and size at a national and global level.
i) Nationally, we need to move the sector’s scale from a 1% share of GDP to about 2% of GDP like the developed world.
ii) Globally, we need to top the tables not just when it comes to metrics that measure product output and audience metrics but actual revenue and spend pools. These are only back-of-the-envelope calculations and there might be some differences when it comes to methodologies, exact numbers, etc. but you can’t deny that there’s still a huge differential. In PPP terms, India’s overall economy is ~50% of the US economy.
This growth – transformational growth – can be a huge driver of the 5 Trillion USD Indian economy.
Vats said that any industry’s growth can be attributed to the actions of 3 main actors: firms (Supply-side), consumers (Demand side) and policymakers. He pointed out the recent successes of India digital originals (Sacred Games scored 100% on Rotten Tomatoes) and Indian films (Andhadhun in China) to demonstrate that we have the potential to make a global dent.
He said that policymakers can drive a huge impact on a lot of aspects. TRAI received praise from the CEO for acting on the NTO which is still settling in. The revamp of the copyright regime, the cinematograph act was given as the impact of policymakers.
He said that the regulation needs to converge – so that there is no scope for arbitrage. For instance, I can launch a digital OTT platform and charge whatever I want – play how many ever ads I want – but when I launch a TV channel I have to abide by a set of tariffs and not exceed 12 mins of advertising in an hour, etc.
Referring to the concept of ‘helicopter parenting’ which became popular during the late 90s and over time, led to overprotective parents who actually stunted the ability of their children to transition into independent adulthood Vats said that he sometimes feels that regulators and policymakers might be making the same mistake when it comes to the M&E sector today.
He continued “No one is doubting your intention, but the outcome could be different. This might be disastrous if you recall the point I made earlier, we have the potential for transformational growth. We should not look back later and regret our actions.”
He called on the policymakers to replicate a philosophy similar to free-range’ parenting of regulation for us. The methodology behind it is that it translates to less anxiety, less stifling behaviors, and less coddling.
Towards the end of his address, he said “Let us be. Let the dust settle. Yes, we will make mistakes. Yes, we will be naughty at times. But we will learn. And that will make us globally competitive. For instance, we’ve just witnessed the most landmark reform in the world of Indian Pay TV broadcasting, ever. Of course, it’s not perfect – but tweaking it every month and a quarter will have disastrous consequences.
Maybe, in ‘free-range’ style, taking a break for say 2 years – and watching us closely – will be more beneficial for us in the long run. We provide employment (direct & indirect) to over 5 Mn Indians and can take this to 10 Mn in 3-4 years – creating transformational growth. Our export potential is 10 Bn USD -more than 10x of what it is today – and we don’t need exhaustive, difficult to negotiate multilateral agreements to get there. We just need the freedom to create, connect and converge. This is totally in sync with Prime Minister Narendra Modi’s vision of maximum governance and minimum government.”