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BW Businessworld

The Media Dichotomy

After being ignored in the government’s relief packages, many M&E players must brace for what will be an ‘existential crisis’ By Noor Fathima Warsia

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The exclusion of the Indian media & entertainment (M&E) industry from the government relief packages in the wake of Covid-19 has attracted a slew of responses. Industry bodies that had reached out to the PM’s office and the finance minister ahead of the articulation of the stimulus package, say that this development will entail long-term damage and continue to seek assistance. At the same time, an effort is being made to look at ways to minimise the impact of independent India’s worst recession on the sector. 

The backdrop 
The M&E sector depends on consumption both in-home through TV broadcast and digital media platforms, and out-of-home largely quantified by theatrical releases. Measures to curb the spread of the pandemic had a direct impact on both of these. The demand for in-home increased multifold, and movie releases have come to a standstill. The small screens will be favoured over the big one.

The government had classified ‘print and electronic media’ including broadcasting, DTH and cable services, as one of the ‘essential services’ during the lockdown period. However, with commute restrictions on employees and halted production schedules, content creation itself has become a challenge to broadcasters. Sporting events such as the 13th edition of the Indian Premier League and other industry events are either delayed without a date or called off. With more than 150 TV serials and 100 web series stuck in the process, advertising revenue has taken a hit.

“With complete cessation of production of television shows, cancellations of live sporting events and scheduled advertisements, advertisement bookings nosediving by nearly 50 per cent, and delays in payments by advertising agencies/advertisers and distribution platform operators, the broadcast sector is facing the brunt of the slowdown,” explains Indian Broadcasting Foundation’s President, N.P. Singh.

The film business too is expecting a Rs 2,500 crore ($330 million) loss, as per trade analyst Komal Nahta. In a media report, Nahta cited the example of Chinese theatres, stating, “If you’re selling tickets based on social distancing, you’re reducing your capacity because for every seat you sell, you keep one vacant. If your capacity is 50 per cent, it will not support the huge film budgets.”

The call for help
The IBF has sought government’s support to deal with several concerns. These broadly were aiming for phased resumption of production and mandatory digitisation of subscription and advertising payments, regulatory moratorium for the sector, taxes and fee waivers, payment deferments on some counts, etc. IBF also called for state governments to take steps to ease out daily operations.

The government issued relief packages also did not offer anything for the corporate sector in manufacturing or services. Sectors such as ecommerce, aviation, automobiles, hospitality and tourism were also overlooked indicating a sharp decline in advertising revenue coming from these. Given the hit on the sector itself, the resulting cash flow problems and the drop in revenue, many IBF members are facing an existential crisis. 

“While we welcome the compliance and statutory relaxations granted by the government in its April 15 notification, the broadcast sector needed a stimulus package in the form of economic relief and regulatory flexibility so that all broadcasters especially the smaller businesses could get back on track,” Singh explained. 

The big picture
On the film side, the industry is trying to assist their own, especially in workforce. For instance, producer bodies such as Producers’ Guild of India, production houses such as Yashraj Films and Red Chillies Entertainment, NGOs such as Being Human Foundation and Meer Foundation in addition to a host of actors have donated towards Covid-19 relief funds. These aim to provide monetary aid to 35,000 film crew members, a month’s ration essentials and other needs.

Following the announcement of the stimulus package, the Federation of Western India Cine Employees (FWICE) that represents associations covering 32 different crafts of the workers and technicians of the media and entertainment industry, reacted to FM Nirmala Sitharaman expressing its disappointment of being left unaided. “We have sent numerous correspondences to the PM and I&B ministry for providing aid to hundreds of workers and technicians associated with the industry who are categorised as daily wage earners, but have not received any help from the government,” said FWICE’s President BN Tiwari. He reminded that some suggested solutions such as shooting in green zones will not be easily achieved and is also not “feasible”.

Mass media’s dependence on other sectors for its revenue and film businesses’ house arrest is compelling the industry to exert extreme caution. This vigilance, clubbed with hesitation and kneejerk reactions, is adding to the sector’s uncertainties. Some form of relief must come in from the government to aid India’s M&E, which is one of the largest revenue generators for the Indian economy.