When billionaires come together industries shake. The decision by billionaire investor George Soros top put $100 million for a three percent staked in Anil Ambani’s Reliance Entertainment has indeed shaken up the sector .
Go to any film studio in Mumbai or a gaming café in Bangalore and you can see that consumer interest and easy availability through retail is allowing for a boom in India’s entertainment sector. The Indian leisure classes love their movies and their TV shows and there are more then 150 million of these willing to pay for content.
According to Price Waterhouse coopers, a consultancy, Indian entertainment industry has a turnover of $10 billion. It is estimated that the industry will be worth $13 billion by 2010.
The crucial difference this time is that this industry is moving away from fragmentation. Mr. Ambani’s enterprise for instance has under its roof more then 100 theaters across India and an equal number planned in the US. It also has film production firms that have signed upon big names in bollywood. Add to the menu gaming portals, postproduction faculties, an animation firm, TV programming companies, DVD distribution, FM channels with a pan Asian presence and music. What emerges is a media conglomerate in the making that can do the famed end-to-end operations Ambani style.
The larger industry too is growing exceptionally. New television channels are multiplying like rabbits similar growth is there in sectors such as movies and magazines. The Indian consumer is growing richer and more literate and there is also the back up of the foreign residing Indians hungry for content from back home. The annual growth of 18 % in this industry is looking to get bigger.
In all this growth however there are real issues distribution still remains a bottleneck though direct to home access will in time change that. The entertainment industry is heavily taxed making film tickets expensive even in small towns. Revenue models from entertainment avenues including FM radio and the Internet are in its infancy. However investors like Soros have taken a bet that a foot n the door now will ensure rich rewards as the market matures. This appears to be a good bet.
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