Slowdown hits entertainment industry

The song and dance never ends in Bollywood's dream factory but the dream may turn sour as recession hits the box office and industry pundits predict sluggish growth.

As per a FICCI-KPMG report on media and entertainment sector 2009, the media and entertainment industry in 2008 grew at a CAGR of 12.4 per cent as compared to the previous year. Moreover, the projected growth for the next 5 years is the same 12.5 per cent that is pretty much a flat growth rate.

Also, ad revenues are expected to fall to 12.4 per cent from 17.1 per cent in the last three years.

"The slowdown is from the business point of view. We, at Rajshri, have witnessed almost 25 per cent dip in ad revenues," said Rajjat Barjataya, MD, Rajshri Media.

At the biggest business meet for the sector, the mood is at best somber.

The mood, this time, at the FICCI Frames is low key. The media biggies are tightening their purse strings.

''We are definitely cautious. However, we look at India as a long-term opportunity,'' said Peter Smith, President, NBC.

But all is not lost. Global media players are still optimistic. Turner International is all set to launch its Hindi GEC even in the midst of the economic downturn.

Entertainment Networks,South Asia Turner International Pvt Ltd

"We are looking term players and hence we are going ahead and are positive," said Monica Tata, VP and DGM, Entertainment Networks, South Asia Turner International.

The tourism ministry too is chipping in.

‘‘We are talking to Yash Chopra and Karan Johar. This is a great opportunity and it is much cheaper to shoot in Kashmir than in those expensive foreign locations," said Nawang Rigzin Jora, Minister for Tourism and Culture, Jammu & Kashmir.

Although the availability of funds is a question, long-term prospects continue to be positive. What's largely fuelling the demand is the global appetite for Indian content.