The story behind India's top 10 media firms

What does the changing composition of India’s top media companies indicate? 

In 2003 when Star India was on a roll after Kaun Banega Crorepati, I did a cover story for Businessworld magazine, “The making of India’s biggest media house”. Star was then at an estimated Rs 1,200 crore in revenues nudging close to the Times Group’s Rs 1,500 crore. Zee at Rs 1,199 crore was on level with Star. Of the top 10 firms, five got a bulk of their revenues from publishing.  

Now in 2017, 14 years later, the list of India’s top 10 media firms tells the story of growth, missed opportunities and frustratingly cockeyed media regulation.

Take growth. From Rs 24,600 crore in 2003, Indian media and entertainment has grown nearly five times to Rs 126,210 crore in revenues. 

Zee is now a massive Rs 11,287 crore while Star and the Times have crossed Rs 10,000 crore in top line to stay put as India’s largest media groups. That is about 10 times their size in 2003. Network18, Sony, Tata Sky, Sun Network and Bharti Airtel (only its media business) are in the top 10 now, making it a TV-heavy list. Ever since private broadcasting opened up post 1991, it was clear that television was growing. The 2017 list hits you in the face with it. Seven of the top 10 make all their revenues from TV broadcast or distribution. TV has grown at roughly twice the rate of print, the second-largest segment of the industry. Print has done better than TV on profitability, with operating margins averaging 20-25 per cent for many. 

Bharti Airtel and Tata Sky have crept into the top 10 over the last decade as DTH firms invested heavily in building the ecosystem that brings TV signals to your home. Their rise reflects both — missed opportunities and botched regulation. The big miss? There is no cable firm in the top 10. At Rs 1,368 crore, Hathway Cable & Datacom might just make it in the top 20. Cable was the first technology to start distributing private TV channels. Of India’s 180 million TV homes, 100 million are still controlled by cable. In the US, cable companies are among the largest media firms. Why, then, is there no Comcast or Liberty Global equivalent in India? Because it is the most fragmented, opaque part of the business where revenues leak and regulation is difficult to enforce. 

Speaking of which, price regulation has kept TV content beholden to advertisers and the lowest common denominator. It has also meant pay TV, in the truest sense of the word, never took off. The result — the Indian TV industry is the world’s second-largest in volumes, but one of the smallest in revenue and profitability.

This is more evident in films. In the world’s largest film-producing country there is no film production or distribution firm in the top 10. In the top 20, PVR Cinemas just about makes it at Rs 2,062 crore. The US/Canada market makes less than half the number of films India does, but over 10 times the box-office revenues. One part of it is higher ticket prices in the US but the other is that India just doesn’t have enough screens to monetise its films. More than 70 per cent of the industry’s Rs 14,200 crore in revenues comes from screens. This, then, is a serious infrastructural issue. The US/Canada market has more than 43,000 screens against 9,000 in India. More screens mean more taxes and many more jobs. 

The soft power of Indian cinema has been acknowledged across the world. But within India, the focus has always been on censorship, not facilitating the building of an infrastructure to leverage its creative muscle. 

The 2017 list then is not a reflection of the true, unfettered potential of India’s media and entertainment industry. It is the list of a bunch of firms that have done the best they can in a market and regulatory environment that does not yet think that media can be a large, positive contributor to gross domestic product.

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