Entertainment biz needs transparent & process-controlled culture of investment

MUMBAI: The need to build a transparent and process-controlled culture of investment in the entertainment industry and look for innovative ways for financing the industry was underscored by investment bankers and film financing consultants at FICCI FRAMES 2011.

Ambit Group CEO Ashok Wadhwa pointed out, "The entertainment industry attracts an immense amount of passion and interest, which offers huge opportunities. Yet, the industry is starved of capital. Budget after budget has gone by without any significant incentive or concession from the government. To leave the industry unattended, to fend for itself, smacks of partiality against it and in favour of other government-supported sectors."

Moneypenny Australia CEO TV Jane Corden, in her remarks, suggested that Indian industry could tap the opportunities offered by co-production and co-financing from Australia. Co-production, she said, had reached a stage of maturity in Canada, Australia and Europe, which allows entertainment industry players to successfully piece together finance for their projects.

GoldmanSachs India vice president Media & Entertainment Nirvaer Sidhu, stated that film producers were today looking at markets outside the classical mould and foreign companies and studios were eyeing India with great interest. The investors, he said, were looking at mitigation of risks, for alignment of interests with project promoters, simpler business models and desired intermediaries to manage the interests of producers and studios.

Avendus Capital Private managing director and CEO Ranu Vohra, underlined the need for creating an ecosystem akin to that of the Silicon Valley and ways to attract investments from High Networth individuals. The entertainment industry, he said, was a high-risk, high-return business; it requires funding from corporations that have made it big. Such an investment culture would spawn disruptive innovation which would, in turn, throw up new funding models.

YES Bank executive vice president – media & entertainment Karan Ahluwalia, noted that in order to propel growth in the media and entertainment industry injection of capital was vital. This could come through collaborations and joint ventures and hedge funds that are currently in vogue in financing Hollywood movies. Several private investment firms are making agreements with major studios in the US to co-finance slates of movies over a period of years. There is also an increased enthusiasm among filmmakers to tap film funds, he added.

Kaleidoscope Entertainment managing director Bobby Bedi called for transparency in reporting profitability of film ventures. The fiction created by filmmakers puts off the real investors, he said and emphasised the need for following processes so that investors are not taken for a ride. His advice – "Please be passionate about your business but don’t do it in a haphazard manner."