Snapshot – Indian Home Video Market

Growth in number of DVD players in India :

• 2007 – 12 million
• 2009 – 40 million
• expected to grow by another 12 million per year.

However, the value of DVD sales is falling:

• 2007/8 – 350 Crore
• 2008/9 – 320 Crore (estimated)

The industry estimates that 90% of home film viewing is of pirated material. Despite aggressive cost cutting in DVD prices, many companies have not seen demand increase.

It seems to me that the biggest problem to be countered in combating piracy is distribution. Firstly of films, and secondly of legitimate DVD.

In terms of films, a huge weakness in the Indian distribution network is the lengthy delays in prints moving from the larger cities to smaller cities. No one wants to wait weeks to watch the films that the media is raving about, so buying pirate DVDs seems like a ‘fair’ option to people living in smaller towns. The cost of making enough film prints to cover all cities is prohibitively high, so the only solution to this is the steady roll out of digital cinema.

In terms of DVDs, until the police work to remove the pirate DVD stalls from train stations and shopping areas,  it is simply easier for most people to purchase pirated material rather than original DVDs. Now that companies like Moser Bayer are offering real DVDs at almost the price of pirated ones, if the availability of purchase locations was as convenient as it is for pirated material, then most consumers would prefer the higher quality of real discs.

When Moser Bayer began their discounted DVD strategy, their announced plans included selling the DVDs from stalls and roaming carts. I don’t know why they haven’t pushed ahead with this?

(Stats from Screen India, Oct 2nd 09)

Quick Numbers – Indian Cinema Attendance Statistics

  Dodona Research in the UK specialises in studying the cinemagoing habit of various countries. Here’s a couple of titbits from their India 2009 report:

• The often quoted stat that 4 billion cinema tickets are sold each year in India is likely very inflated – the accurate figure is probably around 1.5 billion.
• At the end of 2002 there were 80 multiplex screens, now there are over 1250. This year there will be around 190 million admissions.
• While multiplexes are booming, traditional single screens are rapidly closing. The time delay in moving prints from the multiplexes in cities to the single screen theatres in rural areas allows pirates to make copies available before the film releases – stealing much of the audience. Over 3000 screens have closed in the last 7 years. There are currently approximately 7,600 screens operating which will this year sell around 1.4 billion tickets.
• Average ticket cost at a multiplex is Rs.88. (This sounds a bit low to me? i have visited multiplexes in smaller towns and they typically seem to charge Rs.70 – 100. In bigger cities the ticket price is easily Rs.120-250.)
• In 2007, Multiplexes accounted for less than 30% of total box office takings. By 2012 this figure will be over 50%. However, 75% of tickets sold will be for single screen theatres.

The development of the Indian cinema industry is matching the pattern followed by other countries:

• Cinema is changing from mass audience entertainment to focus on a smaller, middle-class demographic
• Audience taste is gradually shifting to more sophisticated, international films

Motivating Top Managers in Changing Times

Of the many roles of a manager, ‘manager as coach’ is probably the one i have always found to be the most important and impactful for a company. I find that the most successful managers are actually the ones that are constantly developing their team members. Firstly this makes the team more productive/successful but as team members can take over more of the management duties, the manager in turn can complete even more high-level work.

This theory works perfectly well throughout most levels of an organisation. But what happens when you reach the top? A company’s senior management (CEO, CFO, CIO etc) are each specialists in their fields, and are, typically, successful managers who have worked their way up. Can a CEO ‘coach’ the executive team?

An article in McKinsey Quarterly explores the role of a CEO as an ‘emotional’ coach to the top management team.

When the economy or other aspects of the business environment change rapidly, senior managers can be thrown off guard. They have reached a level of seniority by delivering results through certain strategies and market assumptions. Suddenly those strategies no longer work. Often, the managers most affected are the ones who have been most successful in the past, as they may have never faced potential failure.

When a senior manager suddenly realises that their strategies are no longer working, at a time when their actions are most under scrutiny and the fate of the company may be at stake, the most automatic reaction is fear. Fear of losing their job, their reputation, and their identity as a senior manager.

“Spiking levels of fear can convert frank, flexible, open, and self-reflective leaders into defensive, close-minded, rigid, and literal ones. These leaders may take things personally, feel persecuted, cease productive self-reflection, and lose the ability to process new information and respond to difficult situations. Others in the organization will notice this, of course, and will let the executive know in subtle ways—reinforcing fear and defensiveness.” (1)

This is the point that a CEO needs to step in with a coaching mentality, not on a technical level, but an emotional one.

The first step is to create an environment where managers will be comfortable in recognising and hopefully verbalising their fears. Often this can be achieved by the CEO personally discussing their own fears, and by reaffirming trust in the manager. The work environment needs to stay positive and upbeat, with real transparency about employee job security and industry prospects.

Step two is to overcome denial. Because they don’t want things to change, managers can ignore or misinterpret the evidence of change. The CEO needs to find ways to force senior managers to look at things from a fresh perspective and abandon the old assumptions that are blocking their thinking.

Step three is to encourage managers to start learning. A new business environment has new risks, challenges and opportunities that all need to be mastered. Customer behaviour can radically change, forcing a rethink of marketing and promotional strategies and budgets.

 

(1) A CEO’s guide to reenergizing the senior team, Derek Dean, 2009

Why is Reading so Much Hard Work?

Lev Grossman at the WSJ has written a fascinating piece on the state of modern novels.

The key question that this answers for me is:

Why are books such as Harry Potter or Twilight, which are read and loved by hundreds of millions of people of all ages, considered to be ‘young adult’, unliterary, too-easy? The fact that you are so engrossed in the pages that you can move through the entire novel within days, is somehow a bad thing.

Conversely, why are novels that are ‘critically acclaimed’ but read by almost no one, because no one can finish them and recommend them to friends, held up as real, literary stories?

The answer to this is - the Modernist writers.

Prior to the mid-1800s, stories reflected the life of those times. Quiet; lit by gas lamps and candles. Generally speaking, the fastest you could travel was the speed of a horse, and even they needed rest. Steam powered trains and ships were opening up an era of travel.

For the generation born in the late 1800s however, these stories held no relevance. Their world was noisy and dirty. Lit by electric lights and powered by internal combustion engines – they witnessed the birth of mass media, mass market advertising, psychoanalysis. War transformed from horse cavalry to tanks and bombers.

They created a new style of writing. They sought to capture the confusion, loneliness, and messiness of real life. Life wasn’t structured, leading to neat, happy endings. They threw ‘plot’ out the window. They layered their writing with symbolism, allegory and a requirement for the reader to analyse and interpret. Who is speaking a particular line of dialogue? Is it the protagonist, or his conscience, or an external narrator, or a new character? You decide.

This introduced the element of ‘difficulty’ that critics so prize today. Writing was no longer for the mass market – it was for those with the education, and interest to pore and struggle through these books seeking to unlock the real meaning within.

An easily-understood, exciting, and readable story has become supermarket fiction. Cheap. A little embarrassing. A somewhat guilty pleasure.

Grossman argues that now, after 100 years, things are finally changing. A whole new breed of writers are developing novels that are both intelligent and highly readable. These books don’t need deep analysis and deep patience. He suggests writers such as Michael Chabon, Jonathan Lethem, Donna Tartt, Kelly Link, Audrey Niffenegger, Richard Price, Kate Atkinson, Neil Gaiman, and Susanna Clarke.

I think I’ll look into this myself. I’ve finished the Twilights and Harry Potters.

Getting Things Done

"Getting Things Done" or GTD to its (sometimes cultish) followers is a time/action management system put together by David Allen.

The core strategy behind GTD is to get all your tasks out of your head and onto paper/computer/pda/whatever. So rather than keeping multiple to-do lists scattered around plus trying to remember a bunch of stuff to do, you get everything written down in one place and you can focus your mind on actually completing tasks.

Next you avoid handling these tasks multiple times. When you, for example, get an email, if you can complete the request in under two minutes then you do it immediately, if not you put it on a to do list, or delegate it, or delete it. No more keeping hundreds of emails just sitting in your email box that you occasionally scan over and consider doing something about.

Michael S. Hyatt has written extensively about his experiences with this system, here are a series of his posts. If you find this stuff interesting or helpful then there are many more resources scattered about online.

How to Shave Ten Hours Off Your Work Week

My Current Workflow System

Overcoming Email Overload, Part 1

Overcoming Email Overload, Part 2

Overcoming Email Overload, Part 3

Breaking Email Addiction

How to Get a Faster Response to Your Email

Yes, You Can Stay on Top of Email

The Not To-Do List

Recovering the Lost Art of Note-Taking

Workload Triage

The Importance of the Weekly Review

The Quarterly Review

Slay Your Dragons Before Breakfast

Enjoy!!

Perspectives on the US Government Bail-Out of the Auto Industry

The US government is still struggling with the issue of what to do with the big car manufacturers (whose CEOs flew to Washington on separate private jets to ask for billions of dollars of government money to help their companies survive). Yesterday, Congress set a deadline of December 2nd for the car makers to present a plan to show how they would become financially viable.

Should the government be bailing out these companies?

Wall St Journal:

"Big companies. Big numbers. It is hard for any politician to say, “So what, let them go bankrupt.” But the sad reality is that to save Detroit, Washington will have to destroy Detroit. A merger of GM and Chrysler won’t do away with Detroit’s ever-expanding pension and health-care liabilities or its onerous UAW contracts. And it won’t fix the Big Three’s issues with poor product design or quality control. The Big Three needs a radical restructuring dictated by the bankruptcy process–or some variation on it–and not a government plan that tinkers with the status quo. So here is a proposal: Let each of the Big Three do what is in the interest of its shareholders and creditors. Let them try and merge with each other–if they can. Let them each file for bankruptcy-law protection–when or if necessary. When Chrysler goes bankrupt, let GM or Ford or a foreign rival pick up Chrysler’s assets on the cheap. If GM or Ford head into bankruptcy, let the government step in–but only on punitive terms.

Punitive terms? Reduce all management, worker and retiree pension and health-care benefits. Remove all union contracts. Replace senior management and the boards. Haircut the creditors and recapitalize the companies."

BusinessWeek:

"Washington would impose conditions and promise strict oversight, but it simply can't push through the kind of transformative change the industry needs. There would be too much political opposition, and regardless, the bailout sums being bandied about—$25 billion of taxpayer dollars, for starters—would only keep the Big Three heaving along, basically as they are. It's a life-support solution, not a cure.

That's why the boards of the automakers should take the courageous step of putting their companies into bankruptcy."

Harvard Business Publishing:

"The same people who want GM to live or die on its own will often use Darwinian concepts of "survival of the fittest." But evolution is about life or death, eat or be eaten.

If you see a dog about to be hit by a car, you don't say, "that dog deserves to be weeded out," or "What about the other dogs that are competing for kibble?"

No; you save the dog. Business isn't about evolution, it's about existing lives. If we can spare some suffering, why wouldn't we?"

New York Times:

"If G.M. or Chrysler were to go under, tens of thousands of people would be thrown out of work. Pensions would be in danger, potentially putting taxpayers on the hook for the bill. Auto suppliers would start defaulting on their debts. Dealers would close. But if General Motors and Chrysler were to merge, with some sort of government assistance, the story might end pretty much the same. The combined company would probably limp along, laying off thousands of people every few years. Then — bet on it — G.M.-Chrysler would come back and ask for another bailout. It has happened before: Chrysler was rescued by the government over two decades ago. Now here it is again, cup in hand.To make a combined General Motors-Chrysler work — let alone flourish — the company would need to do everything that is impolitic. It would have to virtually win big concessions from the U.A.W., cut salaries and benefits, and lay off a lot of people, fast. Oh: and it would also have to make cars that people actually want to buy. Washington cannot help there."

Indian Social Networks Survey Results

Business Today recently published a survey on Indian social media use. Some highlights:

• India has an estimated 17 million people who use social networks like Orkut, Facebook, Linkedin etc. (Yes, this is almost the population of Australia, but considering India's billion residents there is obviously scope for significant growth in the future.)

• Contrary to the belief that these sites are only used by younger people, 78% of working executives above the age of 35 use social networks, as so 70% of senior managers (VP and above).

• Companies are starting to look towards these networks. During the IPL competition, the Mohali team successfully used Facebook to connect with fans.

• Ad spends on social networks are between 4.4% and 9% (depending on whose numbers you believe) of total ad spends on digital media, which in itself is only about 1% of India's total ad spends.