MUMBAI: The verdict of the Venture Capital (VC) Financing and Mentoring session on the opening day of the FICCI Frames 2003 was clearly in favour of corporate governance and more transparency in the media business.

UTV chairman Ronnie Screwvala moderated the discussion which had an illustrious panel comprising Passionfund CEO Mahesh Murthy, Ambit Finance Pte MD Ashok Wadhwa and Enam Financial Consultants Mahesh Chhabria.

Screwvala summed up the discussions by stating that the media cum entertainment business was less about stars, personalities, characters; and more about good content; responsible management; sustainable, predictable and repeated growth. He stated that there is hope if mindsets change and the consolidation process continues. However, media entrepreneurs need not stop dreaming as there was sufficient money to back their dreams as long as they did the right things. Clearly the trend was more about proof of delivery rather than proof of concept - which was what happened in the past.

Screwvala also pointed out that the media sector attracted negative publicity due to the plethora of controversies which revolved around the media sector. He also pointed out that there was a lot of misconceptions prevailing amongst the outside world about the working of the media and entertainment industry. He advocated greater need and focus on the part of the media industry constituents to communicate and demystify the working of the industry.

When asked about the need for consolidation amongst TV content producers, Screwvala added: "The consolidation process already started happening long back. Earlier, the top production houses managed to bag 30-40 hours of programming but the current dominant leaders have more than 300-400 hours in their kitty. What is required is a change in mindset and understanding of ground realities!"

Ashok Wadhwa said the bad news is that VCs in the television content business no longer exist - what remains is private equity funding. The so-called 'VCs' lost so much money in the last two years that they have become hesitant. TV producers will find it difficult to get funding in the current scenario wherein 5000 producers are chasing 1000 hours of TV content.

The TV content business desperately needs consolidation where creative minds will join hands to become more responsible. If they come together, then there will be greater amount of corporate responsibility, corporate governance and sustainable business models. There would also be a greater chance of sustainability and scale.

Creative talent alone or substantial funding alone cannot create sustainable products or deliveries. Therefore, the existing 'larger than life" creative minds who run production business must stamp out their egos and become realistic.

Movies and films have a better chance of getting more funds as there is substantial interest developing in recent times. SSKI's IDreams is a good example of the same.

VCs are bullish on the radio sector and two of the private sector radio networks have recently obtained a large funding. However , the government regulations are a hindrance in this case. Global studios will start looking at India in a big way and bring about change - in terms or capabilities and expertise.

As large Indian corporates who have a track record of creating success stories enter the media and entertainment business, there is a greater chance of attracting more funds.

Passionfund CEO Mahesh Murthy Being a VC in the Indian entertainment business is a bad idea in today's scenario. Indian media companies must learn to be "exitable" or offer exit routes to VCs. VC have suffered losses as Indian media companies haven't given them chance to sell out or sell to the public - the only ways in which a VC can make money. VCs clearly prefer IPO (initial public offering) options to the dreams shown by BPO (business process outsourcing) possibilities. Media companies should ask themselves the following questions - "Will my business have the size and growth to go public and keep growing?" and "Will it have the intellectual property and capabilities to sustain its loyal base of customers?"

The Indian media industry's biggest pitfall revolves around the fact that most of the business is driven around personalities. However, no media personality can claim to have an eternal golden touch. Merging creative people with corporate governance is a difficult task.

Indian media companies need to look beyond personalities and create institutions which will ensure that the business continues to exist beyond the lifetime of the individuals. The most striking example includes Walt Disney.

The whole idea of undercutting on price will be beneficial as long as the volume game exists. Media companies must bargain for intellectual property share deals whenever they offer huge discounts.

Media companies need to consolidate and develop multiple revenue streams - multiplexes, distribution, cable business properties so on and so forth. Instead of sitting tight with successes in one form of media, there is a need to extend the successes across multimedia channels. There is a need to leverage indigenous characters such as Gabbar Singh or a Quick Gun Murugan or a Tenali Raman or a Birbal not just in the mediums where they gained popularity but across multiple media. For instance Gabbar Singh radio shows.

Enam Financial Consultant CEO Mahesh Chhabria There is a substantial amount of money and funds but poor sentiments affect the channelising of these funds into the media and entertainment sector.

Every media company goes through its phases such as initiation, growth, maturity and decline. Indian companies have been getting funding during the initial stages but the funding declines as the companies fail to deliver as per the VC's expectation. Clearly the trend was more about proof of delivery rather than proof of concept - which was what happened in the past.

Indian media companies have failed to create sustainable media properties, create workable business system models, tackle competition, develop alternate business models, and ensure adequate returns to investors through corporate governance. The companies have also failed to develop scalable models.

Indian media entrepreneurs have failed when it comes to rejuvenating in the face of constant change, have limited risk appetite and reluctance to dilute stakes at the right time.

So, the writing is on the wall! Don't stop dreaming or aspiring as the money bags are waiting for the right idea and the correct approach!