Charles Rivkin, Chairman and CEO, MPAA
MARCH 12, 2019
Remarks as Prepared for Delivery
Thank you, Uday, and thank you, FICCI, for inviting me to Frames. It’s an honor to speak before such a vibrant forum about timely issues and challenges affecting our industry.
Before I go on, I want to acknowledge that we meet at a very important moment. Very important. The beginning of the Indian Premier League season. And I know there are some big questions playing on the minds of many here: Like: Can the Chennai Super Kings successfully defend their title?
Now, I grew up in the United States with baseball, where we “pitch” the ball instead of “bowling” it. Where we hit “home runs” instead of “Sixes.” And while many far smarter people have discussed the similarities and differences of these two great sports, the former diplomat in me knows better than to talk cricket with this audience.
But I will say this: the IPL is the most exciting and most-attended cricket league in the world. That’s why Star is banking on this passion and has paid substantially for the broadcasting rights for five years.
Now that’s the kind of smart media business that all of us can understand. And it’s what I have come to talk about today.
Because if there’s one thing that unites Indians as passionately, and across as many religions and socioeconomic strata as cricket, it’s movies.
Movies in all their diversity of cultures and language. The pure richness of spectacle, whether they’re on jumbo screens or pocket-sized mobiles. And in recent years, it has been so exciting to see Indian filmmakers no longer only creating stories for local audiences but sharing dramas with universal themes for global audiences, here and in markets around the world.
More and more people are learning about India primarily through its films and television.
You only need to look at the successes of Dangal and Sacred Games to see the global impact of what we do and – just as importantly – what we do together. Dangal brought UTV Motion Pictures and Walt Disney Pictures India together. And Sacred Games, Netflix’s first Indian language movie, brought our newest member studio together with Phantom Films.
On a personal note, this is my third trip to India over the past few years. And in my previous capacity as U.S. Assistant Secretary of State for Economic and Business Affairs, I saw the country from many perspectives: from the economic to the political; and from the business to the cultural.
I also saw the vibrancy of the Indian film and television industry. The film industry, which makes between 1,500 and 2,000 films a year, contributed US$33.3 billion to the Indian economy, and supported 2.36 million jobs in 2017. India is also the largest television market in the world, with more than US$10 billion in revenue in Fiscal Year 2018.
When I visited, I knew that Bollywood was – and still remains – the world’s largest producer of films, contributing more than 40 per cent of India’s box office revenue. So I decided to see it for myself.
I visited a Bollywood film set which turned out to be one of the memorable highlights of my trip. Watching the day to day production activity was extraordinary. You couldn’t take your eyes away from the spectacle and sheer enormity of these scenes. A marvel of creativity!
So, India, I’m one of your film and TV industry’s biggest fans! And I am proud to return to this extraordinary country as Chairman and CEO of the MPAA, to represent the interest of our member studios.
They are so deeply invested in India: Disney/Fox’s Star TV India … Sony … Viacom … and Netflix, our newest member, which has emphasized its strong commitment to India.
And because of our presence, and our deep investment in India’s future, we want to be your partners in many mutually beneficial ways.
And we share a deep interest in incentivizing the Indian media and entertainment industry to grow even bigger.
As we meet, for example, Indians live in a country that is the world’s largest producer of movies with the least number of screens available to enjoy them. And a report that we are releasing with the Producers Guild of India here at Frames underscores this challenge with a telling example.
Dangal is the highest grossing film in Indian history. And as Prime Minister Modi has reported, China’s President Xi even made a point of telling him how much he enjoyed it!
India’s population is second only to that of China. Yet the movie made more at the Chinese box office than it did in its own country. As much as five times more by some estimates.
Numbers tell the story. China boasts 50,000 screens, compared to India’s total, which is approximately 9,500.
Clearly, as our report concludes, building more screens would bring much more revenue to India, and that would be a game-changer for the national box office and the entire entertainment industry.
Unfortunately, there are at least as many state laws governing the construction of new theaters as there are states. Some laws even date back to the British Empire, a time when they were imposed to restrict the gathering of large crowds.
Incentivizing our industry is so much more effective than hampering it. Which is why, we are urging the states to reduce those barriers, by shortening the time it takes to get approval and build those screens.
On the production side, we are pleased that Government is contemplating a Federal tax incentive for filming that our member studios could find attractive.
We have also urged state governments to step up their incentives not only for local films but also to encourage foreign investors. We are pleased that the Film Facilitation Office India, created in part at the industry’s urging, regularly engages with the states to open doors and create more opportunities.
We must build on – and support – Prime Minister Modi’s historic one nation, one tax idea, so that creators are not so overcome with additional local taxes that they change their minds on starting productions. We have encouraged state governments not to levy additional taxes that discourage filmmakers; and we have asked three states that have introduced Local Body entertainment taxes to roll them back.
Of course, there is so much more that we can do together – not only to protect our creativity but to actively incentivize the market and build on the kind of growth that India enjoys today in its OTT industry.
Thanks to the affordability of mobile phones in recent years, young people and old … rich and poor …. From remote villages to bustling towns … 95 per cent of this nation … are watching movies, TV shows – and of course cricket … in the palms of their hands.
Around the world, people spend an average of 6 hours 45 minutes a week on the internet.
In India, it’s 8 hours and 28 minutes.
According to a recent study by the Boston Consulting Group, the OTT market here is going to reach US$5 billion by the year 2023.
We know that, together, we can build an even bigger entertainment market … A market that can generate millions, even billions, of rupees in revenue to the Exchequer.
A market that can create jobs and opportunities across the economy.
At the producer end of the equation, filmmakers and other creators are often beset by cumbersome regulations that slow down the shooting permit process, or by state taxes that threaten to engulf their production budgets.
In our conversations with the federal and the State governments, we have advocated a simple formula: to simplify, incentivize, promote, and measure return on investments on any incentive that takes India forward.
For example, the MPA shared an Economic Contribution Report last year that underscored the importance of the movie and entertainment sector to the Indian economy. And we were pleased that the Government of India subsequently identified the Indian media and entertainment industry as one of 12 designated “Champion” sectors to help raise its export services to more than four percent of GDP by 2022.
We have seen in many other countries the positive impact of rewarding creativity, instead of harnessing it into submission. And wherever appropriate, we have tried to show the economic rewards – the return on investment – of these and similar initiatives.
On that point, creativity, I’d like to talk about piracy and copyright protection.
Creativity is the heartbeat of our industries. Piracy cuts into that vibrancy. It robs incomes from creators and craftsmen. Our creative output starts to drop off. And little by little, an entire ecosystem breaks down. Our economies lose. And a rising number of consumers – here and across the world – are deprived of great stories.
When I came here as Secretary of State John F. Kerry’s top economic and business advocate, one of the issues before the Indian Parliament was camcorder legislation. And I was among those who strongly advocated for legislation to address in-theater camcorder piracy.
I am pleased to see that the Cinematograph Act Amendment is now inching closer to the finishing line… And not only that, it contains many of the provisions that we proposed.
This is one important step. But it’s essential to address online piracy problems in a comprehensive manner.
In Maharashtra, for example, the very heart of Bollywood, we are fighting to reduce piracy in a very direct way.
The Maharashtra Cyber Digital Crime Unit – or the MCDCU – is a great example of multiple stakeholders partnering on a successful endeavor to honor and protect the sanctity of Indian creativity.
Our studios support the MCDCU, while the Motion Picture Association has helped to coordinate their efforts with law enforcement.
It is our hope that this example can be adopted across India, and even internationally with cooperation from similar agencies.
It’s as important to protect India’s incredible creative assets as it is to introduce the incentives that will not only produce more cinema screens but build a greater infrastructure across all platforms that makes India the ever more robust media and entertainment market that we all want to see.
That is an outcome – and a future – that I anticipate with great excitement, and one that I look forward to working with you to realize in the years ahead.
The great cricket journalist Peter Roebuck once told a story that says a lot about India’s passion for cricket. But I believe there’s a message in there for all of us too.
A train that was going from Shimla to Delhi stopped at a station for a few minutes longer than usual. The reason was simple. At that moment, Sachin Tendulker was batting 98 runs. Everyone on that train and on the platform – from the passengers to the conductor – waited to watch him complete his century.
I think both our industries always feel a little like that. We are batting 98. We are powerful, strong. We’re achieving. But we are always looking to get to that century.
Like the crowd that waited so patiently and confidently for Sachin to score his ton, we know it’s going to happen.
Together, here in India, I know that we can get there.
We have the shared interests.
We have the desire.
We have the partnerships.
We have the capacity.
And we certainly have the creativity.
Charles Rivkin is the Chairman and CEO of the Motion Picture Association of America (MPAA).