Though viewed as one of the sustainable areas of employment generation, the industry hasn’t been able to do much about employment generation
By Kaibalyapati Mishra, Jadhav Chakradhar
The digital transformation of society unveils a noteworthy phenomenon that suggests the adoption of new digital tools tends to benefit those who already possess the means and motivation to leverage them, further amplifying existing advantages. Unfortunately, this exacerbates societal inequalities, as those without the necessary resources or motivation are left at a greater disadvantage in the evolving digital landscape.
Superstar Effects
Rising inequality in the digital age can be attributed to the increasing influence of ‘superstar effects.’ This trend results in significant wage gaps among individuals with nearly identical talents, particularly at higher levels. These pronounced disparities in income stem from heightened viewership, notably observed in sectors like cricket and filmmaking within the entertainment industry.
The narratives the world over are around numbers, titles and records. India has not been left out of the race. With a projected $4-trillion target looking clear with a real GDP growth of 6.3%, the dream of becoming an economic superpower feels real. What we intend to discuss here isn’t about who holds what share of the big cake. Rather, it is about how the figment of comfort, i.e, entertainment in this dream, makes the distribution segment worse for the economy and skewed in favour of a few.
With a massive 52% of the population following and playing cricket in India, it undoubtedly is the most popular sport. The TV penetration of 70% all over (61% in rural and 87% in urban India), with 900 million active users on TV, and furthered by the digital media, has added a humongous viewership advantage of over 500 million active users.
It is also important to note, though spreading unequally, that the growth in other sports’ viewership like that of kabaddi and football has increased. The other segment of the entertainment market is that of movies, which is bombarded with tremendous competition and growth. With headlines being made about box-office collections, the industry has grown from $138 billion in 2014 to $172 billion in 2022.
Growing Internet Users
Moreover, as per a report jointly published by IAMAI and Kantar Research, the number of internet users in India is projected to surge to 900 million by 2025, from approximately 622 million in 2020. This represents a compound annual growth rate (CAGR) of 45% until 2025. The entertainment and media industry in the country is anticipated to experience a yearly revenue growth of 9.7%, reaching a total of $73.6 billion by 2027. Specifically, the advertising-based video-on-demand segment is expected to witness a CAGR of 24%, reaching $2.6 billion by 2025. With such astounding figures, facts become feebles evaporating into the sky of a dollar economy.
The booming internet use and growth in India’s entertainment industry, combined with income concentration with superstars, are likely to worsen income inequality. As wealth becomes more concentrated, there’s a clear risk of widening economic disparities due to the increasing concentration of viewership for particular sports and films.
Employment Generation
However, the facts aren’t very soothing to the ears. Though viewed as one of the sustainable areas of employment generation (Art and Entertainment), the industry in India hasn’t been able to give back to the very economy it stands on in terms of employment generation. Increased mechanisation and demand for skilled labour only leave most on the audience side of the industry without being able to earn from the growth by contributing to it. At this juncture, the fact that India’s entertainment industry is booming and has the potential means much for only a very few. The secret to this boom isn’t about the quality; it’s about the demand that comes from the working-age population that we so proudly refer to as “the demographic dividend”. In India, the age group of 22-40 had 33%, and 41-plus years had 30% of the viewership in IPL 2022.
With the digital sports stint reaching Rs 4,360 crore by 2026, the obvious questions have taken the stage. Who owns this revenue? And who is paying for it? Are there nominal and real sides to such an extravagant expenditure? In cricket, having the BCCI as the richest board in the world looks gloomy in front of the poverty (6% of the population below $1.90 purchasing power), unemployment (8% in 2020) and child mortality ratio (31 per 1,000 babies not seeing their 5th birthday) doesn’t seem to go in tandem.
Widening Gap
The question that must be asked now is, with the overloaded doses of entertainment in their lives, is the demographic dividend of the nation able to harness the best productivity they are capable of? While more people in that age group have increased the demand for entertainment sources like sports and cinema, the cost of the time wasted, and the money drained away in the form of tickets and subscriptions have serious economic implications for many. The celebrated money generated from the mentioned means is held by a few businessmen, boards and actors that has supposedly made the inequality situation worse. We don’t need to highlight how the synthetically created drawing upon these entertainment sources (like reviews of movies and match highlights on YouTube) is eating away even more.
In this context, the lines of the Father of Modern Economics, Adam Smith, are very relevant. The Smithian words, “Every individual for himself is a gentleman”, do portray the business motive of the capitalist that comes at the cost of loss of ethos of doing business by crippling the youth of the nation by feeding them excessive content and drawing the money away.
Hence, it becomes evident that our choices in media consumption wield a profound impact on the shaping of our thoughts and the significance we attribute to issues such as widening income inequality. It is high time to take into cognizance the roaring de-distribution of wealth by means of the entertainment industry.