Ficci Frames

I recently attended the FICCI- Frames 2006 conference of the Indian Media and Entertainment Industry conducted by FICCI. The conference is essentially an annual event for the Industry,  the biggest of its kind in Asia and  I was amazed to see the attendance of more than 1500 people and above all the high level of enthusiasm, interest and novation.

The tone of the conference was overly positive and optimistic. It was creativity (Animation, Gaming) and technology (DBTV, IPTV, Mobisodes, Digitalization) that was what picked attention and focus.

Quick ideas/thoughts  from the 3 day event:

IP (Internet protocol)+IP (intellectual property) is the winning equation

Mobile: to be used voice also. The sixth sense, the extended limb blah blah. Mobile to mean a lot many things for lot many people – MP3, video recorder, camera, gaming console , PDA , Mini TV.  

Gaming and Animation: The next big thing. Not necessarily outsourcing of animation but our own proprietary content(IP).

E-content, Mobile content is in:  Nazara technologies, Mauj telecom, makemytrip.com contest2win.com, exchange4media.com or yatra online is in. Key to success superior execution ability, history of failure (and having learnt from them) and revenue model in place with ability to charge clients. Do not expect the Indian consumer as of now to pay for online content.  

Print is out: A business for passion not necessarily earning money.  High print costs and extreme competition from other media of advertising to keep scope of growth limited.

Radio, Multiplexes: Need to specialize, Differentiate and engage consumers.
Both radio and multiplexes have little or no brand preference among consumers, very commodity kind of play. Need to get out from the frame of mind to mean everything for everybody. All Radios cannot play Hindi/Pop music.
Also, All multiplexes cannot just keep showing whatever movies are released. Case in point is Sathyam cinemas in Chennai showing digital cinema whereas the best multiplex in Mumbai still laggards.


Television: Need to get ready for time shifting and space shifting
Television in the future will not necessarily be watched as per the Broadcasters wish but with IPTV and TiVO kind of applications to give choice to the consumer. Concept of prime time viewing may die down. Television may not necessarily watched on Television sets they will be watched on all other screens like Mobiles, computers, Ipods etc. Interactive Tv is not going to be limited to SMSing. Intel and Microsoft TV where the frontrunners in showcasing their Time shifting solutions.  

ADAM SMITH THE MONEY GAME

Few interesting excerpts from the book:

We are all at a wonderful party, and by the rules of the game we know at some point in time the Black horsemen will burst through the great terrace doors to cut down the revelers; those who leave early may be saved, but the music and wines are so seductive that we do not want to leave, but we do ask, “What time is it? What time is it?” Only none of the clock have any hands.

The irony is that this is the money game and money is the way we keep score. But the real object of the game is not money; it is playing of the game itself. For the true players, you could take all the trophies away and substitute plastic heads or Whale’s teeth; as long as there is a way to keep score, they will play.

If you do not know who you are, this is an expensive place to find out.

You can have no preconceived ideas. There are fundamentals in the market place, but the unexplored area is the emotional one. All the charts and breadth indicators and technicals are the statisticians attempt to describe an emotional state.  

Herding Behavior: Failing Conventionally

Failing conventionally is the route to go. As a group, Lemmings may have a rotten image, but no individual Lemming has ever received a bad press.
                                   -Cialdini

Reputation is at stake…underperformance is easily measured, instantaneously available, and highly visible. The ease with which a fund manager can imagine getting sacked for this crime inclines him towards decisions that can be most easily defended after the fact. As ever, failing conventionally is the way to go.


The greater the ambiguity – as with technology stocks, for instance- the greater the likelihood that social influence will dictate behavior. Instead of focusing on what businesses will do in the years ahead, many prestigious money managers now focus on what they expect other money managers to do in the days ahead.

Besides, the market may actually be right; it is efficient. Perhaps other people know something I don’t?
               - Excerpts from the book “The Real Warren Buffet: Managing Capital, Leading People”


Money has been pouring into Indian stock markets and the Indian indices have been touching new levels every fortnight. While money is being raised from Japan (with real negative to zero interest rates) and petro dollars flowing in from the middle-east, money managers are finding it difficult to invest. Also the domestic retail money is flowing in the stock markets, with new offerings from Mutual funds garnering huge interest. The domestic investment in equity is relatively low at 2-3% of savings, living a lot of scope of domestic liquidity even if FII flows dry out or channeled into cheaper emerging markets.

What needs to be highlighted in the Indian context is the lack of investble listed paper, which is pushing the prices of the good paper to record levels. The recent sops in the Indian budget to MF industry might have enhanced the investment opportunity but it is still not sufficient.

What needs to be done is to provide avenues to absorb the excess liquidity into India is:

1. More paper- some big ticket IPOs :Airlines (Deccan, Kingfisher, Spicejet – they will all be needing funds to expand), Telecom – ( Hutchison, Idea etc)


2. Partial or complete Disinvestments –  BSNL, LIC etc


3. FDI or FII limits enhancement. – Banking, retail, Construction, real estate…


4. Increase liquidity in Corporate Debt market & Government securities.

Till then, it is the Private Equity investors who will rule- having more breadth for investing. Where as the Mutual fund managers will exhibit Lemmings like behavior and continue to invest in the Large caps and companies of repute ignoring valuations – as nobody will reprimand you for investing in Tata’s, Birla’s, Bharti’s, Infosys , SBI etc for Perhaps the Markets-may-actually-be-right.  

So it is highly unlikely that Money mangers are now going to sit on cash , as he may be reprimanded for - missing the Bus or not having the Visionary insight of “how the Indian demography is changing”. However, the blame of low returns or negative returns could easily be attributed – “everybody is losing money” or “the markets are moving down”.