This article is written by Chandan Kumar Pradhan from KIIT School of Law, Odisha. This article talks about the problems faced by media and entertainment startups in India and how to overcome those problems.

What are the different kinds of media and entertainment startups?

In accordance with the DataLabs, the media and entertainment sector collected a total capital of $561.27 million within the year 2019, a fall of around 23 per cent in the amount of capital in the sector from the financial year.

The online gaming industry in India is predicted to incorporate a total revenue of INR 11,900 Crore by the year 2023, developing at 22 per cent CAGR, according to a report by advising major KPMG and the Indian Federation of Sports and gaming.

Mobile Premier League

Founder- Sai Srinivas Kiran, Shubham Malhotra

Founded in- 2018

Overview- A multiple games platform offering monetary rewards

Funding- $40.5 million

Mobile gaming has reached new heights in 2019 with the rise of Dream 11 into the Unicorn club. MPL is having an advance to become a unicorn soon with the help of its platform approach and multiple games.

In this app, the users participate in skilled game tournaments by paying a registration fee on the MPL app.

In the year ahead, MPL targets to become the world’s largest esports and content monetisation platform by adding more games into more types of content and grow.

Playo

Founder- Umashankar Nagraj, Karthik Igor, Daanish Suhail, Gauravjeet Singh, Amit Roushan

Founded in- 2015

Overview- Helps the individuals and groups of people to discover and provide book sporting venues

Funding- $1 million

All over the world, India is not a very friendly place where sports supporters are available. This app targets the imagination of the people with the community and commerce platform providing amateur sports supporters and groups. This platform helps users by attracting other supporters. And in this app other game’s accessing activities, venues, events and other sports-related things will be also serviceable.

Vokal

Founder- Mayank Bidawatka, Aprameya Radhakrishna

Founded in- 2017

Overview- A regional language platform for question and answer

Funding- $8 million

While Quora is supporting the people for Indian languages, Vokal is starting with a suitable approach to provide the regional language opportunity in India.

For 2020, Vokal predicts that they want to achieve 30 million monthly app users, which will make them one of the top content platforms in India.

WinZO

Founder- Paavan Nanda, Saumya Singh Rathore

Founded in- 2018

Overview- Gaming platform with the real cash price

Funding- $5 million

Gaming is increasing rapidly in India and the rise of PUBG is the biggest example of this phenomenon. WinZo provides 3rd party games and offers the people in various vernacular languages. Currently, it has 10 languages and provides the most relevant content to the public.

The company claims that 90 per cent of its user’s place belongs to Tier 2-Tier 5 cities in the whole of India.

For the new year, WinZo targets to add about 300 games in 15 languages and an expanded user’s place of up to 100 million players.

Editorji

Founder- Vikram Chandra

Founded in- 2018

Overview- Personalised short video and news platform with news partners

Funding- $4.2 million

News has changed a lot in the 21st century with the approach of digital media and entertainment and the rise of video editing as a format for powerful news in India.

This app offers a free of charge and ad-free version at the present, and they plan to roll out a paid version within this year. For 2020, this app is trying to combine with more distribution partners, including TV apps and extending to provide 6 additional languages along with rolling out an ad tech service for the platform.

Marketing dynamics of media and entertainment industries

The Indian industry of advertisement is predicted to be the second-fastest-growing advertising market in the whole of Asia after China. At the present time, advertising earning accounts for around 0.38% of India’s GDP. By 2021, the Indian media and entertainment industry is predicted to reach Rs 2.35 trillion.

The industry of media and entertainment is predicted to reach around $43.93 billion by 2024. This industry is set to develop at CAGR (Compounded Annual Growth Rate) of 13.5% over 2019-24. In the financial year 2019, the major contributors were TV, print and films with a market budget of Rs 713 billion, Rs 333 billion Rs 185 billion respectively. They are predicted to achieve Rs 1025 billion, Rs 375 billion and Rs 228 billion respectively in the year 2022. India had a 15th position in the whole world in the music industry and is predicted to enter into the top 10 music markets within the year 2022.

Some successful industry’s developments in the M&E industries

The FDI arrivals in the Information and Broadcasting sector including the print media in the time of April 2000 to March 2019 stood at $8.38 billion, according to the data collected by the Department for Promotion of Industry (DPI) and Internal Trade.

Some of the following developed industries:

• Netflix’s Income has grown by 700% with the help of the local subject matter and marketing, which was fascinated by more users during the period of 2018-19.
• Spotify to launch the lower version for Android phones in India.
• Star India signed up 35 advertisers for the ICC World cup and targeted around Rs 1000 crore in the advertisement sales.
• Dailyhunt, a local news provider run by Verse Innovation Pvt Ltd, which will receive an investment of $60 million in a new funding round led by Goldman Sachs Investment Partners.

What problems are actually faced by M&E startups?

There are more other issues that are faced by entrepreneurs while establishing such a type of company or startup. We will discuss a few of the issues in this article, issues like brand protection, taxes and other many legal issues. The startups are easy to start but, after the formation of the name, it is very critical to manage the members, to handle with the other companies etc. Some of the bigger problems are given below:

Business models: how do M&E startups make money?

Advertisement

There are many ways to do an advertisement, but basically it is a simple concept, which has been around the people for a long time. In this, you have to create innovative content by which it will attract the people’s attention. And you can do it by showing promotional content from brands around society everywhere. Sponsored content and product placement, these two types of ways are the most complimentary ways to execute the advertisers into the content.

Subscription

This is the most advantageous stage, where people will gather for new content and which is only for a limited period of time like (monthly or annually etc.). It binds in a running relationship with the consumers, the subscribers get access to a channel or company or app etc. for the content and for which they have to pay on the running process. And the main point is that the people want something new in the next content because they are not paying the money only for seeing that single content again and again. The content should be refreshed in the running process.

Licensing

The ownership documents and papers should be in your hand, then only you can make a decision in favour of the startup wherever you need. For every step, when the business grows up, registration is required for trade licenses for employment registrations etc.; for all steps, the document is a must. Investors are also very careful and alert on license issues before they enter into this type of business. So, for the better investment and development of the business, you should take care of the licenses.

Aggregation 

If the materials of the companies are not selling at the specified price then the company gets less attraction from people and their revenue also goes down. Therefore, Aggregation is a form, where the company can sell their products with a new idea. Here, actually the thing is to remake the content and mix up with some other similar materials and sell it. And the advantages of this way is that there will be a collection of materials which are needed for the people and they don’t have to go anywhere thereafter.

Events

According to the marketing professional researcher, around 7 out of 10 industries create and handle their own events to attract the people. Some of the events are only for the limited persons and some are with many big exhibition halls and concurrent sessions with more intelligent people of their industries.

Which is the best way to connect with people and make money among these ways?

Among these ways, the subscription is the best way to get profits because many successful media companies follow this way to connect with people and here, the company can create more content and nowadays, online materials are more popular in comparison to others. I do believe that this mode of transaction is the heart of a strong media business creator.

What are the operations, compliance and governance issues?

Contract enforcement

Once you start your business management member, it’s time to build legal agreements to record your legal relationship with the other members of the venture. You have to find out what agreements are required between you and your co-partner. Then, in the end, you will make a critical agreement to work on the business. Basically, by this agreement, they will set the rules for how they will run the startup. If there is no understanding between two partners then how the business will run smoothly. Therefore, the relationship between the two main people should be appropriate.

Data protection (piracy, mitigate cyber risks)

Every view, download results in a large amount of data being created every day. This data gives to the media and entertainment companies a real budget advantage, therefore, this type of data is an attraction towards the cybercriminals.

The M&E startup companies should take some steps to protect their data, which are:

• Identify the priority assets, which is the most important matter to your companies.
• Improve your plans; how to respond to cyber threats.
• Consider the impact of security violation by any third party, and think about how to protect the security data of your company.
• Develop a continuous improvement plan, which will enable the management of a constant change of security by effectively and efficiently.

Employment and labour laws

Doing business in India or even running any type of startup requires several licenses. Some licenses are simple tax registrations and some businesses just need a trade license and establishment registration. For employing more than 10 persons, you have to do various labour and employment-related registrations. If the entrepreneur does not have the licences of labour law, when you are growing in the field of media and entertainment, the investors of the company will ask you for the proper documents of the licences before they invest money.

Taxation Issues

A lot of businesses fail due to this concept, many of the founders face a very huge amount of fines, and there is a possibility of imprisonment and criminal cases with regards to tax bills, Only due to negligence and ignorance. Every organization in the world, involved in any type of business, has to pay the tax to central, State and local governments. So, if you maintain the taxation section of your business then all members of your business will be benefitted. The taxation laws are especially known to be a tricky thing.

Government policy

The Government is taking various types of initiatives, which will be a support for the media and entertainment industry’s growth such as: in increasing the FDI limit from 74% to 100% in DTH cable platforms. Beside all progress, single-window clearances are arranged for the approval in outdoor events. For e.g. film shooting. Motivation based models are being worked out to absorb the overseas production houses to shoot in India and including the ease in direct and indirect taxes which are payable.

What are the issues that threaten their revenue channels?

There are many issues, by which the revenue of the company will be down and the craze of the people towards the company will also be damaged. And over the past 4 years, these types of issues are disclosing where many companies are going down and damage their image which was printed in the face of the people. The following are some common threats:

Account Takeover

In this, the attacker will hijack the brand account and spread wrongful links, fake news to the subscribers, followers to damage the image of the company.

A media company’s social media profile is the strongest asset for the content creating and revenue collecting. And while these companies are made the investors invest millions of money for building the followers and subscribers, which is the priceless value for the company. And in this threat, the attackers will demand these values for these accounts.

Spear phishing

Here, the attackers post wrongful and malicious links to the company;’s Facebook page that redirects to the followers to the fake company domain.

Attackers create fake accounts like the companies account and post illegal images, videos etc.. By this wrongful work, the company’s character will also hamper and people will hate the company. In some cases, the members of the company itself may also do the spear-phishing to breach the corporate network.

Physical threats

Physical threats to the VIPs and some of the main personalities of the company. The data of the company where the company shares the personal details and marketing promo. The attacker will access this data and threaten the people, as in the case of would-be shooter at a Pokemon convention who was arrested after posting this information online.

Customer fraud

Spoofed twitter customers support the accounts defrauds customers and advertises pirated content, here the scammers are very quick to exploit the interactions between the customers and the brand operator.

Important Legal and Regulatory Solutions by a lawyer for the problems faced by the startup industries

A media lawyer can help with your business, because he/she had the idea about that, how to secure the data of the company, what should be the agreements while doing a startup, how to protect the intellectual property of yours, buyer and seller rights for IP, which will help you to negotiate better deals and connect with more industries which are trustworthy. In this way, a lawyer can help you to guide and manage the legal works of your company.

And having an efficient lawyer in your company is a great thing, and the people will also have trust to invest in the company because anything happens then the lawyer can handle it with their legal works. These are the benefits of having a lawyer in the company. And you can refer to any lawyer for help and guidance for the solutions of the problems when you are facing it.

Conclusion

The media and entertainment field are quite very powerful. But the execution of the power by the media is always regulated and controlled by various kinds of laws. In this democratic society, the media have a great role in the development of the economy of the country.

Having a startup business is a very wonderful idea and skillful. The main thing to remember is that there are many problems to face while building any business. You have to care for your future while dealing with legal work for your business. 

Do you need qualified lawyers or law interns who can help with these challenges by implementing the solutions? 

If “Yes” contact Lawsikho, because Lawsikho has a very broad personality list of lawyers, who can easily solve your problems.

References

• https://www.insightssuccess.in/challenges-faced-by-tv-industry-in-india/
• https://inc42.com/features/startup-watchlist-indian-media-entertainment-startups-to-watch-out-for-in-2020/
• https://www.ibef.org/industry/media-entertainment-india.aspx
• https://www.entrepreneur.com/article/307601
• https://www.ey.com/en_in/tmt/ten-opportunities-and-threats-for-media-and-entertainment-compan
• https://www.allerin.com/industry/media-and-entertainment-industry-solution
• https://monetizingmedia.com/business-models-for-media-companies/

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